Week of April 30, 2007

Microsoft In Talks To Buy Yahoo!

Friday, May 4, 2007

Microsoft has always lagged behind in the content business. For years the company has used profits from its core OS and Office applications business to build things like MSN and Office Live. While it has had some success in these areas, Microsoft has always lagged behind giants like Yahoo in online content and Google in online search. Now, word has it that Microsoft is looking at bidding on Yahoo! to the tune of $30 billion.

Such a move would change the online landscape significantly. Microsoft has recently launched Silverlight, an online application platform getting rave reviews, and the Yahoo! content combined with a bleeding edge web platform could revolutionize the way we use the Internet. Beyond the long view, the move would immediately provide Microsoft with the leading web content site on the web, and the ability to extend into major Yahoo!-owned online brands like Flickr and Yahoo! Groups.

Yahoo! To Fold Yahoo! Photos Into Flickr

Thursday, May 3, 2007

It's a story that you expect in the world of business, but this one was a long time coming: A company buys a successful competitor and folds them into their existing business. In this case, Yahoo! bought photo sharing site Flickr over a year ago, and ran it alongside Yahoo! Photos since. The move made some sense: Yahoo! Photos was the No. 1 photo sharing site on the Internet, and Flickr, although smaller, had a much stronger community and social networking functionality.

However, with a year gone by, Flickr is about as popular as Yahoo! Photos, and it clearly made little sense for Yahoo! Photos to continue when Flickr was growing dramatically. As a result, Yahoo! Photo members will be informed that the service is shutting down and users will be given the option of moving their photos to a number of other services.

Digg Online Community Rebels

Wednesday, May 2, 2007

Owners of community-based news sites were in shock this morning after Digg users launched a spectacular rebellion last night. Digg is a community news site, where users submit news stories and members vote them up or down, with the most popular stories hitting the front page. Recently, Digg received a cease-and-desist over the posting of the HD-DVD decryption key that was mistakenly posted on the Internet. Digg management removed all of the stories with the HD-DVD key and suspended users that continued to post it.

The resulting user rebellion brought Digg to its knees, as dozens of users banded together and made it impossible for any story other than HD-DVD key stories to hit the front page. This was combined by an overwhelming number of user comments slamming Digg for censoring the stories. Finally, Digg management relented, realizing that the community was in control.

This is a stark reminder to commercial sites looking to utilize community content: When the community controls the content, the community controls the site. Venture forth at your own risk.

Congress to intervene in radio royalty debate?

Tuesday, May 1, 2007

A bi-partisan effort is being made to introduce legislation into Congress to change the new online royalty rates issue by the US Copyright Board a few weeks ago. "The Internet Radio Equality Act" would replace the Copyright Board's rate structure with a flat 7.5% of annual revenues. This would bring online radio royalty rates in line with those paid by satellite radio broadcasters and jukebox owners.

A large group of online broadcasters and others will be on Capitol Hill on May 1st to issue a petition in support of this act. On the other side, SoundExchange, the royalty collection arm of the RIAA, is not happy at the thought of this being enacted. It remains to be seen if this possible legislation could be the basis for a compromise on the royalty issue, or if the rates, as currently drawn up, will force many online broadcasters off the air.

Arbitron Suspends Use Of eDiary

Monday, April 30, 2007

Technology doesn't solve everything. Arbitron today announced the suspension of its eDiary system after discovering return problems. Arbitron's testing phase showed no difference in listening levels or return rate with the eDiary. But once they went online with it, they found a serious shortfall in the return rate. In fact, they've sent letters to stations in 21 markets with the biggest impact.

This brings us back to discussions of the PPM. The PPM panels in each market are much smaller since each respondent keeps the PPM for months at a time, rather than a 1-week diary. Presumably, this should make it easier to reach the correct in-tab sample. But the issue is more fundamental than reaching quotas; it's about the quality and the random nature of the sample. Thus, the real question is what kind of person is willing to carry this device for 6 months at a time?