Facebook, iPads, Google lead charge toward future of news - East Valley Tribune: Business

Facebook, iPads, Google lead charge toward future of news

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Posted: Sunday, September 19, 2010 11:00 am

The world of news and information, in terms of who produces it, how it gets produced and how it is delivered, is exploding with new enterprises popping up almost every day. Traditional media is struggling to find its way in this new world, both in terms of understanding how it works as well as competing in it. If traditional media is to survive it is essential that it understands this new world and to figure out how to carve out a place in it.

With that in mind, Scripps reporters, site managers and editors launched an ambitious project to explore the new world and report on what's working, why and what the implications are for the future of newspaper organizations. The scope of the project was extensive, ranging from giants such as Google that are earning billions of dollars a year to small, one-man operations that have found a niche and are thriving.

What follows is a brief snapshot of each of the enterprises researched and a description of where they have planted their flag in the new world.


Few digital devices have been embraced more quickly and passionately than Apple's iPad, which was introduced this year. Surpassing 3 million units sold in its first 90 days on the market, the iPad tablet is widely regarded as a game-changer in terms of digital devices. The iPad allows users to access the Internet, download thousands of apps, display pictures, watch movies, send e-mails and yes, read beautiful digital editions of magazines and newspapers that are displayed in full color on its 9-inch screen.

Many magazines and newspapers are rushing to develop an iPad format. The New York Times, The Wall Street Journal, USA Today, Sports Illustrated and Time magazine already have developed iPad editions. Most include a paid content model, meaning users of the iPad edition subscribe and pay a fee just like a print edition.


This three-year-old company now bills itself as the YouTube of documents. More than 10 million documents now reside on the Scribd website. Scribd has more than 50 million registered users. These registered users can look at any Scribd digital document for free. Users pay a small fee to download a Scribd document to a laptop, iPad, Smartphone. In addition, Scribd works with publishers to sell digital editions of their documents and publications. When a digital subscription is sold, Scribd keeps 20 percent of the transaction.


Will online news-only websites work?

In the shadow of a closed metro newspaper and a crumbled Washington state house press corps, veteran journalist Josh Feit left a paying gig to launch Publicola, his shot at filling the news hole craved by Seattle political junkies. Investor-funded at the outset, Feit bummed rides and worked in coffee shops for months to keep Publicola afloat as it found a voice and audience. Eighteen months later the site has found its ultra-specific niche, garnered popularity in influential city political circles, scooped the dailies, was issued credentials in Olympia, hired another full-time reporting staffer and rented a downtown office. Perhaps most importantly in the evolution of the news business: Publicola is bringing in consistent revenue to fund quality journalism, and offers hope that the hunger for civic news and dialogue still exists.


The 17-month-old website out of New York blends location, business contacts and social networking sites. Users "check in" on the mobile application through an open forum and leave restaurant recommendations, "to dos" in a city, or simply let other friends (or would-be friends) know where they are at a given moment. It's social networking with real-time data, enhanced with a layer of sharing information on businesses and even a competitive component (become "mayor" of your favorite coffee shops with all those latte stops, for instance, by checking in more often than other regulars).

The company claims more than 2.4 million users, but more importantly has a stake in the rapidly growing market of GPS-equipped mobile devices like iPhones and Androids, and geo-location tools reaching out to Facebook and media sites. It's a small company, with a potentially huge idea.


Trying to make the world a more open place by helping people connect and share is the phrase that founder and CEO Mark Zuckerberg frequently uses to describe the mission of Facebook.

Facebook does so by allowing users to post personal information, short messages and photos online which, depending on user's privacy settings, can be viewed by audiences ranging from only pre-approved friends to anyone in the world.

Founded in 2004, Facebook reports having more than 500 million active users around the world, making it by far the largest social networking website.

Commercially, it presents ads based on a user's demographics and expressed interests. While Facebook is privately held and does not report revenues or net income, The Wall Street Journal reported in May that Facebook earned more than $500 million in revenue in 2009 and is forecasting revenue of more than $1 billion in 2010.

To date, Facebook doesn¹t directly compete for the delivery of news. It does provide opportunities for users to post links to the websites of traditional media. But there is also the potential for Facebook to occupy so much of a user's day that they don't feel they have the time to devote to other news sources.


Amazon.com is not a new kind of media, but a new kind of store - one of the most successful in recent history. The world's largest e-commerce company has pioneered technologies for personalizing the online experience that observers say could grab and hold news consumers' interest just as they do Amazon.com's millions of loyal buyers.

Most consumers know it by the simple language of Amazon's product pages: "Customers who bought this item also bought...." Not only does Amazon recommend items that have buyers in common, it also matches customers' own shopping habits to others', and tracks what people browse before ultimately buying something else. Combined with its user reviews, this personalization technology drives as much as 40 percent of Amazon's retail revenue, estimates Brian Walker, principle e-commerce analyst at Forrester Research Inc.

