Learning from free Classifieds

What can we learn from classifieds web sites? Are there some features, strategies that could apply to online news media? On Google.fr, one of the most searched terms is “Le bon coin” (the good spot). (1Leboncoin.fr, is a free classifieds site that ranks n°7 on the French market. It generates stunning monthly numbers:

  • 4bn page views (a big news site makes between 100-300m pages views)
  • 9.4m unique visitors
  • 1:10 hour spent per visitor (vs. 16-20 minutes for online newspapers)
  • 38 pages views per visitor
  • for each visit, a viewer will look at 37 pages, and will stay 16 minutes on the site
  • every single day, 300,000 new classifieds are posted by 200,000 users
  • in a single month, more than 2m people will place a classified ad.
  • the site carries an inventory of 9.5m classifieds (vs. 0.8m for ebay.fr).

All of this has been achieved in three years and by a team of 15. Leboncoin is part of a European strategy developed by the Norwegian media group Schibsted ASA: it started with Blocket in Sweden, and expanded to Segundamano in Spain, Subito in Italy, and more recently Custo Justo in Portugal. In France, Leboncoin is a co-owned with Spir Communication (2).

After a careful look at this business and lengthy discussions with Leboncoin’s general manager’s Olivier Aizac, here are some ideas worth considering for news sites. Read More »

Venture Capital Business Model

by Jean-Louis Gassée

As promised last week, let’s dig into a venture fund’s key numbers.

Limited Partners, LP, institutions or individuals put money into the fund. We, the General Partners, GP, make and manage the investments and we split the profits with the LP as the sole compensation for our services.
Over time, the split has varied with the industry’s prosperity and the fund’s reputation, it went as high as 35% of the profits for the GP but, as this WSJ story belatedly explains, is now back to about 20%. In our vernacular, that number is called the Carried Interest or, for short, Carry.
A second number, the Management Fee, needs a bit more elaboration.
As the Carry did, it varied and went up to 2.5% of the fund’s capital; it is now pegged at a fairly standard 2% per year. The Management Fee provides the money needed to run the firm’s operations, pay the rent, associates’ salaries, travel expenses and the like. It also provides fodder for misunderstandings.

The Management Fee is a loan, not a stipend. For the GP to get its 20% of the fund’s profits, both the capital, the money invested by the LP and the Management Fee must be repaid first.
When funds become very large, say a billion dollars or more, the Management Fee gets correspondingly large and can encourage spending habits, thus generating criticism the GP is more interested in the fee than in making money for its investors.
But, you’ll object, the advance must be repaid before profit-sharing kicks in. Yes…, and what happens if the fund doesn’t make money? Are the LP losing money while the VC enjoys a good time, living off the Management Fee? The answer depends upon the way the fund agreement is written. If it contains a Clawback clause, the GP is obligated to return the “unearned” fee. As you can imagine, this leads to interesting exchanges during the fund’s formation and, much later, if it turns out it loses money.

To summarize: profit sharing (Carry) of 20%, a yearly advance of 2% of committed capital (Management Fee), to be repaid before profit sharing kicks in. Read More »

Not on the same page. Ever.

Could Google and Publishers one day understand each other? Frankly, I doubt it. Two weeks ago I was in Hyderabad for the dual assembly of the World Association of Newspapers and the World Editors Forums (1).
There, Google-bashing was the life of the party. As I told in last week’s Monday Note (see The Misdirected Revolt of the Dinosaurs) the climax was the “debate” between WAN’s president Gavin O’Reilly and Google’s top lawyer Dave Drummond. One comes from Alpha Centauri, the other from, say, Pandora. For those who want to get to the bottom of the argument, the publisher’s statement is here and Google’s top lawyer defense is here.

Dave Drummond after his speech (photo FF)

In a nutshell, publishers keep complaining about Google’s relentless copyright violations. Tireless Google robots crawl the internet, indexing and displaying snippets in Google News, without paying a red cent for the content they post. As a result, said Gavin O’Reilly, “Google makes tons of money on our back”.
Dave Drummond’s reply: “We send online news publishers of all types a billion clicks a month from Google News and more than 3 billion additional visits from Search and other Google services. That’s about 100,000 business opportunities - to serve ads or offer subscriptions - every minute. And we don’t charge anything for that!” He added that Google practices were fully compliant with the Fair Use principle.
Fair Use is “A tired rhetoric”, snapped O’Reilly.

