Yeah… so about that.

I was wrong.

I was wrong about the idea of wide adoption of online advertising as a primary revenue source for the long tail. I was wrong about content not being a commodity. I was wrong to think that successful online startups could have successful advertising models. I was just wrong.

As recently as this week, AOL laid off it’s “freelance writer” staff as part of the recent Huffington Post acquisition and subsequent roll-up of AOL properties.

All you people thinking you can make money online using the standard advertising/content model… well, think again. You’re not.

Advertising is a commodity. Commodities, by definition, are resources that flood the marketplace, diluting the individual value of each resource. Advertising online is dominated by “remnant” advertising, which is cheap commodity advertising that costs the buyer little to purchase in bulk (think Adsense) and results in little payout to the publisher. There’s very little real money in commodity advertising. The real players are getting paid on direct sales advertising targeting big sites with high payouts (Think Apple taking out prominent advertising space on the New York Times for tens of thousands of dollars).

Content is a commodity. There are millions of bloggers. Millions of publishers. Hell, just this week, I migrated a site to WP Engine that had 11k+ sports blogs. Content is a commodity and, by definition, not valuable.

But if you want to keep thinking it’s valuable, go for it. You keep writing blog posts and giving yourself some sense of value. While you’re at it, take a look at the sky and convince yourself it’s actually orange.

Content companies are not likely to generate enough value in today’s economy. Certainly not for any kind of acquisition or exit.

I was wrong. I’m man enough to admit it.

In today’s internet economy, the real value and, in my opinion, the only viable model for successful online business is in product. Products. Real, tangible products. An iPhone app. A digital goods marketplace. A software product. A social network, perhaps. Something that has measurable customer acquisition and a real exchange of monetary value. You know, like the good old days where I pay you for something that I can, with certainty, validate receipt. I give you $30, you give me a text editor application for my Mac. I pay you $15/mo, I get an online invoicing service. I pay $0.99 and get a car locator app for my phone.

Content commoditization strategy says, I do something for you, Mr. Advertiser (put some code on my site), and you may pay me something if anything productive (click, action, impression) comes from it and, oh yeah, there’s no real measurements or guarantees for said exchange. Keep churning out content and page views will pay me.

No. That’s not how it works anymore. Why do you think Netflix built their model on a pay-for-service concept instead of intro/outro/in-video advertising? Why do you think Amazon continues to diversify their product offering with no real advertisement and certainly no content? Need a server? You can have 10 for cheap. Need music? We’ve got that covered at a competitive rate and now you can play it from anywhere. Need toilet paper? We’re partnered with retailers across the country to provide any essential product you might need and you can even have it shipped free if you pay for this other service we call Prime…

See? It’s product… not content. Content is becoming significantly less valuable.

Time to pivot.

The feed at that time was hosted via FeedBurner with whom the network had an enterprise account with. As a member blog of b5media, and one of the folks that tested and pushed FeedBurner on the network, my blog was one of the first hosted under their CNAME policy. The CNAME policy allowed us to brand feeds with b5media (http://feeds.b5media.com as opposed to http://feeds.feedburner.com).

Obviously, I had some branding concerns to deal with and I contacted FeedBurner for a solution that would allow me to take control of my feed and retain the subscriber base I had established over a period of time.

FB: Simple. We can transfer it under your Feedburner account if you’d like
Me: Yeah, let’s do that.
FB: Oh wait, your feed is under the Feedburner Ad Network and so because of financial logistics involved with b5media owning that feed URI, we cannot transfer it. But, you can burn a new feed, delete the old and use 30 day redirection to send people to the new feed.
Me: Okay, that makes sense.

And off I went. I burned the new feed, deleted the old with redirection, and looked at numbers over the next few days. My feed subscribers had dropped to almost a third of what they were (down to about 400 subscribers).

By the time I realized that I had been nipped in the bud by the CNAME issue, it was too late and all those subscribers were gone with no way to communicate to them about re-subscription.

Over the past 3 months, I have rebuilt to around 850 – still a large distance from where I was, but slowly getting there. If you haven’t re-subscribed yet, please do so now.

Takeaways

Feeds are our bread and butter in blogging. Knowing that there are people subscribed to a blog, provides direct value to bloggers. It helps us understand the dissemination of our content and the reach of our audience. We value page-views, obviously, but feed subscriptions may be the most tangible metric of actual reach available.