Amazon's success has encouraged a new generation of companies focused exclusively on the technology that creates such a personal experience. One, San Jose-based Baynote Inc., has already started marketing the technology to media companies. "The community does a pretty good job of self-segmenting articles around things that are really interesting to them," said Scott Brave, Baynote's chief technology officer.

INgage Networks

Founded in Naples, Fla., in 1999 under the name Neighborhood America, INgage Networks developed software for government agencies to use the Internet for exchanging news and information with constituents. Later, as citizen journalism grew in prominence, the company became involved with ABC, CBS and FOX News to capitalize on social media -- the emerging trend of citizens using the Internet to collaborate, communicate and exchange ideas. The company is now leveraging its knowledge of social media to provide businesses with ways to "engage" with consumers and drive buying decisions, thus the name change.

Associated Press

The Associated Press, founded as a cost-saving endeavor by five New York newspapers, is evolving beyond its historical role as a news cooperative to stand as well on its own brand of enterprise journalism. It is being disrupted on several fronts, from CNN's launch of its own wire service to smaller state-level content-sharing relationships. Newspapers' financial woes have contributed to a significant drop in revenue, from $747.7 million in 2008 to $676.1 million in 2009.

To compete, the AP has launched a new branch called Gateway, which is charged with developing new "containers" for its journalism. They include iPhone and iPad applications, niche websites on college athletics and so forth. They can be sold either as standalone AP products such as AP Mobile on the iPhone or so-called "white label" apps that are co-branded with the AP and the local news outlet. The AP's goal for technology is to only create applications or programs that "meet at the intersection of what consumers want, what technology can invent and what the journalism will properly utilize."

CBS College Sports XXL

CBS College Sports XXL is the 24-hour web channel for CBS College Sports TV, the No.2 all-college sports channel behind ESPN-U, the cable television operation. XXL underwent a complete redesign and optimization in 2008, changing it to use Microsoft's Silverlight web video player, which is compatible over different web browsers and includes aggressive search tools, an interactive calendar feature and interactive navigation on the video player itself. Now the site is poised for another competitive leap -- a complete image rebrand from CBS College Sports XXL to "ULive."

XXL and ESPN-U are big fish in the big pond of college sports-fueled media. But they aren't the only fish. Web-based businesses such as Rivals.com - an entrepreneurial success story specializing in recruiting news, which was scooped up by Yahoo! -- tapped into the news scoop/fan comment pool by locally staffing specialty websites focusing individually on dozens of Division 1 sports programs. Even small players such as BigSpur.com -- a locally owned and manned website that is all about University of South Carolina sports - have been successful depending primarily on the willingness of serious fans to pay for access to the sites, their insider-style news and active fan-comment areas.

The small players depend on word of mouth and the tightness of fan communities, an audience limited only by the fan base of a school, not geography. They also frequently leverage the marketing abilities of the big national players by "affiliating." Competition is fierce. BigSpur, for example, has decided to drop its connection with ESPN-U and instead network with the Web-based 247Sports.com -- a brand new site created by the original founders of Rivals that is all the buzz right now in this growing business of sports news "all the time."

Demand Media

Utilizing search engine optimization, Demand Media employs three algorithms to identify and cull the most commonly searched terms that have the most potential to produce advertising revenue and develop headlines to assign articles or videos based on those terms.

Demand Media employs 500 full-time staffers and more than 10,000 freelancers to supply low-cost, low quality content, paying $15 per article and $20 per video. It is the largest contributor of videos on YouTube.

Launched in 2006, Demand Media boasts it generates 80 million unique visitors a month, with nearly 50 million of those visitors to its domain: eHow. Its other domains are Livestrong.com, Cracked, Trails.com, Golflink, Answerbag and Mania.


The result of a unique partnership among traditional television industry media companies, Hulu provides premium video content such as network TV programs and movies from a variety of sources in a single, easy to navigate site across multiple platforms and providing it to consumers "when, where and how they want it."

Up until recently, Hulu offered its content for free. However, it recently launched its subscriber ''Hulu Plus'' service for $9.99 a month. The subscriber service offers users more content, more platforms and devices and Hi Def content for those watching through their TV sets.

Hulu is projected to generate $200 million in revenue in 2010, with its share after paying its partners estimated to be $70 to $100 million before expenses. Hulu claims to make a profit.


This 3-year-old company offers instant communication to a network of people, usually with a specific topic of interest. It has been especially valued by its users in everything from festivals to earthquake aftermaths for quick messages to a broad number of people.

Twitter has tens of million users now, and is integrating with as many digital tools as possible. It has more than 50,000 Internet and mobile applications available. Twitter is working on beefing up its search engine.

The big question surrounding Twitter is how will it make money long-term? It is introducing advertising to 2 to 10 percent of its users currently.


Launched in 2006 by Denver billionaire Phillip Anschutz and relaunched in 2008 with a revamped business model, this news site is assembling an army of writers who have passions for niche subjects and will work for pennies and psychic rewards. The company plans to have more than 60,000 "examiners" cranking across the country by the end of the year.