At this point the discussion gets technical. And interesting. At stake is this a crucial evolution of copyright, from a binary form (authorized ≠ forbidden) to a more fuzzy concept (use is allowed but restrictions apply). This evolution of copyright is tied to the Creative Commons (coined by Law professor Lawrence Lessig), which define a sort of shape-adjustable notion of intellectual property. Read More »

The Other French Paradox (2) - Jobs

Two weeks ago, I discussed what I called The Other French Paradox, that is how French taxpayers and French companies are at a (curable) disadvantage in Silicon Valley. Last week, I “shared” (we’re in California) my own plans to deal with the twin problems: a venture fund whose profits reverse the flow of money back to France and whose role is to help French high-tech start-ups achieve their full potential by becoming real members of the Silicon Valley ecosystem and, from there, by gaining access to Asian markets.

This week, as promised, I’ll deal with “mere matters of implementation”, questions and objections.

Sadly, I’ll explain the adjective in a moment, the first objection my compadres and I get is one of jobs outsourcing, or délocalisation: “When you transplant these companies to the Valley, French jobs disappear in the process.”
Understandably, if the company’s management team pulls up stakes and move to Mountain View or Palo Alto, there is a sense of loss, they’re gone, their salaries used to feed the local economy.
But, that’s where the “sadly” comes in, there seems to be little faith in the company’s success and in the resulting job creations back in France. Sometimes, I wonder if this lack of faith can’t be summarized thus, using a metaphoric pizza slice: to get a  bigger share, one can worry about its angle, is it 12 degrees or 15 degrees, or one can work to increase the pizza’s radius. Do we prefer a healthy but smaller company, all located in Brittany, or do we want an even healthier, larger enterprise, creating more jobs, both in France and in the US? Posed like this, the rhetorical question fails the “can you disagree” test, it’s framing.
For a way out of the frame, let’s turn to economic interest; in plainer English: making money.
The way we structure our investments in “transplanted” French startups keeps at least 50% of the engineering work, jobs, in France. We don’t do this because we’re nice guys, we want this because it makes economic sense. Let’s review. Read More »

The misdirected revolt of the dinosaurs

The junkies are rebelling against their dealer. The dope is the traffic, and the dealer is Google. For years, the search giant flooded the market with an ideology built on the early 2000’s, ill-fated, get all eyeballs you can, the rest (i.e. monetization) will take care of itself.
Publishers have invested tons of money, energy and brainpower in order to follow The Google Way: designing sites, structures, pages, even setting editorial rules to gain audience. Any kind of audience, by any means necessary. Legions of Search Engines Optimization (SEO) consultants were enrolled to help implementing the new click-to-Grail.  At the same time, the so-called Search Engine Marketing (SEM) made a lot of expensive noise as media organizations were buying keywords to improve their ranking in search results, some of them spending as much as €100,000 a month in this digital heroin. At some point, for many sites, clicks coming from Google thanks to SEO compliance and aggressive SEM were contributing to 40% or 60% of their entire traffic.

Then, the tide reversed.

Publishers soon realized the Google windfall was not as high as expected. As the search giant kept thriving, their own revenue plummeted. Over the last 12 months, newspapers print and digital advertising revenues have melted: -16% in Western Europe, -19% in Central/ Eastern Europe and -21% in North America.  At the same time, Google is still cruising at a 35% operating margin altitude. The economic crisis and the structural problem of web sites (endless inventories inducing low prices) caused CPM (revenue of an ad per thousand viewers) to drop. This convinced publishers the advertising-based free model wasn’t going to fly. They told themselves that sometime, somehow, readers will have to pay, and that Google, with its all-you-can-eat, free-for-all system, was in fact “doing evil” to they dying business.

That was the backdrop for last week’s 62nd Conference of the World Association of Newspapers (WAN) Congress and for the 16th World Editors Forum (WEF) I attended and spoke at, in Hyderabad, India. Read More »

Resolving The French Other Paradox

Last week, we looked at the two components of the “other” French Paradox.

First, the Valley aura helps a tiny Palo Alto start-up sell its technology in France. But it doesn’t work the other way around: a Lyons high-tech company will get a polite reception but no orders from the likes of HP, Google or Oracle. While the Valley does sell in France, to sell in the Valley you need to be of the Valley.
Second, French taxpayers unwittingly subsidize VC-backed Valley startups. Graduates from public universities or grandes écoles such as Polytechnique, Centrale and many others come to the Valley and contribute their skills and energy to the companies we, American venture capitalists, invest in. (In passing, thanks to a reader who reminded me HEC, one of the leading French business schools is a private institution.)

The French speak of “refaire le monde au Café du Commerce”, the phrase refers to a suitably lubricated theorizing of the World As It Ought To Be. In moderation, a healthy way to pass the time with friends and to keep one’s debating skills sharp. With little risk of dealing with the “mere matter of implementation” - the one I’ve decided to address today.

