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Further fueling the ongoing debate over the future of the news media and independent journalism, eBay founder and billionaire Pierre Omidyar last month committed $250 million to a news site co-founded by journalist and author Glenn Greenwald. Omidyar’s investment followed the announcement over the summer that Amazon founder and CEO Jeff Bezos had purchased The Washington Post, also a $250 million investment. The late Steve Jobs’s wife, Lauren Powell, and 29-year-old Facebook co-founder Chris Hughes are also pouring money into old and new media ventures.

Could this new band of news media owners shape a technology-led business model that will be profitable and protect the integrity of impartial, ideology-free journalism? Ultimately, according to Wharton experts, the ball will rest with the consumer.

Any new business model that those in the technology world would bring to the media realm would have to address the major pain points currently facing the industry. News organizations have “suffered a lot financially in the past couple of years,” says Wharton marketing professor Pinar Yildirim. Circulation numbers and advertising revenue have shrunk as both readers and companies turned their focus to the Internet. The industry has tried to adjust to the new normal — some newspapers and magazines have cut back on issues or the number of days they produce a print product. Other news organizations have started charging for online access. Still more have tried to add content that mimics what tends to be most popular on the web, especially entertainment-related coverage, Yildirim notes.

Omidyar has indicated that he was motivated more by a desire to protect independent journalism than the prospect of getting a return on his investment, at least for now. In a blog post published on his website last month, Omidyar wrote that his investment in Greenwald’s venture (tentatively called “NewCo.”) stems from his “interest in journalism for some time now.” In 2010, Omidyar founded Honolulu Civil Beat, a news website with a stated focus on “investigative and watchdog journalism.” Earlier this summer, he explored buying The Washington Post newspaper before Bezos became the winning bidder. Around that time, Omidyar said he began thinking about the social impact he could help create with an investment in “something entirely new, built from the ground up.”

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Adrianne Jeffries

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Businessweek has a thoughtful and well-written defense of Bitcoin, the open source virtual currency that approximates cash on the internet. Writer and programmer Paul Ford points out that the Bitcoin experiment, so far, is working: it's actually being exchanged as money, and the underlying technology has proved "to be impeccable and completely functional." He makes a persuasive point that Bitcoin is "no more arbitrary than derivatives or credit default swaps." At the time of this writing, a single Bitcoin is being traded for $91.67 USD (although The Economist, at least, expects the bubble will pop soon).

Unfortunately, Ford also repeats the unsubstantiated claim that Bitcoin's meteoric price rise was sparked by fears over the Cyprus...

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Bitcoins (Casascius)

Bitcoin, a virtual currency "mined" from computer transactions, could one day challenge the hegemony of nation-issued money and create a truly viable decentralized, anonymous currency. Along the way, though, supporters must deal with the challenges of building a new exchange system — and the inevitable winners and losers that creates.

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In Search of Continuous Growth : Lara Lee at TEDxOrangeCoast

Named a "Master of Innovation" by BusinessWeek, Lara has been a Fortune 500 executive, corporate intrapraneur and advisor to senior leaders from startups to the C-suite. Curious, adventurous, and impatient with the status quo, Lara has spent much of her career finding ways to make an impact by understanding people, building bridges across cultures, and instigating growth and positive change in individuals and organizations. For over 20 years she's combined techniques from cultural studies, design, and business strategy to take brands into new markets, capitalize on untapped opportunities and create experiences worth sharing -- always beginning with a focus on deeply understanding people. At Harley-Davidson, she built an $80 million division that monetized brand-building experiences, incubated new businesses and attracted diverse audiences. At Continuum, Lara applies her extensive corporate and consulting experience to counsel teams helping clients such as American Express, Holiday Inn and Procter & Gamble innovate and grow. AboutTEDx. TEDx was created in the spirit of TED's mission, "ideas worth spreading." The program is designed to give communities, organizations and individuals the opportunity to stimulate dialogue through TED-like experiences at the local level. At TEDx events, a screening of TEDTalks videos -- or a combination of live presenters and TEDTalks videos -- sparks deep conversation and connections. TEDx events are fully planned and coordinated <b>...</b>
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There’s a reason why Elon Musk is being called the next Steve Jobs. Like Jobs he’s a visionary, a super successful serial entrepreneur having made his initial fortune with a company he sold to Compaq before starting Paypal. Like Jobs, he saved his beloved baby Tesla Motors from the brink of oblivion. Like Jobs, he’s a genius generalist with “huge steel balls” (according to his ex-wife) and a knack for paradigm-shifting industry disruption. Which means he’s also hard to work with. “Like Jobs, Elon does not tolerate C or D players,” SpaceX board member and early Tesla investor Steve Jurvetson told BusinessWeek.

But while Jobs was slinging multi-colored music players and touchable smartphones, Musk is building rocket ships and electric-powered supercars. It’s why his friends describe him as not just Steve Jobs but also John D. Rockefeller and Howard Hughes all wrapped in one. His friend Jon Favreau used Musk as the real-life inspiration for the big screen version of Tony Stark. Elon Musk is a badass.

