Former AOL executive Ted Leonsis was frustrated: He'd produced a critically acclaimed documentary called Nanking, a film that looked at some Westerners who had protected Chinese civilians during a brutal, six-week attack by the Japanese army in 1937. But he was pretty sure the film, which premiered in 2007 at the Sundance Film Festival, would reach a relatively small audience.
Only a few hundred movie theaters in the U.S. will even show documentaries, and even those cinemas don't always give non-fiction films prime spots on their schedules. Distribution is a source of aggravation for many documentarians.
Unlike most filmmakers, though, Leonsis, who stepped down from day-to-day management at AOL at the end of 2006, had the wherewithal to do something about the situation. Last year he launched SnagFilms, a company that aims to distribute documentary films via the Internet. But rather than just stream its library of 650 titles through the SnagFilms site, the company is enabling portals, news sites and individual fans to share the movies through their own Web sites, blogs, Facebook home pages and other sites.
"Everyone talks about user-generated content," says Leonsis, who also is majority owner of NHL's Washington Capitals. "Let's talk about a new category called user-distributed content,"
Leonsis' Nanking, which will be available online for the first time Memorial Day weekend, is the centerpiece of an 10-film slate Snag is presenting during the holiday; each of the movies commemorates the heroism of soldiers and civilians during periods of war and conflict.
For films released in theaters Snag provides an opportunity for the documentaries to find new audiences. A blogger who is writing about alcohol abuse on college campuses, for example, might seek to embed in her blog a Snag video player that shows the movie Haze, a look at a drinking-related hazing incidents.
Filmmakers who make their movies available to Snag benefit in a few ways: For each film it includes a "Buy DVD" button that takes a viewer immediately to the documentarian's DVD distributor. Leonsis contends that many Snag users will only watch a portion of the film via the Internet, and that true fans will end up purchasing the film to watch on their home televisions.
Snag also sells advertising in the documentaries, and splits the ad revenue with the filmmakers. "We are writing checks to filmmakers every quarter," Leonsis says. "They're not always big, sometimes as small as $20 but sometimes more than $1,000."
Finally Snag offers users a chance to make an online donation to a cause of the documentary maker's choosing.
But for most directors who work with Snag, the main benefit is the opportunity to reach more people. "Filmmakers have never had this kind of opportunity before," says Steven C. Barber, whose film, Return To Tarawa, is part of Snag's Memorial Day slate. "I can get my film to every single country this way."
Barber's film has already run on Discovery's Military Channel, and many of the films in Snag's library have traveled a fairly conventional path for documentaries (film festival, theatrical or television premiere, DVD) before landing at Snag. But Snag CEO Rick Allen says the company is looking for more documentaries to launch on Snag, a concept that would upend the traditional theatrical distribution model.
(Entrepreneur Mark Cuban has also sought to disrupt theatrical release windows, showing films on his HDNet Movies channel two days before the film appears in theaters.)
Allen says it is too early to know if Snag's Internet-distribution efforts will cause major movie studios to think differently about their current models, but he does believe the film industry will go through lots of experimentation in the coming years.
"I think everybody believes that digital distribution is the wave of the future and they're all trying to figure our how it affects content delivery and content creation," Allen says. "I think people in large media organizations have seen the success of something like Hulu and its broadened people's ideas about how to get content out there and consumed."
[the article was originally published at http://money.cnn.com/2009/05/18/technology/mehta_docs.fortune/?postversion=2009051810]
Showing posts with label aol. Show all posts
Showing posts with label aol. Show all posts
Tuesday, May 19, 2009
Tuesday, May 5, 2009
Search Goes On - New Google ad chief points to untapped potential
NEW YORK Companies often go back to basics in lean times. That's a message Google's new ad leader, Dennis Woodside, plans to convey to marketers.
Woodside, 40, said that despite the fast growth of search advertising over the past seven years, much more can be done to tap into its potential, particularly as the pressure to prove ad effectiveness grows.