After a quarter century in the Valley, after meeting countless French entrepreneurs, students, executives, elected officials and high-level civil servants; after indulging in more than a few of the Café du Commerce sessions mentioned above, in the Valley and in Paris; after more than seven years inside a Palo Alto venture firm, I finally had an idea, one of those that come with the pleasant sensation of the retroactively obvious.

Here goes: Resolve the paradox, build a venture firm exclusively focused on helping French high-tech companies become full members of the Valley ecosystem. And open the firm, its first venture fund, solely to French investors.
This isn’t theory, I’m doing it. As we speak, my co-founder and I have assembled a team, we’re polishing our pitch and prepare to go “on the road”. In early 2010, we’ll be meeting with potential Limited Partners, LPs, the accepted term for investors in a fund like ours, called ArèsVentures. Read More »

The e-book tractor application

Let’s rejoice: French teachers embrace the internet. Well, calm down. I’m not saying they embrace it the way I would like them to. This week saw two technological breakthroughs at my son’s Parisian high-school. The first one is a decision-support tool on the school’s website: it helps parents decide whether or not to send their kids to school when a protest blocks the gates, something that happens several times a year. Usually, my son whips up his cell phone at 7:30 in the morning : “Hey, dad, this just in: a text-message… gates are jammed by a barricade of trash bins (the kids’ touching expression of solidarity to last week’s teacher union action), I can go back to sleep”. Now, I’ll be able to fact-check the SMS alert on the web. (No webcam, though, I’ll have to rely on teachers’ good faith).

The second breakthrough happens as I immerse myself in the Life Science course for the same text-message freak, Abercrombie-clad kid who happens to be my offspring. Then, an epiphany. His science professor is an internet fan. Don’t get me wrong, here. As 90% of the 1.3m members of L’éducation Nationale (the world’s biggest employer after the erstwhile Red Army or, worse, today’s Wal-Mart), I’m sure the lady loathes the internet. You see: the net flaunts apalling attributes of foreign technology, it is the vector of free market ideology. Sorry, Larry and Sergei. Your Google is definitely evil, down here.

OK, the web can be convenient for educators. Actually, there is ample evidence the science teacher I’m referring to doesn’t understand what she teaches but, at least, she tries. Parts of her course come straight form the net. To the point where kids systematically google (sorry) excerpts to see where they come from. Needless to say, this is a powerful boost to the teacher’s credibility — to be found in one of the trash bins at the school’s gates.

Stay with me please, I’m coming back to this column’s subject: e-books. Last week, as my son and I lose ourselves in the genome’s arcana for an upcoming school-test, I get my own revelation. As I struggle to decipher the absurdly complex definition of amino acid in a textbook totally deprived of any practical example, my son browses the web in search of an explanation designed for normal humans. He googles genetic terms, lands on Wikipedia, which sends him to Inserm, a world-class French medical research lab. There, the lab’s site links to a better definition which, in turn, opens the door to a more detailed explanation, and so on. All the beauty and grandeur of hypertext, whose structure a 15-year-old boy navigates as if he were born in it — which, actually, is the case: the browser was invented about 15 years ago.

The e-book needs its tractor application and textbooks might be the “killer” one. Way better than the press (its time will come, but at a second stage). Still, media could benefit from a switch to the e-book form. Read More »

The Other French Paradox

by Jean-Louis Gassée

Foie gras, crême fraîche, butter, red wine — and lots of it! All these excesses leading to a higher life expectancy, to say nothing of the joys of sinning. That’s the legendary now official French Paradox. Scientists strain to explain the phenomenon: ‘It’s the phenolic compounds in the red wine’, they say. Me, I look at eating habits in my adopted country: restaurant chains like the Cheesecake Factory, “family-style” servings,  food everywhere, everyday, at all times in offices like Google’s.
Methinks there is no paradox just quantity, 360 degrees and 24/7 availability, as the recent but unmistakable widening of French bottoms attests.

No doubt, these must be Thanksgiving hangover-induced thoughts. Let’s turn away from arteries-clogging food and contemplate another set of incongruities.