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pacopico writes "Elon Musk has just come off a pretty amazing run. SpaceX docked with the ISS. Tesla has started selling its all-electric luxury sedan, and SolarCity just filed to go public. Bloomberg Businessweek spent a few days with Musk and got a look inside his insane factories in Silicon Valley and Los Angeles. It's like Willy Wonka time for geeks. Among the other proclamations in the story is Musk saying that he intends to die on Mars. 'Just not on impact.' Musk then goes on to describe a fifth mode of transportation he's calling the Hyperloop."


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ESSAY CONTAINS EXPLICIT CONTENT

EPF 2012 Finalist

 

Ayman Oghanna

Yesterday’s War, Today’s Iraq

play this essay

 

My father left Iraq in the 1970s. He would not have recognised it, by the time I had gotten there. It was 2009 and Iraq had nearly car-bombed, kidnapped and executed itself into oblivion.

‘Cultures that may seem as durable as stone’ wrote Anthony Shadid, ‘can break like glass, leaving all the things that held them together unattended.’
And Iraq was broken. It’s shattered pieces unattended by the humming of generators and of U.S. drones overhead. Trust lay only in your family, in your tribe, in your sect. If you were lucky enough to be part of a sectarian majority, it lay in your neighborhood – now purged of rival tribal threats, both real and perceived.

The myth of Iraq a proud country, had stopped in my father’s time. Asir al thahabi. The golden age. Before Saddam, before the eight-year-war with Iran, before Kuwait, before sanctions, the myth before the fall. Today’s Iraq is many fractured pieces. A simmering federation of Sunni, Kurd, nationalistic and pro-Iranian Shia, whose first civil war has ended, whose second seems just at the corner. It’s a nation of many nations, lots of little failed states underneath the veil of a much larger one.They are identities by no means new. They have been laying dormant since the fall of the Ottomans, created alongside the artificial state carved out by the victorious imperial powers.

The goal of my project is to confront the multiple identities in Iraq today and examine their relationship to the greater Iraqi state. I have been living and working in Iraq since 2009 searching for a glimpse of the country that my father had left behind. I can’t see it. Perhaps it had never existed in the first place. A necessary nostalgia for better days, during such consistently disappointing ones. I don’t know yet.

If it does exist, however, it is within these smaller communities. Each vying for a future in the new Iraq. The project I am trying to fund, is an attempt to build a cultural narrative of the new Iraq.

 

Bio

Ayman Oghanna, 26, is an independent photographer and journalist working in the Arab World. A British-Iraqi, born and raised in London, he now lives out of Istanbul. His photography, writing and multimedia stories have appeared in The New York Times, The New York Times Sunday Review, Businessweek, The Guardian, The Economist, Time and Vice Magazine. He is currently based between Istanbul and Iraq, where he continues to work on ‘Yesterday’s War, Today’s Iraq’ an on going project on life in the new Iraq.

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TEDxWallStreet - David S. Rose - The Evolution of Success

David S. Rose is an Inc. 500 CEO, serial entrepreneur and early stage investor who has founded or funded over 80 companies. He has been described by BusinessWeek as a "world conquering entrepreneur," by Crain's New York Business as "the father of angel investing in New York," and by Red Herring magazine as "patriarch of Silicon Alley." David is the founder and CEO of Gust, the international standard collaboration platform for startup financing used by over 35000 investors and 180000 startups in 92 countries. He is also Managing Director of Rose Tech Ventures; Founder and Chairman Emeritus of New York Angels; Chairman of private equity firm Egret Capital Partners; and Associate Founder and Track Chair for Finance and Entrepreneurship at Singularity University, the Google/NASA -sponsored post-graduate program in exponential technologies. He is participates as a board of director for companies such as Comixology, KoolSpan, and Pond5; and serves as an active investor in companies including BioScale, Mashery, Space Adventures, and LearnVest. David has a BA in Urban Affairs from Yale University, an MBA in Finance from Columbia Business School and a D. Eng. from Stevens Institute of Technology. He is an Associate Fellow of Pierson College at Yale University and a member of the Entrepreneurship Advisory Boards of Columbia Business School and Yale University. More information at www.TEDxWallStreet.com About TEDx, x = independently organized event In the spirit of ideas worth <b>...</b>
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Max Headroom

Editor’s note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo, he hosts a show on business and has published books on success.  Follow him @ashkan.

“I thought the analysis of content vs other video companies very convincing. But I’m curious: the content game hasn’t worked out so well for AOL and Yahoo. Audiences are fickle. Are you predicting a rosier future?” – reader comment in Is Tech a Zero-Sum Game?.

Infrastructure, Platforms & Content

Today, the Web’s infrastructure is built, and we’re filling the pipes with content — mainly free, ad-supported content.

It might seem like the real opportunities are in user-generated content and aggregation, but anyone who’s worked in those fields recognize their limitations: Simply put, marketers want to advertise alongside professional content. Tim Armstrong left Google (the mother of all aggregators) and joined AOL to remake it into the Time of the 21st century.  He didn’t double down on Bebo.

