Provocative post by Jason Calacanis on the Bloglines sale. He says it's "a horrible business and it will never make money." The reason? He reckons "95-99% of the RSS reader market" will belong to the Big 3 of Yahoo, Microsoft and Google within 2 years. That's the 'bigco will crush littleco' theory, which is an easy one to throw about (I've done it myself).
What's really intriguing about Jason's post is that he has some interesting inside information about Bloglines' touted contextual advertising strategy. Remember the story that broke back in mid-December when Mark Fletcher spoke to Jupiter Research analyst Eric Peterson? At the time, very few bloggers linked to it or showed any interest in what Bloglines was planning. But I wrote about it and soon after Mark Fletcher himself referenced my post (after first commenting on my earlier RSS market share post). Mark wrote on 20 December:
"In another post, Richard MacManus points to a blog post by Jupiter Research analyst Eric Peterson based on a conversation Eric and I had last week. Eric was interested in the business model behind Bloglines. Not accepting my usual stock answer of "Volume!", I detailed that we will integrating highly targetted contextual advertising into Bloglines next year, or "Adwords on Steroids" as Eric puts it (I like that description!). To reiterate what I told Eric, when we do start to roll out advertising, we will be very sensitive to user feedback, and we will be looking to our users to help guide us in this area."
With the benefit of hindsight, I'm wondering now if Mark was 'testing the market' with his announcement that Bloglines would be doing contextual advertising in 2005? He certainly got some swift (and passionate) responses from users - and the outlook wasn't good. Martin Schwimmer, a trademark lawyer, demanded that Bloglines remove his RSS feed from their service and Bloglines quickly complied. The upshot of that case was that although Schwimmer was mostly condemned in the blogosphere for his stance, the fact remained he had highlighted a legal grey area - and Bloglines had backed down.
Now we find out that Jason Calacanis was also having a behind-the-scenes conversation with Mark Fletcher. Here's how Jason puts it in his latest post:
"...after a half dozen emails he [Mark Fletcher] finally got back to me to promise he wouldn’t sell ads against our blogs. He claimed he was just speculating about possibilities. OK, sure.
Of course, he did have to promise me because I—and the other blog publishers out there—would never let him sell ads against our full-feeds, let alone target our users."
So there was a fairly blunt warning that weblogsinc for one would not have put up with contextual adverts wrapped around their content in Bloglines. I suggested in my Web 2.0 weekly wrap-up last week that "the Martin Schwimmer episode might have spooked Bloglines into abandoning their contextual advertising strategy, in favour of quick bucks in the current RSS/blogging investment frenzy". So yes I think that Bloglines was scared off the contextual adverts strategy, by Schwimmer and Calacanis (probably others too).
I also wonder whether it was a purposeful 'leak' by Mark to Eric Peterson back in December, in order to get a gauge on how content producers would react to the advertising idea. It certainly saved him time, money and a lot of grief - imagine if Bloglines had rolled out the contextual adverts and only then found out that users were up in arms about it.
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I don't mind if bloglines places ads against my feeds, I just want to be cut in on the equation.
Posted by: Earle | February 11, 2005 1:27 AM
I don't think I have any problem with Bloglines selling ads against my feeds, either. I don't think I understand the issue with it. In my opinion, Bloglines makes the best RSS reader out there and as long as they're not charging me, why should they not make money? Google does it with GMail and everyone still loves it. I might be completely missing something here, but it seems to me that if we're getting a great product it's got to cost something. If that cost were some contextual advertising, I wouldn't have a real problem with it. I don't think. Any thoughts Richard?
Posted by: Noah | February 11, 2005 1:58 AM
I've given it some more thought, and realize that I'm looking at it from a consumer point of view and not from the point of view of a publisher trying to make money off their feed. However, I must say, that if Bloglines started selling advertising against Engadget and Calcanis pulled his feed, I'd just stop reading Engadget. As much as I like it, it doesn't bother me Bloglines would advertise against it and it's not like the ads already in Engadget would go anywhere.
I've made some more comments on my site if you're interested. (http://www.noahbrier.com/archives/2005/02/bloglines_adver.html)
Posted by: Noah | February 11, 2005 8:07 AM
The problem with aggregating feeds and advertising was one of the reasons I closed down rollup.org. Not the only reason, but one of the key ones. Didn't want to be on the wrong side of this.
I would be interested to know if folks see a difference between aggregating summaries and full content. In other words, if an aggregator only displays item summaries, is it OK to serve contextaul ads against that?
And further to that, what if the advertising is just dumb ads (not contextual), so doesn't rely on the aggregated content itself to drive context. Does this make a difference?
I think the answer is no in both instances. No, it is not OK to aggregate summaries and serve contextual ads, and No, any kind of advertising isn't cool.
I wonder what Nick Denton (Kinja.com) thinks of all this.
Posted by: Charles | February 14, 2005 4:00 AM
As the Web becomes a web better designed for machine consumption far more than now, the issues of privacy and copyright will only become more important simply because at least for a while, IMO, there's not gonna be any solid standardized trust infrastructure on the web that will tell the machines which ones they're "allowed" to consume without violating the author's (or the content owner's) privacy and copyrights. (Remember how the anti-spam coalition simply fell apart last year.)
Pershaps due to the success Bloglines has enjoyed, Bloglines hasn't had to suffer much from copyright controveries, maybe except for the ads problems you mention in this post and the Schwimmer episode. But here's a story about what happened in Korea. Daum (http://www.daum.net) is the No.1 portal in Korea, with about over 20 ~ 30 million regular visitors on a daily basis (used to No.3 on the Alexa internet traffic research only next to Yahoo and msn). With its size in mind, in order to go with the trend and also to jump into the huge blogging market in Korea (there are over 10 million bloggers in Korea estimated right now), they started a Bloglines-like service. I personally liked it a lot and considered a good move by the company. Then, boom. Tons of bloggers get infuriated and begin a boycott movement against Daum because they felt that Daum was "stealing" their own contents without permission (copyrights) and revealing their personal lives to the whole world (privacy). Daum developers responded pretty quickly (probably in fears) by displaying the author's name next to every single blog title and putting "see the original" button next to every post title. Of course, this was done to shun the blame Daum would get for making it look like it's their own content. Things kind of have settled down but there were huge atmosphere changes among Korean bloggers, some taking extremes as to quit blogging for good. As an adorer of Bloglines and as someone who was so excited to see such a service developed in my own country, I first kinda scoffed at the whole movement as lack of technical knowledge by the bloggers, but it didn't take me long to be a human and to start totally understanding where they were coming from. I probably would want to beat up whoever made the services if I start seeing all the travel agency ads next to my post written on the precious honeymoon trip to Hawaii.
And there's no guarantee that this wouldn't happen in other parts of the world. (very well explained in the EPIC video where NYT and Google go head-on-head against each other). While Rip-Burn-Mix is the one of the most fascinating aspects of Web 2.0, we sometimes take it for granted that it must be done at the mercy of content producers.
So I humbly suggest you take some time and maybe share some thoughts on the copyright/privacy issue. (I just call the whole thing part of the "Web of Trust" in the Semantic Web world). Just wanna hear how you think about it b/c I'm sure you've been thinking about this for a long time by now. ;)
(I had to put this long long comment up here b/c for some reason I still can't get my trackback thing to get to work. Yeah, I use Wordpress and I belong to the lowly 2% group ;) )
Posted by: Taewoo Danny Kim (twdanny) | February 18, 2005 3:27 AM