Silicon Valley VCs (like me) are subsidized by the French taxpayer. Yes, bear with me, no fancy science, no magic involved.
It goes like this: a young kid performs well in high school, s/he is “tagged”, put on the higher education track, prep classes, “grandes écoles”, top-level business, government and engineering schools such as Polytechnique, HEC or ENA and their many local siblings. Such education is essentially free, that is paid by French taxpayers.
The young graduate starts working at one of the big French companies, Thales, France Telecom or Airbus. Soon, an alumnus calls: I’m at Google, or Apple, or Cisco, or this little Silicon Valley VC-funded start-up, come and join the fun. Indeed, graduates from prestigious French higher-education institutions are everywhere in the Valley. VCs have learned long ago to look beyond the “35 hours” and “5 weeks paid holidays” reputation. Actually, we know the “locals” got a little lazy over time, like New York Jewish families wondering why their sons and daughters now lose the Math Prizes to the children of Chines immigrants. First generation immigrants are naturally hungrier than the more prosperous third generation families. The famed Silicon Valley work ethic is too often a pose; new immigrants, in general, and French ones, in particular, are viewed as harder-working than some of the too-cunningly-adapted natives.
Paradoxically, that word again, the constraints, the obstacles of a highly state-regulated culture tend to sharpen creative skills — highly valued ones in our entrepreneurial Valley. In  France, defeating regulations is a national sport, a point of manhood. Read More »

The web’s design problems

Applied to news, the web doesn’t suffer from one, but three flaws. Let’s call these the Rectangle, the Bottleneck, and the Diversion.  These flaws got built into the system from the very beginning and, now, their impact has become harder to deal with. For new sites, these unforeseen aftereffects have grown to become real obstacles to reader engagement and monetization.

Let’s have a closer look.

1. The Rectangle issue.

This is the main absurdity in internet design. It goes back to the web’s early days: a text tool,  brilliantly designed to organize scattered pieces of information — that was Tim Berners-Lee’s 1989 original work.  Understandably, he used the page as his metaphoric vector; that was the world he lived lived in. For news, since journalists controlled how the concept got implemented, the paper mentality, and even the vocabulary percolated down to the young generation of web designers. They still refer to “the fold”, pretty obvious for a newspaper (better have your story above the fold than below). On the web, the fold points to the part of the screen below the first scroll. This brings us to the main contradiction.

I’m writing this on a 13 inches MacBook. OK, I have attached to it a 24″ Apple Cinema Display to allow multiple windows, but, for a simple measurement, let’s stick to the realistic 13″.

For a selected list of websites, here are the numbers of scrolls required to go to the bottom of the home page:

news.bbc.co.uk…3
bloomberg.com…3
nytimes.com…4
washingtonpost.com…4
politico.com…4
newsweek.com…4
guardian.co.uk…5
Elpais.com…5
lemonde.fr…6
slate.com…8
20minutos.es…12
lefigaro.fr…16
20minutes.fr…21
Aftonbladet.se…23

Graphically, it looks like this :

Well, there are many theories about the size of scrolls. Advocates of long pages pitch the following advantages: better referencing; more impressions for banners, more transverse navigation.  Opponents retort: for referencing, you don’t fool Google for too long by serving large chunks of your site over and over. For ads and for transversality, suffice it to say you lose readers real fast if they need to scroll down; the probability for a banner to be viewed decreases exponentially: 10 scrolls divide the probability by 100 or more. As discussed in an earlier Monday Note (see  Measuring time spent on a web page ), a full 24% of all banners are not seen at all; a placement on the footer rates as low as 10% of what the header gets. Read More »

I’m Chrome, You’re Rust

As you know, Google proceeded with the second announcement of its Chrome OS this past week, the first one took place on July 7th, 2009, and the ship date being a year away, we can be sure to have more launch events: one of the first beta, a couple more for applications and partnerships agreements before the Big One, in time for the 2010 Holidays shopping season. So goes our industry and its posturing ways.

Did we learn something new?

On the product itself, not really. On Google’s intentions, official or real, a little bit more or, as you’ll see, perhaps a tad less.

In two past Monday Notes, “Chrome-Plated Linux or Microsoft 2.0” and “Trojan Horse: Web Apps”, we discussed the product itself, Google’s Chrome browser sitting on a Linux-derived OS kernel and, more important, Google’s goal: killing the Microsoft earnings engine with a new generation of mixed-mode productivity applications displacing Office.

As we know, most of Microsoft’s earnings and cash generation (“only” $5B in additional cash for the past year) come from the Windows + Office + Exchange triad.
We know Google’s Web apps such as Documents, Presentation and Spreadsheets. There, for Microsoft, the most dangerous part is something called Google Gears or Offline mode on our PCs and Macs. For example, Gmail can work off-line, with a local copy of your mail; when the connection is restored, everything syncs back with the Cloud. The idea isn’t new, Microsoft’s Outlook has been providing such a dual on-line/off-line arrangement for years, it’s called the Cache mode.
This, meaning dual-mode Google Apps, is the Microsoft Office killer and, as a result, the end of the Microsoft money machine.