"There are still huge opportunities in search," he said in an interview at Google's office here. "There are clients still not understanding the scale of the opportunity."
Google is pushing an expanded definition of search, hoping to make money from YouTube by inserting advertiser videos into the search results page. By some measures, YouTube is second only to Google in search volume. So far, advertiser uptake has been modest, Woodside said. It will continue to try new formats on the site to find what works. "Over time, some of these things will break through," he said.
Although Google made ambitious forays into selling print, radio and TV advertising, it abandoned efforts with newspapers and radio, marking an embarrassing retreat. Woodside said Google remained committed to TV advertising, seeing it as an adjunct to its video efforts and an opportunity for Internet-like targeting and measurement.
"We're trying to create a feedback loop as you have with the Web," he said. Newspaper and radio programs failed because Google couldn't implement such systems.
Woodside, who was vp of the United Kingdom, Ireland and Benelux for Google, was named vp of Americas operations after Tim Armstrong left in March to helm AOL.
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i06056b3e43453484d1438c745e92c513]
Woodside, 40, said that despite the fast growth of search advertising over the past seven years, much more can be done to tap into its potential, particularly as the pressure to prove ad effectiveness grows.
"There are still huge opportunities in search," he said in an interview at Google's office here. "There are clients still not understanding the scale of the opportunity."
Google is pushing an expanded definition of search, hoping to make money from YouTube by inserting advertiser videos into the search results page. By some measures, YouTube is second only to Google in search volume. So far, advertiser uptake has been modest, Woodside said. It will continue to try new formats on the site to find what works. "Over time, some of these things will break through," he said.
Although Google made ambitious forays into selling print, radio and TV advertising, it abandoned efforts with newspapers and radio, marking an embarrassing retreat. Woodside said Google remained committed to TV advertising, seeing it as an adjunct to its video efforts and an opportunity for Internet-like targeting and measurement.
"We're trying to create a feedback loop as you have with the Web," he said. Newspaper and radio programs failed because Google couldn't implement such systems.
Woodside, who was vp of the United Kingdom, Ireland and Benelux for Google, was named vp of Americas operations after Tim Armstrong left in March to helm AOL.
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i06056b3e43453484d1438c745e92c513]
Thursday, April 30, 2009
AOL chief wants portal to focus more on user experience
SAN FRANCISCO (AdAge.com) -- Since leaving his post as sales chief of Google to run AOL, Tim Armstrong has kicked off a review of the long-ailing internet icon's vast array of brands, with an eye toward creating a simpler experience for both consumers and the ad community.
In an interview with Ad Age Editor Jonah Bloom here at the 4A's annual Leadership Conference, Mr. Armstrong made no guarantees about the long-term survival of AOL's current offerings, such as its MediaGlow publishing division or its Platform-A advertising platform or its numerous consumer-facing content brands. While he didn't detail any specific plans, he did say its portfolio has gotten cluttered.
"The understanding of the value of brands at AOL has gotten a little gray over time," he said in front of a crowd of ad agency CEOs, adding that the intense scrutiny of the company has had a negative effect. "The questioning from the outside" has actually bruised the company internally, he said. "There are cases where we have tens of millions of people touching a brand every day," but people inside AOL have forgotten the need to improve the products behind those brands.
Mum on spinoff
Mr. Armstrong shocked the ad business recently when he left the relatively comfy confines of Google for AOL, a trouble spot for Time Warner since its dial-up-internet-access business eroded with the advent of broadband.
More 4A's Leadership Conference Coverage:
No More Remembering What All Those A's Stand For
4A's Rebrands, Makes Other Changes in Bid to Stay Relevant in Changing Industry
Lately Madison Avenue, the media business and Wall Street have been waiting for a decision from Time Warner on whether it will spin off AOL and thus unravel one of the most calamitous mergers in business history. That decision could be revealed as soon as an earnings call tomorrow, according to a recent Bloomberg story.
