Facebook IPO shows galactic divide between investors

Are publishers kicking the can down the road when it comes to user privacy?

Privacy has been a thorny issue for publishers since the Web began. Most dealt with it in a simple way: get the lawyers to do a privacy policy, make sure not to use personally identifiable information and regularly point out the direct-mail industry is the one that should get the real scrutiny.

That lasted until it didn’t. The threat of Do Not Track legislation spurred the industry into action on the self-regulation front in order to head off government rules. The problems of protecting consumer privacy in the modern digital world is fiendishly complex. You can forgive many publishers for believing this is an issue that shouldn’t even involve them very much.

“The biggest issue for most publishers is aggressive third-party ad networks who collect data about a publisher’s readers without the publisher knowing,” said BuzzFeed CEO Jonah Peretti.

“I think the battle ground of privacy isn’t happening around content properties,” added Troy Young, president of Say Media. “It’s way more to do with Facebook in particular. There’s user-experience issues that pertain to privacy; when you customize experience based on someone’s social graph, it needs to be explained to users.”

In the run-up to Facebook’s $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank’s consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company.

The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast.

The Oatmeal is a fantastic comic that I recommend that you make a habit of reading. However, even the greatest can go astray, and I’m pained to admit that The Oatmeal has done so regarding someone I regard very highly, and that’s Nikola Tesla. Alas, The Oatmeal has fallen prey to Tesla idolatry, confusing his genius for godhood and of course, setting up the now all-too-common ‘Edison as Tesla’s arch-villain’ narrative.

There are quite a few errors and misconceptions about both Tesla and Edison in this comic. But they’re errors that I’ve seen before and are often repeated, so it’s worth the time, I think, to address some of the big ones.

The music industry has a love-hate relationship with digital media. On the one hand, the Internet obliterated the music industry’s business model. But, on the other, digital has proven an amazing tool for artists to spread their work and connect with fans. Digiday spoke with Russell Wallach, president of Live Nation, about the future of music in a digital world.

Has the transition from analog to digital been a net positive for musicians?
From a pure ticket-sales perspective, music has never been more popular. We sell 80-plus percent of our tickets online. We’re seeing explosive growth in the sale of tickets via the mobile device. Combine that with social media, we continue to see great opportunities for new and innovative ways to market shows via online, mobile and social, and new and innovative ways for fans to purchase tickets. To me, that equals long-term, creating revenue for the artist. For mobile technology, fans will have the opportunity to purchase merchandise from their seat. Before the show, purchase content and other products of the artist — clearly the new social and e-commerce are providing new ways for bands to generate revenue.

Click through to read the rest of the interview with Live Nation’s president, Russell Wallach.

I got a peek behind the curtain:

Inside The New York Times building, there’s always a hum. And it’s not solely emanating from the multi-floor newsroom. It comes from the 28th floor, where Michael Zimbalist and his team of roughly a dozen staffers of the New York Times R&D Lab are sequestered from the rest of the The Gray Lady’s reporters, executives and staff. The NYT R&D Lab has the vital task of looking around corners and finding the future of how news and information will be delivered and consumed. Zimbalist and his team wanted to be in the building with the rest of the company but also wanted a distinctive space that would make it clear that the R&D folks are not part of the normal operations.

The R&D Lab looks at what the intersection of news information, consumer behavior and technology will be like in the next three to five years. There are some out-of-the-box projects, like its Surfacereader (a table-top news reader) and an in-progress database of New York Times content. The lab, up and running since 2006, would seem a curious luxury in an era of austerity in newsrooms, even at the Times. In fact, the company recently laid off 50 non-newsroom people. What’s more, it’s not as if the R&D unit hasn’t had any breakout successes in its seven years of existence.  It has.  But, according to Zimbalist, the goal of R&D is to understand how news may be consumed in the future and to push new ideas inward (rather than product development).

We’re in the era of data everywhere. As the Web becomes more social (not there yet — see below), publishers have to look at even more touch points. We spoke with Sachin Kamdar, CEO of social analytics company Parse.ly, about some of the hurdles publishers keep tripping over.

What is biggest issue facing publishers when it comes to understanding social data?
The biggest issue is being able to aggregate other metrics with social data. What publishers do right now is think about social as its own silo. How many shares on Twitter, how many shares on Facebook? How does it intersect with the audience? They need to use pieces of data to come up with a social strategy moving forward. There’s a data problem now, as they aggregate across other data areas of their property. There needs to be one data stream. It’s about being able to surface those intersections for the publishers. Is my social audience different than the standard reader that visits? If so, how do I get them to stay and then share and comment and engage with them?

What are some mistakes that publishers make when looking social data?
The mistake is not going far enough; people treat social as a linear one-off thing — dropping a few social buttons on my site will be enough to get content viral. The other thing is that they just tweet out their own articles. Many publishers will treat social as an RSS feed and link to every post they have. This is not a way to engage with audience. Some digital companies don’t realize it’s not a one-way street. Content is your property; people are talking about it, so engage with them.

So it sounds like publishers need to look at themselves as brands?
I would take it a step further. Not only are publishers brands but so are the content creators themselves. They (reporters) should have all the data transparent to them to understand what audience is resonating with them from a social perspective and leverage that data to grow the audience.