In theory. The rest, as we like to joke, is a “mere matter of implementation”.

On that subject, that is how Chrome OS and its applications will do in the marketplace, last week’s disclosures left some of us puzzled.

The OS kernel itself looks well thought out. It is said to boot fast and to be very secure, same thing for the browser, one we’ve seen already on PCs, spartan, a good restart from the feature accumulation we’ve seen on Explorer or even Firefox. Read More »

Young readers: already hooked on subsidies

I love my country. Among many things, I enjoy its business attitude. In the media sector, it is an unabashed mixture of entrepreneurship, bold risk-taking and fearless independence. You can’t spend a week here without someone telling you : “Hey, you know what? We’re about to send some of our journalists, paid by the Ministry of Foreign Affairs, to train bloggers in Middle East. Isn’t that great ?” (Yeah, indeed — you just received a €14,000 invoice from the state health insurance administration, they recalculated the cost of your health coverage for the past year).
Another one: “We are going to launch a new version of our mega-site, built on CMS x.” (The guy mentions an horrendously expensive proprietary Content Management System)”. You ask : “… Huh, why not using free tools, instead? You hire a couple of engineers, create your own specs, schedule a year of successive upgrades, and you’ll get great results, no?”. The answer is ironclad: “Bah, it’s all government money, you know…  It is part of the Press Modernization Fund… And we’ll even be able to finance the iPhone App from the same moneybag…”

As we speak, there is a big debate at the newly created Syndicat de la Presse Indépendante en Ligne (Spiil). This professional body of online news publishers, is pondering whether to accept subsidies. Pragmatists say big medias have been taking subsidies for decades. Now, the big guys spend huge sums of public money to upgrade their sites and they compete with us. Purists disagree: No way, we are not going to replicate the old MSM (Main Stream Media) behavior. Well, most of those pure players are struggling to balance their P&L while doing good journalism. Now way, I’ll lecture them one way or the other.

Yep, I love France’s profligate attempts to keep its press alive. No country spends more money to preserve the freedom and the plurality of its press: €1.2bn in 2008 (taking into account all forms of aid); that is 12% of the sector’s total revenue. (Just picture the US government coughing up about $8-10bn a year to help its newspapers and magazines industry!). And the percentage is likely to go up: new programs were announced this year (see Media acquisition, the French way) and press revenues are eroding. Between 2003 and 2007, French subsidies rose by 71% versus +21% in Sweden. For added perspective, Swedish readership is three times higher than in France and, as a result, proportionally five times less subsidized. Read More »

Droid and Android

Last Friday November 6th, the much-awaited Motorola Droid came out. Powered by the latest version of Google’s smartphone OS, Android 2.0, the new handset is exclusively distributed by Verizon. The carrier backs Motorola’s handset with an aggressive marketing campaign on its website and on TV ads.

For such a “gifted” (Motorola + Verizon + Google) product, the reviews came fast and… furious, that is very opinionated.
One gent rejoiced: Droid, was going to free him from the iPhone - at last! Small detail: as you’ll see by clicking on the link, writing on October 19th, a couple of weeks before the Droid came out, the “reviewer” helpfully admits he hadn’t used the product: “I haven’t seen the phone, but I’ve talked with someone who has worked directly with it”.
That’s why I prefer playing customer, buying the product, getting the everyday usage experience.
More “facts-based” reviews are available from MacWorld, quite positive, Endgadget, very detailed, Business Insider, with a crisp conclusion: If you don’t buy an iPhone, buy a Droid. The very geeky, well connected Gizmodo, comes to the same “if not iPhone then Droid” result. I’d be remiss if I didn’t link a summary of Walt Mossberg’s review, that’s how you know you’re an über-geek, when your reviews are reviewed. See also the Wall Street Journal’s gadgetmeister’s original oracular blessing.
A deeper discussion of OS platforms and voice applications is available here at TechCrunch. [Disclosure: one of the protagonists, British Telecom’s JP Rangaswami, bought Ribbit, an Internet phone company, imagine Skype with an API (Application Programming Interface). The venture firm where I currently work, Allegis Capital, was an investor in Ribbit.]
I’ll end the procession with a vigorous critique of Verizon’s punchy ad campaign by Andy Ihnatko, another respected, witty industry columnist.

With this in mind, unlike most opining individuals above, I went to a Verizon store and paid my own money to get a Droid. I did this on the very Droid-day, Friday November 6th, at the University Avenue Verizon store in Palo Alto, around 11:30 am. No line, I waited two minutes for a salesperson, a simple transaction as I already have a Verizon account. The activation turned out to be just a bit more problematic: ‘Too much traffic’ said the sales gent. I left the phone with him, went back to my office one block away. When I returned by lunchtime, everything was in order. Easy enough. Read More »

The Monday Note iPhone Application

Our App is up and running. You can download it here.