Mr. Armstrong said he did not know whether the story was accurate.
Taking a page out of Google culture, he said he has put multiple executives on the task of simply studying all of AOL's brand assets and working on the Time Warner unit's mission statement. He's also met with 2,000 or so AOL employees, many in town hall meetings he's conducted.
Focus on user experience
Mr. Armstrong hinted at disapproval of the company's recent decision to allow Intuit to alter the AOL logo on the AOL home page by installing the TurboTax check mark in the "O" in AOL. "AOL needs to focus on the user experience," he said, and understand the "trade-off between that revenue and the user experience." He added, "I don't know how that decision was made, but I'd like to find out. ... There are lines to be drawn around brand monetization."
He said the future of AOL is as a "great, great, great internet products company, and products include content." He added, "People are not paying enough to put their ads on AOL content."
As Mr. Armstrong tries to sort out the future of the company, he is in part looking to the past. He said he's consulted with co-founder Steve Case as well as Ted Leonsis, AOL's vice chairman emeritus. Mr. Leonsis, who owns the Washington Capitals hockey team, even gave Mr. Armstrong a lucky green tie he wears to the team's games.
Mr. Armstrong also gave some details of the final moments of his last day at Google, owner of 5% of AOL, when, having already surrendered his security badge, he found his only way out of the building was through the loading dock.
[the article was originally published at http://adage.com/agencynews/article?article_id=136327]
In an interview with Ad Age Editor Jonah Bloom here at the 4A's annual Leadership Conference, Mr. Armstrong made no guarantees about the long-term survival of AOL's current offerings, such as its MediaGlow publishing division or its Platform-A advertising platform or its numerous consumer-facing content brands. While he didn't detail any specific plans, he did say its portfolio has gotten cluttered.
"The understanding of the value of brands at AOL has gotten a little gray over time," he said in front of a crowd of ad agency CEOs, adding that the intense scrutiny of the company has had a negative effect. "The questioning from the outside" has actually bruised the company internally, he said. "There are cases where we have tens of millions of people touching a brand every day," but people inside AOL have forgotten the need to improve the products behind those brands.
Mum on spinoff
Mr. Armstrong shocked the ad business recently when he left the relatively comfy confines of Google for AOL, a trouble spot for Time Warner since its dial-up-internet-access business eroded with the advent of broadband.
More 4A's Leadership Conference Coverage:
No More Remembering What All Those A's Stand For
4A's Rebrands, Makes Other Changes in Bid to Stay Relevant in Changing Industry
Lately Madison Avenue, the media business and Wall Street have been waiting for a decision from Time Warner on whether it will spin off AOL and thus unravel one of the most calamitous mergers in business history. That decision could be revealed as soon as an earnings call tomorrow, according to a recent Bloomberg story.
Mr. Armstrong said he did not know whether the story was accurate.
Taking a page out of Google culture, he said he has put multiple executives on the task of simply studying all of AOL's brand assets and working on the Time Warner unit's mission statement. He's also met with 2,000 or so AOL employees, many in town hall meetings he's conducted.
Focus on user experience
Mr. Armstrong hinted at disapproval of the company's recent decision to allow Intuit to alter the AOL logo on the AOL home page by installing the TurboTax check mark in the "O" in AOL. "AOL needs to focus on the user experience," he said, and understand the "trade-off between that revenue and the user experience." He added, "I don't know how that decision was made, but I'd like to find out. ... There are lines to be drawn around brand monetization."
He said the future of AOL is as a "great, great, great internet products company, and products include content." He added, "People are not paying enough to put their ads on AOL content."
As Mr. Armstrong tries to sort out the future of the company, he is in part looking to the past. He said he's consulted with co-founder Steve Case as well as Ted Leonsis, AOL's vice chairman emeritus. Mr. Leonsis, who owns the Washington Capitals hockey team, even gave Mr. Armstrong a lucky green tie he wears to the team's games.