Content is marketing; Marketing as content

Content – video in particular – may be promotional or commercial, in either case it’s a means to an end.

Traditional Media Companies (TMCs) need to make their content commercial; new media producers are leveraging their content as promotional, sometimes giving it away to build value.

However, when it comes to making money directly from commercial content, the genie is out of the bottle, according to Seth Godin: “Who said you have a right to cash money from writing? Poets don’t get paid (often), but there’s no poetry shortage. The future is going to be filled with amateurs, and the truly talented and persistent will make a great living. But the days of journeyman writers who make a good living by the word — over.”

TL;DR

Content isn’t only increasingly free, it’s also short. Godin clarifies: “Shorter, though, doesn’t mean less responsibility, less insight or less power. It means less fluff and less hiding.”

With 60 hours of content uploaded every 60 seconds on YouTube, producers face three challenges:

-          25% of views come in the first 4 days;
-          Viewers only watch the first 30-60 seconds;
-          The average video generates 500 views throughout its lifetime.

It’s no longer enough to be a good storyteller; you have to cut through the clutter and make the numbers work.

The Economics of Content

“Network television costs $50,000 – 100,000 per minute to produce. Reality shows can be cheaper, with the lowest-end costing $6,000 – 8,000 per minute”, according to GRP venture capitalist (and occasional TechCrunch contributor) Mark Suster. New media producers leverage deflationary economics to produce shows for $500 – $1,000 per minute, on average.

My company does it for $100/minute. Once you cut costs down, the real challenge is revenue.

Fred Wilson’s piece on The Future of Media suggested that the right approach is to:

1 – Microchunk it - Reduce the content to its simplest form.
2 – Free it - Put it out there without walls around it or strings on it.
3 – Syndicate it – Let anyone take it and run with it.
4 – Monetize it - Put the monetization and tracking systems into the microchunk.

For example, 5Min borrowed a page from Google’s AdSense playbook, making it easy for publishers to syndicate the company’s video content, on its way to a $65 million exit to AOL.

“But content doesn’t scale!”

That’s the common critique of content companies from the tech industries. The truth is, bad content scales, good content doesn’t scale – the scale comes from distribution and monetization.  Demand Media’s “content farm” model scaled but it has since moved upstream to win over Madison Avenue, realizing that unless your clients are on Wall Street or Sand Hill Road, quality trumps quantity.

Profit is a Short-Term Move; Value is a Long-Term Focus

Content was an art. Today it’s a science as well. It will always be about Influence and Authority.

Bloomberg will lose $20 million on BusinessWeek, Washington Post sold Newsweek for $1 (plus the assumption of debt).  That doesn’t imply that there’s no money in content, it’s a reminder that disruptive innovation can come from new content creators who can be more disruptive to TMCs than any technology ever will. TechCrunch, for example, generated less revenue than BusinessWeek and Newsweek combined but sold for more.

Revenues come and go, after all. However, managers typically don’t care that much about long-term value creation because their compensation is tied to short-term profits.

Goodwill is the Driver of ROI

The best storytellers realize content is about Authority, Influence and building a brand. VCs who made their fortune on software and semiconductors can’t wrap their minds around content (“it’s a hits business”). But despite the 1% annualized return that VCs have generated, they will continue to invest in the latest mouse trap and shun content, despite what the experts say.

The Worst-Kept Secret in the Publishing Business

The Web doesn’t just shrink markets, it also kills sacred cows, in particular Warren Buffett’s argument that “the most important news in the newspaper are the ads”. Indeed, Google outsold U.S. newspapers $37.9 billion to $34 billion in 2011. I know, those are global Google revenues — give it a couple of years.

So yes, content may be king, but it’s the throne that retains the value, even if the throne was seized under dubious circumstances, according to an anonymous publisher: “Many of the big wins in digital content have gotten big by stealing other people’s content, and, once they get big enough, they build an original content layer (…) You can make money with quality content on digital. The challenge is it requires expertise in more than just content development.”

Of course, once you build your audience, you realize you don’t need to create content; licensing it is a more profitable short-term bet, but it creates less long-term value.  Similarly, ad networks have successfully intermediated between advertisers and publishers, but commoditized themselves in the process.

Why Content Has Stumbled

The TMCs actually get it: online remains small, and the faster they embrace it, they faster they die. The issue is how management has a short-term outlook to maximize profits, instead of being focused on long-term value creation.

The irony is that over time, technology plays come and go: One winner emerges from within a given category and largely kills off its competitors. The real threat to content creators may in fact be emerging content companies with no traditional business to defend. After all, journalism is stronger than ever while newspapers are dying.

But TMCs that have their own content catalogs, producers and brands may not see much value in emerging companies, which remain small until they become category killers, just adding to the tragic fate reserved for most.

While we live in a world of “good enough”, ultimately the company that can i) create the best content at ii) the lowest cost possible will create most value over time.

Disclaimers:

-          AOL is the owner of TechCrunch
-          I am not an employee of AOL
-          AOL acquired 5Min
-          My company WatchMojo has a distribution deal with AOL/5Min and YouTube.

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