Now you can read the Monday Note on your iPhone, store stories, even, if you are offline.

In addition to the weekly Monday Note, you’ll get a daily QuickNote, short bursts of news with links to relevant stories and documents.
- At launch, the application displays the latest 30 stories (that’s about 15 weeks of Monday Note). Stories are stored in the device for offline reading.
- Each story can be saved in for a preset period for online or offline browsing.
- MondayNote and QuickNotes links open in the browser within the application (no need to quit).

Please send any comments or suggestions to iphone@mondaynote.com

The app has been developped by Idriss Nouar from SecondWeb.  

Negative-sum games

As if current economic conditions weren’t dire enough, several forces conspire to push the media sector’s financial performance further downward. These factors are an obsession with market share, price wars, and first movers’ ability to set the tone, often for the worse.

Take the iPhone application market as an example. At first, publishers were elated: at last, a content distribution platform with an embedded transaction system. They saw it as the first step to make customers pay for content. Then, another idea took over: market share. Like “eyeballs”, the old Internet Bubble de rigueur metric, market share is today’s mirage: once you get it, profit is (almost) sure to follow. Never mind there are zillions of companies that have once and for all severed the connection between market share and profit (Apple for computers, BMW in the auto industry, Nucor in steel production, name but a few).

Unfortunately, the first one who shoots for market share sets the standard, sometimes with surprising twists and turns. Take the Wall Street Journal: first-rate web site, highly successful business-wise with one million paid subscriptions (about $100/yr). When it came to the iPhone opportunity, guess what: they went for a free application loaded with pathetic ads — apparently locked on the saturation mode, the same banner kept showing endlessly. Just a few weeks ago, seeing a steep drop in profits, the WSJ.com reversed itself and restricted access to its app. Read More »

The End Of Megapixel Wars - Part II - The Canon S90

Last August, I wrote about picture quality finally winning against macho marketing. In other words, it seemed Canon, Nikon and Sony were giving up the simplistic escalation: my camera has more pixels than yours, therefore it is better. In the P&S (Point & Shoot) category especially, the facts were that more pixels ended up producing mediocre pictures.

P&S cameras are the smaller (not necessarily simpler…) models you carry in your pocket and purse, as opposed to “superzooms”, bigger lenses with a wider range of focal length, or DSLR, bigger, heavier but also better, more flexible.
As discussed earlier, a look at DP Review’s excellent camera database will make the problem clearer: pixel density per cm² varies from 1.4 million, for high-end DSLRs, to 43 million for some P&S models. The smaller the pixel, the less photons received. The less photons per pixel, the less electrons they convert to in the sensor. This makes it harder to separate the “good” (picture) electrons from the “bad” (circuitry noise) ones. Everything else being equal, the result is higher pixel density means higher picture noise, that is worse picture quality, especially in low light when fewer photons fall on each sensor pixel.
(DP Review, arguably one of the 3 to 5 best photo sites on the Net, is now owned by Amazon. IMHO a smart move considering Amazon’s general reliance on user reviews to help its customers make good choices and, as a result, come back, and come back…) Read More »

The Death of the MSM

You probably heard of Fake Steve Jobs, Dan Lyons, the former Forbes writer. He’s built a justified reputation for using his blog to do a kind of Steve Jobs pastiche, by turns analytical, satirical, occasionally vulgar and, yes, insulting every possible target in the Valley and in the MSM (Mainstream Media).

You’ll recall I criticized the New York Times’ bosses and one of their writers, Brad Stone, in a July 2009 Monday Note titled “Brilliant insights at the NYT”. In it, as a NYT fan, I worried about the quality of reporting, concerned with the superficiality of Silicon Valley coverage, bemoaning the formulaic cut-and-past jog of quoting anal-ysts and other “usual suspects”.

Well, read this Fake Steve Jobs piece. There, Dan Lyons gives another example of the MSM missing key information, the OfferPal scams, and insights, how game companies “game” users and how social networks can put an end to such practices. For short, the scammers are companies such as OfferPal tempting on-line game users with offers for more weapons or more lives while sending a stealth tentacle into their wallets by tricking them into expensive subscription “deals”.
The NYT’s problem is it wrote a fairly positive article on the new Virtual Goods Economy while totally missing the ongoing scams controversy. See Silicon Watcher’s overview here.