Mr. Armstrong also gave some details of the final moments of his last day at Google, owner of 5% of AOL, when, having already surrendered his security badge, he found his only way out of the building was through the loading dock.
[the article was originally published at http://adage.com/agencynews/article?article_id=136327]
Friday, April 24, 2009
MySpace founders step aside
The founders of MySpace are leaving the helm of the pioneering Web site that made social-networking a mainstream phenomenon, as owner News Corp. seeks to reinvigorate the once-hot property it scooped up four years ago.
The pushing aside of Chris DeWolfe and Tom Anderson, whose contracts weren't due to expire until October, represents a pivotal test for the viability of social-networking sites. While social-networking sites such as MySpace and Facebook have exploded in popularity in recent years, they have struggled to generate the kind of revenue and earnings prospects that can sustain them as businesses over the long haul.
News Corp. now aims to show that a large conglomerate, with a portfolio that includes many old-media properties including newspapers, can succeed at that task.
People familiar with the situation said News Corp. was completing a deal to name former Facebook Chief Operating Officer Owen Van Natta as chief executive to succeed Mr. DeWolfe. He would report to Jon Miller, the former AOL chief executive who was recruited to join News Corp. this month in a newly created position of chief digital officer. Charged with all News Corp.'s stand-alone digital properties, he was particularly given the mission of shoring up MySpace.
Spokeswomen for News Corp. and MySpace both declined to comment beyond a news release. Messrs. DeWolfe, Anderson and Van Natta couldn't be reached for comment.
News Corp. sees MySpace as critical in its transformation from a conglomerate of traditional television, movie and newspaper businesses to a new-media titan. But while MySpace grew quickly following News Corp.'s purchase, last year its revenue fell short of executives' targets. News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.
MySpace is still the dominant social-networking site in the U.S. But its U.S. audience has fallen this year. In March, MySpace attracted 70.1 million unique visitors, down 3.6% from a year ago, according to comScore Media Metrix. Meanwhile, Facebook is nipping at its heels. Facebook surpassed MySpace's world-wide audience a year ago, and is growing fast in the U.S., with 61.2 million unique visitors in March, up 72% from a year earlier.
More broadly, MySpace, like other social-networking sites, still must overcome doubts about the medium's viability. Advertisers, for one, remain leery. "Advertising doesn't fit so neatly into a conversation that people are having among themselves," says Tom Bedecarre, chief executive of independent digital-ad firm AKQA. "The interruptive model of advertising hasn't been successful."
MySpace was founded in 2003 by Messrs. DeWolfe and Anderson. Their email marketing division of a Los Angeles company called eUniverse, which later renamed itself Intermix, was floundering, so they imitated a popular site at the time, Friendster.
They made two key improvements on Friendster: They allowed users to customize their profile pages, and they allowed users to create any identity they liked. Friendster, like Facebook today, encouraged members to use their real names.
But just as MySpace was taking off, fueled in large part by its popularity with musicians, it was sold to News Corp. MySpace's parent company, Intermix, negotiated the $650 million deal directly with News Corp., leaving the MySpace founders out of the loop until the last minute.
News Corp. Chairman Rupert Murdoch immediately sought to mollify the founders with lucrative two-year pay packages of $30 million each, but Messrs. DeWolfe and Anderson still chafed at the fact that MySpace ad sales were taken over by executives at Fox Interactive Media, according to people familiar with the situation.
The rank and file of MySpace were also angry that their stock options were canceled after the acquisition and that they were forced to move from Santa Monica, Calif., to Beverly Hills, the people said.
Relations fell apart further. Mr. DeWolfe ignored suggestions from Fox Interactive Media President Ross Levinsohn about ways to improve the site. Mr. DeWolfe sought to amend a $900 million advertising deal News Corp. cut with Google Inc. -- delaying its implementation, the people said. That deal is due to expire next year.
