Marketing Pilgrim Published: “Does Demand Media’s Successful IPO Validate Content Farms?” plus 3 more |  |
- Does Demand Media’s Successful IPO Validate Content Farms?
- Twitter’s Search for Search Talent Finds Bing’s Principal Scientist
- Yahoo Reports Surprising Rise in Display Dollars
- Facebook Encourages You to Buy with Friends
| Does Demand Media’s Successful IPO Validate Content Farms? Posted: 27 Jan 2011 06:30 AM PST
What is most intriguing, though, is the timing of the IPO relative to Google's announcement that it is going to be cracking down on the types of content that these farms generate en masse on a daily basis. I have affectionately referred to it as craptent in the past. Harsh? Yes, but if you read some of what is produced on these 'farms' you can see that the classification is on point. (Please note that I know that everything I write doesn’t smell like roses either It was just last week that Matt Cutts went public with Google's recognition that their search results can be a bit spammy at times. If Matt has been green-lighted to address the issue in public then you know that Google is at least giving it real consideration as a problem. This recognition comes only after years of cries for them to clean up the SERP's so people searching could get real results and those producing higher quality content would have a shot at the top positions. All of this being said, Demand Media managed to raise $151 million in its IPO (it was aiming for $138 million) on a valuation of just under $1.5 billion which is higher than the New York Times. Talk about all the news that is fit to mass produce! As Peter Kafka of All Things Digital noted there have been more than a few questions around Demand as well.
Another element in all of this is Goldman Sachs who was the lead underwriter for the IPO. I suspect that there is nothing more to be said about this aspect considering the high moral character of that shop (Got any Facebook investments stateside?). But you cannot deny the success of the company from a business standpoint. They have people interested in investing in them. Are these people completely aware of all the threats to the business model of Demand Media? I would have to say yes but back in the late 1990's we also suspected that people thought outlandish valuations for companies with no revenue was a good thing as well. Not to mention business folks penchant for thinking bad home loans were a great way to fuel growth. Based on history, it looks like we have a real winner here! In the end, this IPO and its success don't make much sense. I guess I was hoping for these mass content producers to not get the financial support to move this technique further along. But with business being more about making money than making things better (or even making sense at all) this shouldn't be a surprise to anyone. One day’s 'validation' of this concept could simply be a speculative move rather than one based on long term success of the content farm model. On the other hand, if Google can't figure out how to determine real quality in content this argument could be for naught. If that's the case then there may be a lot of changes in the online landscape, not the least of which is a real erosion in trust in Google's ability to deliver the best results at any given moment (meaning more than just from industry types but from the actual search engine using public). Now that would be news. How do you feel about content farms? Are they a boon to online business or a boondoggle for the Internet as a whole? Let us know in the comments today.
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| Twitter’s Search for Search Talent Finds Bing’s Principal Scientist Posted: 27 Jan 2011 05:36 AM PST
So Twitter has made the step of taking one of the top talents of Microsoft's Bing
This is rather large step for Twitter since it is trying to roll out it's self serve ad program for real now. Imagine the ability to search effectively on the Twitter site for information that is more than a few days old. What if you could run ads next to those search results? Gee, I wonder if anyone else has tried that one ………..? Some good news about this hire comes in the knowledge that Kolcz is big on fighting spam. Hooray!
This is Twitter's eighth hire (out of 362 total employees) from Microsoft which doesn't represent an exodus by any means but the level of this hire appears to be a win for the 140 character at a time set. Maybe the people that are leaving Microsoft are interested in actually doing something on the Internet rather than trying to chase a rival through $100 million ad campaigns? Your thoughts?
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| Yahoo Reports Surprising Rise in Display Dollars Posted: 26 Jan 2011 09:12 PM PST
Unfortunately, the spike did nothing to help the 600 people that got pink slips in December. It’s also too little, too late for the additional 1% which are expected to be let go in the coming months. The trouble lies in the fact that even though display rose, search ad revenues dropped 18%. Overall, the company was down 4% in total revenue over last year and that’s enough to hurt. Yahoo! is blaming the drop on outside forces. Says ClickZ,
It would be nice if this rise in display dollars was a sign of continued growth in the online ad economy but is it likely? Is it likely for Yahoo!? Though the old school internet company is still number one in display advertising, they’ve got Google and Facebook bearing down on them in their rear view mirror. Chief Financial Officer Tim Morse told Reuters that he wasn’t concerned about Facebook.
When asked if there could be more layoffs in the future, Morse played it safe with a non-committal response.
That there is what you call, a definite maybe.
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| Facebook Encourages You to Buy with Friends Posted: 26 Jan 2011 02:04 PM PST
Deb Liu of Facebook Commerce Product Marketing announced the roll out of the new program at the Inside Social Apps InFocus 2011 Conference. Buy with Friends is an attempt to make social commerce more social and it could be both a boon and a bust, depending on which side of the dollar you’re on. The whole process is one of suggestive selling. Your roommate buys that tractor in Farmville, so you get a notice offering you the same tractor at 40% off. Facebook has now considerably upped the chances of you buying the virtual object and that’s not virtual money that is falling into their pocket. Early reports say that players will have the option of sending or not sending notifications. Liu remarked that in testing, "more than 50 percent of users elected to share a purchase." But being on the sharing end isn’t annoying. The trouble comes on the receiving end when you’re bombarded with notices asking you to buy, buy, buy. In order to facilitate the shopping push, Facebook is working on a feature that will allow you to purchase more credits without leaving the game. This feature, which has been used by poker sites for ages, should lead to higher revenues as it encourages impulse buying. In addition to the annoyance factor, there’s also the issue of games that don’t use Facebook credits as their base form of currency. As All Things Digital pointed out, having to exchange real money for in-game cash, which has to then be turned into Facebook credits is too cumbersome. For social commerce to truly take off, the majority of developers need to use the same type of currency and that’s exactly what Facebook is counting on. What do you think of the new Buy with Friends program? Is it a nice feature that will encourage the growth of the virtual goods market, or a blatant marketing push that players will ignore rather than annoy their friends? Pilgrim’s Partners: SponsoredReviews.com – Bloggers earn cash, Advertisers build buzz!
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