Fake Steve Jobs is worth adding to your list of RSS feeds (Google Reader is a good way to manage those). Lately, Dan Lyons wrote another tart and insightful analysis of big company (IBM in this case) PR practices here. Enjoy! —JLG@mondaynote.com

The hype(r) local digital journalism

Everybody wants to go local. Internet-wise, it sounds like the new flavor of the month week. Going local is a digital and idealistic version of Mao Zedong’s “hundred flowers blossom”. (The Chinese dictator did actually encourage the expression of dissenting opinions; this turned out to have unpleasant consequences for those who took Dear Leader to his word). So, fine. Let’s see thousands of European and US cities generate a flurry of local websites covering city councils, local controversies, urban planning, etc. Every committed citizen will be able to monitor the community’s pulse just by clicking on a URL; it will be easy and efficient to launch (or to join) grassroots campaigns against the construction of an ugly overpass or for the clean-up a hazardous landfill. All of this is real.

As I write this, I listen to NYU professor Clair Shirky’s lecture delivered last September at the Harvard University Shorentsein Center (transcript and Video here). Always brilliant and convincing, Shirky revisited the 1992 pedophile priests scandal in Boston, one that was heavily covered by the Boston Globe, but died out due to a lack of resonance in the public. Evidently, today, things would have reverberated very differently.  So, yes, there is a useful future for local digital media.

Having said this, allow me to express a slightly skeptical view.

First, people tend to celebrate the hyperlocal web for the wrong reasons, that is the depletion of local coverage by traditional media. Last Thursday, I was at the University of Central Lancashire in Preston (UK) for its 12th Digital Editors Network. There, the British news agency Press Association presented a “Public Service Reporting” project. The PA would recruit legions of citizen journalists, they would be asked to comply with the agency’s ethics standards as they report on local issues. As for now, the PA is building several pilots and is looking for funding. Tony Johnston, The PA’s training chief who presented the case, stated its ambition: a network of 500 to 800 journalists costing £15m to £18m a year (€17-20m, $24-29m). In a preamble, he explained that the British newspapers’ shrinking local coverage paved the way to such an initiative (details in Journalism.co.uk here).

Well. There are two ways of considering such move. One is to say: Great, community members take over the coverage that matters to them, they use all available tools: social network, live blogging, Flip-camera produced videos, to give local stuff the exposure it needs.
Another view is this: Doing local journalism is as complicated as any other kind of reporting. Poring over local financial records requires the same amount of time, dedication and expertise as digging into a national political party’s finances. Yes, citizen-like journalists will do fine reporting on “lighter” issues such as the state of schools or of the sewage system. But uncovering and preventing what really matters, such as the misuse of public funding, rigged bidding procedures for large projects and so on is a very different story.

More broadly, a professional journalist is required to avoid take sides in doing his or her job. Leaving such coverage to self-appointed journalists is opening the pandora’s box to all kinds of agenda-driven reporting. Read More »

The Meaning of Droid

Literally, Droid is the new Motorola phone sold by Verizon and running Google’s latest Android 2.0 release. The early reviews are good and, cleverly, Google issued a new turn-by-turn navigation application for the platform, also well received, complete with voice control and street view pictures. The Droid starts selling later this week, on November 6th, I’ll get one ASAP and report.

Earlier Android-powered phones weren’t so great, I bought a T-Mobile G1 exactly one year ago and wasn’t overwhelmed. I then called it “just a first effort” and wrote: “It’s only a question of time before most phone makers and cellular carriers offer an Android model, 12 months or less.  Motorola, for example, is building a “social networking” Android phone.  This is precisely the beauty of the Android Open Source, it lets phone makers and carriers try different implementations, specialized models, vertical applications.”

One year later, we have a new situation, a real contender for the lead position in the exploding smartphone market. How will Android impact the rest of the industry: Motorola, Garmin, TomTom, Palm, Nokia, Microsoft, RIM and, of course, the iPhone’s meteoric rise?

For Apple, the short answer is: the iPhone will continue to apply the Macintosh method, that is controlling all or most of the user’s experience, with similar results: smaller market share, disproportionally larger profits than the separate hardware-software crowd. More on this later.