Mr. Levinsohn also clashed with Mr. Anderson, who is president of the site. Mr. Anderson controlled the product development and was criticized for not moving fast. In April 2006, MySpace bought the online karaoke service kSolo. MySpace launched the karaoke feature on its site in April 2008 -- two years later.
The tension between the MySpace founders and News Corp. eventually led to Mr. Levinsohn's dismissal in November 2006. He was succeeded by his distant cousin, Peter Levinsohn, who eventually gave Mr. DeWolfe control of the advertising sales at MySpace that he had sought.
All this time, Facebook was steadily gaining on MySpace. Founded by Silicon Valley computer programmers as a social network for Harvard students in 2004, Facebook expanded to other college campuses and opened to everybody in 2006.
Facebook focused on building innovative features and encouraging third-party software developers to write applications to run on Facebook.
Meanwhile, MySpace, with its marketing and music background, fought back with entertainment, such as a celebrity news site and an expensive music joint venture.
Three top MySpace executives, including Amit Kapur, former chief operating officer, left the company in March to work on a start-up. MySpace has yet to name successors for those positions.
Mr. Miller began discussing the job with potential candidates including Mr. Van Natta, but hadn't finalized anything when the news of the talks leaked, according to people familiar with the situation. Mr. Van Natta helped expand Facebook but stepped into a less prominent role as chief revenue officer as the site grew, ultimately leaving the company in February 2008. At MySpace, he could serve as a bridge between Silicon Valley and MySpace, which has struggled to match Facebook's technology prowess.
Hearing of the talks, Mr. DeWolfe called Mr. Miller to discuss his future, these people said.
In the statement News Corp. released Wednesday announcing the move, it said Mr. Anderson would take on a new role in the organization. It said Mr. DeWolfe will continue to serve on the board of MySpace China and will be a strategic adviser to the company.
[credit : http://online.wsj.com/article/SB124043324710044929.html]
Wednesday, April 15, 2009
StumbleUpon Goes Independent Again
Less than two years after eBay purchased StumbleUpon for $75 million, the recommendation engine is a standalone company once again.
In a blog post, co-founder "gmc" reported that the company is "now a startup again". Gmc, co-founder Geoff Smith, and "several great investors" have taken the comp-any independent again. Terms were not disclosed.
"This change will help StumbleUpon move quickly and stay true to its focus - helping people discover interesting web content," Gmc wrote. "Our goal is to make StumbleUpon the web's largest recommendation engine and we think this is the best way to get us there.
"Thanks to everyone for helping make this happen," Gmc added. "While there will be some internal changes at SU, it will not impact the Stumbling experience and will help us create the best possible product. We are really excited about this change, and hope you are as well."
Originally, eBay said that it had acquired StumbleUpon for the synergies between the two companies. eBay was drawn to StumbleUpon because of the "engaging and unique experience" provided by its toolbar and because of the "similarities in our approaches to the concept of community," Michael Buhr, senior director at eBay, said in 2007. But eBay never quite assimilated StumbleUpon into its overall business model.
eBay has also been heavily scrutinized for its $4.1 billion acquisition of Skype in 2005 which has also been criticized as a deal that never achieved the synergies that executives originally promised.
StumbleUpon, meanwhile, was originally said to also be a takeover target by Yahoo and AOL, among others.
[credit : http://www.pcmag.com/article2/0,2817,2345229,00.asp]
In a blog post, co-founder "gmc" reported that the company is "now a startup again". Gmc, co-founder Geoff Smith, and "several great investors" have taken the comp-any independent again. Terms were not disclosed.
"This change will help StumbleUpon move quickly and stay true to its focus - helping people discover interesting web content," Gmc wrote. "Our goal is to make StumbleUpon the web's largest recommendation engine and we think this is the best way to get us there.