But do publishers have resources to do this?
It takes technology to do it. When you think about this, they have to quickly pull in information from social networks into an interface for someone to understand how the data intersects. It would take someone sitting there and listening to what’s happening. There are free tools that can do an OK job; Google Analytics is a good way to start and may have to use that. But it’s more about letting content creators have their conversations about content and engage audiences in a multidirectional fashion, as opposed just posting on the site and waiting for comments.

Has the Internet fully moved from an SEO model to a social model?
Not yet. Search still very much accounts for a good portion of traffic. If you look at growth between the two, social is edging up where search was. Search is sort of flat; someone searches for something, you might now know their keyword. With social, you know the audience and brand and all the things that are interactive with social. It presents an opportunity to build an audience and engage with them. Publishers should leverage the fact that content is sharable; use it to your advantage as a publisher. When you think about social vs. search, SEO is almost commoditized to a certain extent in terms of practices, and in another sense, Google is always changing its algorithm, so it’s tough to optimize without spending a lot of money. The best bet is social where you have the ability to engage and optimize, and don’t need to spend money on an SEO tool or consultant. If you have important things to say, great content, you can use social to augment and push that so content reaches the potential you have instead of relying on search to drive traffic. It can be proactive instead of reactive.

When ESPN launched in 1979, there was no way to know that it would become the worldwide leader in sports. Three decades later, the Bristol, Conn.-based company dominates all aspect of sports coverage because of one simple philosophy: serve sports fans anytime, anywhere. The anywhere part has evolved to go beyond physical location, as the sports giant has figured out how to publish across the myriad platforms its audience uses to consume sports information.

Publishing across platforms isn’t as simple as taking content from one medium and placing it on another. Audiences use different devices and platforms in different ways. How you consume content on TV is different than how you consume content on a desktop or on a phone or on a tablet. ESPN understands this exceptionally well and has been on the cutting edge — with some fails along the way — of delivering content to its audience.

Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom’s opening number, $2 billion, and whittled it down over several meetings at Mr. Zuckerberg’s $7 million five-bedroom home in Palo Alto. Later that Sunday, the two 20-somethings would agree on a sale valued at $1 billion.

It was a remarkably speedy three-day path to a deal for Facebook—a young company taking pains to portray itself as blue-chip ahead of its initial public offering of stock in a few weeks that could value it at up to $100 billion. Companies generally prefer to bring in ranks of lawyers and bankers to scrutinize a deal before proceeding, a process that can eat up days or weeks.

Mr. Zuckerberg ditched all that. By the time Facebook’s board was brought in, the deal was all but done. The board, according to one person familiar with the matter, “Was told, not consulted.”

Mr. Zuckerberg owns 28% of Facebook’s stock, and controls 57% of its voting rights, giving him the freedom to act independently if he wants. Mr. Systrom, similarly, owns about 45% of his company. That control means investors must accept the fact that the CEOs can move quickly.

The kids are running the show. Having 57% of the voting rights — forever — means that Zuck really never has to go through the board for anything. Scary.

Also, asking outrageous sums of money for products based on selling your information so advertisers can market to you is our reality, isn’t it? 

Last year, when “The Girl With The Dragon Tattoo” was released in theaters, ApartmentTherapy.com noticed something weird in its social analytic dashboard: its audience was heavily talking about the film across the social Web. A light bulb went off: Let’s take an archived article from 2010 showing where people can buy furniture that was described in protagonist Lisbeth Salander’s room and repurpose it for those who seemed to be really, really interested (as based on the traffic coming from the social nets). The result: a huge spike in traffic, to the tune of up to almost 4,000 hits that day, 2,000 the following and then another little spike the following week, according to ApartmentTherapy’s CEO Maxwell Gillingham-Ryan.

Publishers have been looking at data for many years now. If you were a publisher 10 years ago, you probably spent a lot of time banging your head against your desk trying to figure out how to use SEO data to help drive traffic or even create easily searchable content. There’s clearly more data to comprehend today, much of it coming thanks to social media. Publishers are now regularly tapping into those pools of social data to inform, and even dictate, the content they create.

Editors at outlets from New York Magazine to Complex Media to GamesRadar.com pay attention to this data as it can push certain editorial decisions, giving insights into what an outlet’s readers are interested in.

“We write for an audience and care what people are responding to,” said Ben Williams, editorial director at New York Magazine, which uses Newsbeat. “That’s a factor in deciding what types of stories we do tomorrow, today or even next week.”

Social data helps publishers understand what content is performing well, and it also gives clues about how to improve content that doesn’t perform as well (based on drive traffic). Repackaging a story to get more traffic is nothing new. Something as simple as tweaking a headline to draw attention to the story has been happening for years. What is new, however, is the real-time analytics that give publishers a better understanding of up-to-the-minute discussions surrounding particular articles.

Click through to read the rest. I had a fun time working on this one.

Are our freedoms rapidly descending a slippery slope? 

Aware of the issues surrounding privacy, the contract explicitly states that Obscure Technologies will only crack consoles purchased out of the United States for the duration of the research. As for the data to be extracted from the overseas consoles, the DHS plans on making their research and data publicly available at conferences and academic journals, but under the “constraints of the Common Rule (CFR 46) governing the use of human subject data.” In other words, any identifiable information pertaining to the owner of the consoles will be scrubbed.

While law enforcement officials have expressed their interest in obtaining gaming information for the purpose of identifying predators and terrorists, you can’t help but wonder about how officials will begin using the to be developed technology for the other purposes, as well.