Let’s start with a tip of the hat to Motorola. Last year, I questioned Motorola’s strategy and even its survival. Their “mobile devices” business was going to be spun off, the smell perhaps, from the more dignified “institutional” business, selling communications gear to government and enterprise customers. Fortunately, the new co-CEO for the mobile devices business, Sanjay Jha, came in, saw the on-going wreckage, dumped everything, starting with the Windows Mobile anchor. Then, listening to his techies’ advice, Jha bet on Google’s Android. The result is the Droid smartphone, making Motorola a strong contender again. Read More »

The French Edgar Hoover and “his” media dependents

Picture this in today’s American media: an Edgar Hoover-like chief of a major police agency cozying up to veteran reporters of Newsweek, The Washington Post, The New York Times, The New Yorker. To these cronies, the chief feeds dirty information, unverified gossip, unproven suspicion of corruption of X or Z, all of it “dug up” by federal investigators paid with taxpayers’ money. In return, the happy recipients share the loot with their handlers. And if they don’t, they quote “anonymous sources”.

This is exactly what happened in France, up to Yves Bertrand’s 2004 retirement. For 12 years, he was the director of a special branch of the French police (les Renseignements Généraux — General Intelligence). His carefully maintained and amazingly chatty notebooks have been subpoenaed in a recent slander case involving former prime minister Dominique de Villepin.

A book published last week, “Les Carnets noirs de la République“, pores over 2000 pages of the Gallic Hoover’s notebooks. The deciphering was done by Patrick Rougelet, a former deputy of this special branch who was fired when he began to investigate his boss’ financial dealings (don’t do that).

One of the most delightful chapters exposes the relationships between this police branch and the Who’s Who of French investigative journalism. The hooverish Yves Bertrand weaved close relationships with people at dailies such as Le Monde or Libération, and weeklies such as l’Express, Le Point, Marianne, to name but a few. In those organizations, regular correspondents — the book calls them “the perfused” –  traded information on a regular basis. Yves Bertrand also fed the French PR goddess, Anne Méaux (today, she advises French billionnaire François Pinault, but also Indian steel magnate Lakshmi Mittal and Banque Lazard). If that wasn’t enough, Frédéric Ploquin, one of Bertrand’s correspondent, had the nerve to be the interviewer for the self-justifying book, Ce que je n’ai pas dit dans mes carnets, published by the former skunk-police chief. Ploquin, the self-appointed “Grand Reporter”, works for Marianne, probably the most sermonizing French weekly (how come a newsroom can tolerate such a living journalistic accident remains a mystery to me).

Yves Bertrand’s former perfused are genuinely annoyed by this unpleasant coming out. But they are numerous and quite active. Actually, a good indicator of their penetration is the scarce number of reviews the book has got in the French medias. Omerta is an Italian vocable it seemed…

Yves Bertrand's calligraphy: About the Dassault dynasty (aircraft maker, media): "Father and son, people side, penny pincher and fond of blondes"

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The End of Walled Gardens

If there is one side of Scandinavian medias’ strategy I find particularly convincing, it is their ability to cooperate as much as they can, and to compete on what matters most, that is the product, the user experience, the reader. To describe this, Americans, the world’s best neologists, invented the world “coopetition”, cooperation + competition. This is exactly the kind of attitude that should prevail in these difficult times. And, to a larger extent, the burgeoning world of online medias would be well advised to get rid of their antiquated close-to-the-vest thinking. Time to tear down some walls.
Many medias are, or will be integrated into hybrid models — with digital and paper products blended together. Therefore, distinctions by news vectors are pointless. Let’s consider four sectors where cooperation among competing entities will be critical in the coming years :

Advertising. Whether it is measured in inches, centimeters or pixels, newspapers or websites don’t sell ad space in the most optimized way. Commercial brands and their surrogates, the media buying agencies, keep increasing the pressure on medias to get higher discounts; in a country such as France (which roughly reflects the global marketplace), the net revenue per page sold went down 20% in the last twelve months. Even though French papers and magazines depend less on advertising for their survival than their Anglo-Saxon counterparts do, it’s a matter of concern.
There is no room for finger-pointing here: media buying people are doing their job, which is getting the best bang for their client’s buck. But medias can team up and propose (or impose) advertising packages based on socio-demographic structures, for instance. To a large extent, Rolex or Mercedes-Benz don’t give a damn whether they are favoring media X or Y as long as they are sure to reach the affluent people who might turn into customers. Or Nestlé’s baby food brands looking for child-rearing couples.

Logistics. When I’m traveling to New York, I’m always stunned to see half-empty delivery trucks emblazoned with the name of prominent newspapers, criss-crossing the city, sometimes twice a day (early and late edition). At the same time, I feel sorry for French publishers who have to deal with a distribution system so inefficient that it ends up with one point of sales for 2100 inhabitants versus Norway’s one for 360 people (no wonder why Norway’s rate of readership is four time higher than France’s). Up there, a cross-brands cooperation makes it economically viable to distribute newspapers in the most northern village during winter. In Paris, finding an open newsstand on a Saturday afternoon is an achievement. Read More »