"Thanks to everyone for helping make this happen," Gmc added. "While there will be some internal changes at SU, it will not impact the Stumbling experience and will help us create the best possible product. We are really excited about this change, and hope you are as well."
Originally, eBay said that it had acquired StumbleUpon for the synergies between the two companies. eBay was drawn to StumbleUpon because of the "engaging and unique experience" provided by its toolbar and because of the "similarities in our approaches to the concept of community," Michael Buhr, senior director at eBay, said in 2007. But eBay never quite assimilated StumbleUpon into its overall business model.
eBay has also been heavily scrutinized for its $4.1 billion acquisition of Skype in 2005 which has also been criticized as a deal that never achieved the synergies that executives originally promised.
StumbleUpon, meanwhile, was originally said to also be a takeover target by Yahoo and AOL, among others.
[credit : http://www.pcmag.com/article2/0,2817,2345229,00.asp]
Monday, April 13, 2009
Twitter’s Bestest Search Friend? Google and Microsoft Engage in Yet Another Pick-Me Face-Off
In this digital era’s version of “Spy Vs. Spy,” Microsoft and Google find themselves in yet another sharp-elbowed battle to be the one to strike some kind of commercial search deal or product partnership with Twitter, many sources with knowledge of the situation said, as they also jockey for position to evaluate the potential of the much-hyped microblogging start-up.
After last week’s explosive rumor that Google was in “late-stage” talks to acquire Twitter, which BoomTown reported was wildly premature, I set out to try to sort out exactly what was going on.
As I found out, there was a lot–mostly much talking related to possible product and distribution partnerships, centered around Google or Microsoft, especially around a deal to become the one to exclusively deliver search or other similar services to Twitter properties.
The reason for the interest? Many think Twitter’s real-time search of its 140-character “tweets” posted by users on the service will become the next great battlefield in search. Google currently dominates the general search market, with third-place Microsoft struggling to get more share.
But how to do that is in flux, as past efforts at various third-party search arrangements have had mixed success for both Google and Microsoft. Both companies and also Twitter are trying to figure out new ways to do such deals.
On top of that, it is also unclear if Twitter wants to strike a deal purely to get a payment from either Microsoft or Google, as others have done. Twitter management has indicated that they are much more interested in growth and distribution over a revenue focus.
Twitter Co-founder Biz Stone said as much on the start-up’s Web site recently, as well as in many media interviews, noting that it will begin experimenting with its own business ideas this year.
In other words, the talks Twitter is having with both Google and Microsoft could also lead exactly nowhere too.
Along with the commercial talks, both Microsoft (MSFT) and Google (GOOG) are also trying to figure out if Twitter is simply one of the many shooting stars that are far more typical in Silicon Valley or if it is sea-change start-up worth pursuing and paying up big-time to acquire.
“As impressive as what Twitter has done, we are all overexcited,” said one source. “And so it’s hard to figure out the right thing to do with all the pressure to do something.”
Thus, while an offer for Twitter from Microsoft, Google or a plethora of other players–from News Corp. (NWS) to Yahoo (YHOO) to Cisco (CSCO) to Time Warner (TWX) online unit AOL to big telcos–could come at any time, said many sources, only a huge price would lead to an acquisition, especially since the growth of the service has been accelerating more rapidly in recent months than has been reported publicly.
This all makes for dicey times at Twitter, which sits at the center of all this noise, trying to build a company, while also being fully cognizant that trying to engineer a massive buyout could be its best outcome.
Further complicating the situation: The fact that Twitter co-founder and CEO Evan Williams–who has already sold one company, Blogger, to Google and eventually left after a lackluster experience, a common one of many entrepreneurs who sell out early to large companies–is less interested in selling out than in growing the company.
But without the kind of control of the company’s fate–which allowed Facebook founder and CEO Mark Zuckerberg to effectively block similar buyout pressures early in its history–Twitter’s founders also might not get the last word in the event of an unusually attractive offer.
