Category: Quigo

Yahoo, Newspapers and Quigo

Yaron GalaiLeave a comment

Finally some good news for Yahoo… Today it announced a partnership with 176 newspapers. Coverage on TechCrunch, NY Times, PaidContent, and others.

From the NY Times:

A consortium of seven newspaper chains representing 176 daily papers across the country is announcing a broad partnership with Yahoo to share content, advertising and technology…

This sounds to me a little like the beginning of the "Switzerland Inc." that Tom Mohr (ex-President of Knight Ridder) described in his manifesto a few months ago (this very important doc is behind a password on Editor&Publisher… urrggghhh! No link love here!… see Greg Sterling’s blog for some snippets).

From it:

To win, industry
leaders must adopt a Marshall Plan embodying two key objectives: the
migration to common platforms, and the acquisition of the ability to
sell top-quality online product to our advertisers. To fulfill these
objectives, the independent companies of a proud industry must
aggregate into an industry-wide network. In this network, each company
must cede some control over its digital future into a “Switzerland”
organization that manages the network.

Seems like Yahoo is now tackling some of the pieces of the first part – offering common technology platforms for classifieds, maps, etc.

On the second part, Quigo (full disclosure: which I founded, and am employed at) is the undisputed leader. As the NAA recently pointed out in a research called "Online Newspapers’ Response to Google":

"…Quigo easily took the category, having affiliations with half the respondents."

With Yahoo handling the classifieds/syndication/maps areas, and Quigo handling the performance-based advertising, it seems like the newspapers are starting to put together those building blocks for creating a Switzerland Inc. that will survive (and hopefully thrive!) through the Google storm.

Share this post!

Fox outfoxed by Google

Yaron GalaiLeave a comment

Gootube
According to TechCrunch, some executives at Fox are unpleasantly surprised by Google’s acquisition of YouTube:

A source inside of Fox, which owns MySpace, tells us that they were surprised that Google was aggressively pursuing a deal with YouTube, given Google’s nearly $1 billion advertising relationship with MySpace. MySpace views YouTube as a competitor, and recent Hitwise data shows Myspace Video quickly catching up to YouTube.

The only surprise is that Fox is surprised by this.

Last month when the MySpace-Google deal was announced, I wrote this:

MySpace is essentially outsourcing its kitchen
over to Google and becoming another node in its network. When that
happens, MySpace will actually deliver *less* traffic to retailers,
while feeding the Google beast and giving it an even bigger share of
web traffic. Retailers looking at their log files will see the traffic
coming from "Google AdSense", not from MySpace.

In this relationship, Google is the only one that walks away with
the long term assets of advertiser base and deep expertise in
monetizing traffic.

Google makes ~5x more money (bottom line) on each ad impression on a Google-owned page than it does on a 3rd party AdSense page. If the company wants to continue growing the way it has so far, they won’t be doing it via deals like MySpace on which their margin is negotiated down to barely nothing. They will do this by building and acquiring their own media, which is 5x more valuable to them.

Deals like the MySpace-Google deal are pretty much a trojan horse for Google to build its direct advertiser relationships and monetization expertise on the shoulders of others. The real money will be made on the content that Google owns/will own. It’s a loss-leader game.

Every time Google signs a mega-deal for powering a 3rd party media company, its almost guaranteed that they will shortly after get into that business themselves and become the biggest competitor around (with all the ad relationships). If they don’t balance Google-owned media with 3rd-party ad syndication, they risk significantly diluting their overall profit margins because of that 5x factor. And that doesn’t seem like something they’re intent on doing.

IMHO – The best use of the Google money going into MySpace, AOL, Ask.com, etc is to build or acquire their own in-house ad capabilities and eventually phase out Google. Otherwise they are bound to lose the battle both on the ad front, as well as the content front.

I wrote a couple of related posts on this here and here, and probably a few other places I can’t remember.

Full disclosure + a small plug: I am co-founder of Quigo. We offer media companies a solution comparable to AdSense, except that it is a private label. And we don’t compete with our publishers on media. So feel free to consider all of the above to be ‘interest driven objective commentary’… 😉

Share this post!

CNN Money: “Quigo: The next Google?”

Yaron GalaiLeave a comment

Hmmm – I’ll subscribe to the title of this article by Paul R. La Monica on CNN Money this morning!… 😉

From the article:

…To that end, Quigo is not trying to be an online media company competing with "old" media firms for traffic and ad dollars. Quigo isn’t billing itself as a site where people can go to check e-mail, read news, look at job listings or watch videos.

"Quigo is benefiting from a perception of independence. There is general angst about the power that Google and Yahoo have and Quigo is able to sell against that. They have quietly replaced Google and Yahoo in a lot of newspapers for that reason," Sterling said.

Perfectly said. As I said here over and over – large Media Co’s should be extremely cautious about outsourcing+blackboxing their most vital asset (=advertisers) to their biggest competitors (=Google, Yahoo and MSN).

Full article available here.

Share this post!