Examiner.com bills itself as "pro-am" journalism. Contributors must submit a writing sample, clear a background check and show real interest in their area of expertise before being accepted. They then are trained online to create content that appeals to search engines. The result is one of the fastest growing websites in the world. In Phase II, Examiner.com plans to syndicate content from its "gold" and "silver" writers to other publications and produce waves of stories on topics tailored to advertisers' needs.

Associated Content

Boasting an army of almost 400,000 writers, videographers and photographers, Associated Content says it's democratizing the way content is going to be produced, while paying most of its contributors a relatively small wage -- primarily based on the number of page views their pieces produce.

Founded by Luke Beatty in 2005, the Colorado-based company was recently bought by Yahoo! for an estimated $90 million. The company produces an estimated 1,500 items of content a day, some of which will now be used to fill premium slots on Yahoo!-owned Web properties and news sites.

Pay for contributors starts at $1.50 per 1,000 page views and can go up from there depending on the writer's "clout level," measured by the contributor's personal library of content and total page views.

Beatty estimates the amount of what would be traditional news content on the site to be around 15 percent, with some company executives describing it as more of a "social media" site, noting that evergreen content, which can continue to attract visitors day after day, year after year, is still the site's bread-and-butter. But especially with the Yahoo! acquisition, the site, which already licenses it's heavily search keyword-optimized content to various websites and has been featured throughout Yahoo!'s Web stable, wants to grow into what founder Beatty termed a "full-service media company."

Scripps Networks

Scripps Networks is all about audience engagement and takeaway. Not only are its viewers engaged in shows and videos that appear on SNI's networks and websites -- they actually want to watch the advertisements that run with them, too. That's of huge importance as content migrates to platforms where it is easier to skip commercials.

Like newspapers, SNI is constantly trying to attract younger viewers while maintaining its core. The average viewers of Food Network and Travel Channel are in their 40s. HGTV viewers tend to be in their 50s. Much of the push to attract younger audiences is driven by popular on-air personalities.

On content, it's all about control. "We decided early on we're not going to do anything unless the producers agree that we're going to own the content outright," CEO Ken Lowe said. That turned out to be a hugely important decision as new platforms came into play. It meant SNI could create a virtual video library online. It meant SNI could slice and dice videos any way it wanted, making them shorter for mobile devices. Segments of video from its television networks are used on YouTube and Hulu to drive audience. Content also is shared through branded applications for the iPhone and the iPad.

The final key ingredient: don't cut the good. "Quality content, great stories, great reporting is going to cost a lot of money," said Lowe. "People will pay for it if it is good. You can't keep cutting out what's good about the business just to survive to maintain the overhead of big plants."

Huffington Post

The Huffington Post went from a site hosting a cluster of well-known political bloggers to one of the heavyweights in online news commentary and Internet news aggregation in five years. Privately held and backed by venture capitalists - to the tune of more than $30 million - the level of the company's financial success is unknown but its influence is extensive. Huffington can call upon recognized authorities in nearly any field to produce near-immediate comment on breaking news, which has been the site's biggest drawing card for its primarily liberal-progressive audience, but it has also grown in the breadth of content it offers its readers.

The site recently launched its 22nd vertical - HuffPost Travel - and now bills itself as The Internet Newspaper: News Blogs Videos Community. Its traffic rank with 13 million unique visitors a month reported in June 2010 is No. 38 in the U.S. and No. 150 in the world. The company is deeply vested in sophisticated technology that gives it near-immediate response to search engine key words and reader response to its site postings, which it uses to generate assignments and requests for content.

Although Huffington has a small paid news staff and over the past year has launched localized online editions for New York City, Denver, Chicago and Los Angeles, it relies almost exclusively on unpaid content from bloggers and contributors and "curated" news from other websites.


Google is best described by the company's mission statement: ''Organize the world's information and make it universally accessible and useful.''

As a computing, internet search and advertising technologies company, Google has grown into a multinational giant that, in terms of search engine market share, has 64.4 percent of the audience compared to its chief rivals Yahoo! At 17.7 percent and Microsoft at 11.8 percent.

Google earned $6.2 billion in revenue in the second quarter of 2010 and recorded a $1.96 billion profit.

Google is perceived as the enemy of the news industry by Rupert Murdoch and others, but the ever-expanding Internet giant is acting more like a friend (or at least "frenemy") these days with offerings meant to help online newspapers engage and even monetize readers.

Google has experimented with the Washington Post and New York Times to discover how the Web can be used differently to present news in the future with more interactivity and functionality.


DIGG is a social network of link sharing that allows its users to digg, or give, a vote of support to a story, thus increasing its popularity. The company allows people to find stories/ideas/pictures/cartoons that might not generally be heavily circulated and share their thoughts. Empowering people and their news is the general target of DIGG.

DIGG has applications for the iPhone and iPad available at no cost. Everything that is available on the DIGG website is accessible from the application. The experience DIGG offers is also shareable with Facebook and Twitter allowing friends and followers to view what the DIGG user finds appealing.

The company claims 35 million visitors a month with average monthly ad revenue of $175,000.

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