While a $500 million stock-and-cash one from Facebook last fall was turned away by Twitter due to worry about the social-networking site’s market valuation, the massing interest is overwhelming and forcing it to make some clear decisions about it path.
“When you are in a situation like Twitter is in, you have to wonder if this is the high-water mark and it is time to sell out or if you are underestimating yourself badly by even considering that,” said one Silicon Valley entrepreneur who has been in a similar spot in the past. “It can be very hard to think straight.”
Indeed, all the attention is both distracting and slightly surreal for its top execs and small 30-person staff in San Francisco, said many sources close to the situation, especially the mass of media that resulted due to that now-discounted rumor that Twitter was poised to be sold off for a giant pile of money.
In fact, Twitter has its hands full enough scaling its recent surge in growth and keeping the service humming along (it has had tech snafus in the past).
But for Google and Microsoft, this geopolitical one-upsmanship by the Internet’s two most important companies is quite familiar, and they have not hesitated to jump into the Twitter tempest.
fire-drill
If that sounds a lot like the two-month fire drill in 2007 that resulted when Microsoft and Google competed to see who could sidle up closest to then-belle-of-the-Silicon-Valley-ball Facebook, you are exactly right.
After much huffing and puffing back and forth and this way and that way, it resulted in a Microsoft “win,” which gave it the distinct honor of forking over $240 million to own 1.6 percent of Facebook at an astonishing $15 billion valuation.
Even as Facebook has grown quickly in size since then–to 200 million users, as announced yesterday–its valuation has dropped to $3 billion to $5 billion.
Microsoft had previously struck an search ad deal in the U.S. with Facebook in which it paid a guaranteed revenue to Facebook and later also did a deal to do some of the search on the site.
Such kinds of deals have become common for both Google and Microsoft in recent years. Google struck one with News Corp. social-networking site MySpace, as well as with AOL (which will also soon come up for renewal).
And Microsoft grabbed the right to pay Digg a guaranteed fee in another online ad deal. And the pair also fought more recently over a mobile search distribution deal with the wireless unit of Verizon (VZ).
And so it goes now with Twitter.
No partnership deal has been made as yet, of course, since such a thing would say a lot about Twitter’s future, since the prospect of marriage overhangs such a choice, which is also–in essence, a declaration of allegiance in the cold war between Google and Microsoft.
If that also sounds like a plot of a James Bond movie, with geeks armed with algorithms instead of gadgety weaponry, you’re also exactly right.
[read more : http://kara.allthingsd.com/20090409/who-will-be-twitters-bestest-search-friend-google-and-microsoft-engage-in-yet-another-pick-me-face-off]
After last week’s explosive rumor that Google was in “late-stage” talks to acquire Twitter, which BoomTown reported was wildly premature, I set out to try to sort out exactly what was going on.
As I found out, there was a lot–mostly much talking related to possible product and distribution partnerships, centered around Google or Microsoft, especially around a deal to become the one to exclusively deliver search or other similar services to Twitter properties.
The reason for the interest? Many think Twitter’s real-time search of its 140-character “tweets” posted by users on the service will become the next great battlefield in search. Google currently dominates the general search market, with third-place Microsoft struggling to get more share.
But how to do that is in flux, as past efforts at various third-party search arrangements have had mixed success for both Google and Microsoft. Both companies and also Twitter are trying to figure out new ways to do such deals.
On top of that, it is also unclear if Twitter wants to strike a deal purely to get a payment from either Microsoft or Google, as others have done. Twitter management has indicated that they are much more interested in growth and distribution over a revenue focus.
Twitter Co-founder Biz Stone said as much on the start-up’s Web site recently, as well as in many media interviews, noting that it will begin experimenting with its own business ideas this year.
In other words, the talks Twitter is having with both Google and Microsoft could also lead exactly nowhere too.
Along with the commercial talks, both Microsoft (MSFT) and Google (GOOG) are also trying to figure out if Twitter is simply one of the many shooting stars that are far more typical in Silicon Valley or if it is sea-change start-up worth pursuing and paying up big-time to acquire.
“As impressive as what Twitter has done, we are all overexcited,” said one source. “And so it’s hard to figure out the right thing to do with all the pressure to do something.”
Thus, while an offer for Twitter from Microsoft, Google or a plethora of other players–from News Corp. (NWS) to Yahoo (YHOO) to Cisco (CSCO) to Time Warner (TWX) online unit AOL to big telcos–could come at any time, said many sources, only a huge price would lead to an acquisition, especially since the growth of the service has been accelerating more rapidly in recent months than has been reported publicly.
This all makes for dicey times at Twitter, which sits at the center of all this noise, trying to build a company, while also being fully cognizant that trying to engineer a massive buyout could be its best outcome.
Further complicating the situation: The fact that Twitter co-founder and CEO Evan Williams–who has already sold one company, Blogger, to Google and eventually left after a lackluster experience, a common one of many entrepreneurs who sell out early to large companies–is less interested in selling out than in growing the company.
But without the kind of control of the company’s fate–which allowed Facebook founder and CEO Mark Zuckerberg to effectively block similar buyout pressures early in its history–Twitter’s founders also might not get the last word in the event of an unusually attractive offer.
While a $500 million stock-and-cash one from Facebook last fall was turned away by Twitter due to worry about the social-networking site’s market valuation, the massing interest is overwhelming and forcing it to make some clear decisions about it path.
“When you are in a situation like Twitter is in, you have to wonder if this is the high-water mark and it is time to sell out or if you are underestimating yourself badly by even considering that,” said one Silicon Valley entrepreneur who has been in a similar spot in the past. “It can be very hard to think straight.”
Indeed, all the attention is both distracting and slightly surreal for its top execs and small 30-person staff in San Francisco, said many sources close to the situation, especially the mass of media that resulted due to that now-discounted rumor that Twitter was poised to be sold off for a giant pile of money.
In fact, Twitter has its hands full enough scaling its recent surge in growth and keeping the service humming along (it has had tech snafus in the past).
But for Google and Microsoft, this geopolitical one-upsmanship by the Internet’s two most important companies is quite familiar, and they have not hesitated to jump into the Twitter tempest.
fire-drill
If that sounds a lot like the two-month fire drill in 2007 that resulted when Microsoft and Google competed to see who could sidle up closest to then-belle-of-the-Silicon-Valley-ball Facebook, you are exactly right.
After much huffing and puffing back and forth and this way and that way, it resulted in a Microsoft “win,” which gave it the distinct honor of forking over $240 million to own 1.6 percent of Facebook at an astonishing $15 billion valuation.
Even as Facebook has grown quickly in size since then–to 200 million users, as announced yesterday–its valuation has dropped to $3 billion to $5 billion.
Microsoft had previously struck an search ad deal in the U.S. with Facebook in which it paid a guaranteed revenue to Facebook and later also did a deal to do some of the search on the site.
Such kinds of deals have become common for both Google and Microsoft in recent years. Google struck one with News Corp. social-networking site MySpace, as well as with AOL (which will also soon come up for renewal).
And Microsoft grabbed the right to pay Digg a guaranteed fee in another online ad deal. And the pair also fought more recently over a mobile search distribution deal with the wireless unit of Verizon (VZ).
And so it goes now with Twitter.
No partnership deal has been made as yet, of course, since such a thing would say a lot about Twitter’s future, since the prospect of marriage overhangs such a choice, which is also–in essence, a declaration of allegiance in the cold war between Google and Microsoft.
If that also sounds like a plot of a James Bond movie, with geeks armed with algorithms instead of gadgety weaponry, you’re also exactly right.
[read more : http://kara.allthingsd.com/20090409/who-will-be-twitters-bestest-search-friend-google-and-microsoft-engage-in-yet-another-pick-me-face-off]
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