When you find a blogger that you enjoy, vote with your feet (or clicking finger) and add their blog to Google Reader or one of the other many feed readers (most of which are free). We really do appreciate it. It makes us feel that the work we’re putting in is actually making a difference.

Other feeds that we provide:

• Aaron Brazell
• Venture Files (Entrepreneurship)
• Wicked Marketing (Web Marketing)
• SuitCase (Tech Policy)
• Contenido Español (Spanish)

Then there was Facebook, the walled garden social network that restricted access to college and high school students, and businesses who had a Facebook presence. In all these cases, the confirming matter was a legitimate email address issued by the legitimate university, high school or business.

Web 2.0 drastically changed the way we do “internet”. No longer do people expect to pay for these services, they simply don’t. AOL recognized this fact a few years ago when then CEO Jonathan Miller suggested to the board that AOL should drop its subscription model and open up. AOL decentralized and became an open platform, including their very popular AIM service. AIM, a formerly closed protocol, now is run via Open AIM, a service which has allowed the interoperability between Google Talk, Jabber, and .Me, to name a few.

Facebook opened up big time. They decided to let the world see what was behind the curtain and were wildly successful. Though Facebook is still a walled garden in some respect to data, the walls keep falling with Facebook apps and Facebook Connect, announced last week.

As a final example of a traditionally closed walled garden throwing all caution to the wind and embracing the open internet environment, I give you the New York Times. NYT excessively applies metadata to all of its content, opening up the door for others such as Blogrunner, a Techmeme competitor which is actually owned by NYT. More notably to the traditional media norm, the registration requirement (which is almost always free at online newspapers) to view articles was removed giving full access to NYT content.

No registration. No hoops. Profit.

The challenge, as Seth Godin is probably about to find out, is when a business model is built around paid access (or even free but registration required). I’ve toyed with the idea of premium content for RSS subscribers only here. Though I won’t promise not to try it again, I can say it did not work. There was no increase in subscribers. There was even better content and resources, yes. But it does not work.

That said… one of the things that the open content movement seems to be bringing to light is single sign in. Facebook Connect, for instance, allows users to gain access to dedicated non-Facebook resources, free of charge and without forcing yet another account.

This doesn’t solve business model. I think the Pay per Play model is flawed inherently and though some people are successfully making money on older models, I don’t think the honeymoon can last.

That’s just me, though. Curious to hear what you think the best method of monetizing premium content is.

See, I’ve been lucky enough to attend a lot of conferences and events and to interact with lots of people along the way. Most of the folks I interact with are early adopter kinds of folks that love jumping all over the newest and greatest social tools, etc. We all travel in the same circles so we always see the same people at conferences and while it’s great, it was really catching to interact with a group that doesn’t necessarily operate in those circles.

The WordCamp Dallas group was different than even WordCamp San Francisco where Om Malik has spoke two years in a row and where folks like Dave Winer, Mike Arrington, Matt Cutts and others have spoken or made some kind of appearance in the past. There were very few of the “internet rock star” types in Dallas, but the demographic that was there made it so much more rich and interesting.

Photo Credit: ronalfy

ContentCamp

It was different, but it was good. I discovered a really telling and exciting thread through the entire weekend as I observed a few this:

1. Going into the event, I was asked to make my session technical to meet a technical audience. There were some technical people in the audience, but I felt it important to adjust my presentation to be a bit less geeky.
2. The most well received sessions of the weekend dealt with copyright and licensing, developing a community around your blog and the business blogging panel.
3. The number of people was notable who simply talked about wanting to write more, and having better insight on writing in general

To me, the common denominator, and the highlighted theme for the entire weekend, was not WordPress. Despite the fact WordPress 2.5 was released and is being well received across the board (I was watching Twitter for about 3 hours after the announcement and saw nothing but good reports). Even though the premise of the event is All Things WordPress the most value seemed to surround content.

Guess what? Content is non-platformic. Easily, this event could have been a general blogging event. Easily, value could have been gained by Movable Type users and Typepad users; by those on Blogger or Textpattern or Drupal.

Why was it that I found myself silently annoyed by WordPress fanboism in much the same way that frustration with Applegasms – the reaction by Apple fanbois whenever the beloved Cupertino company announces something new – caused me to register applegasms.com?

I reckon my annoyance comes from my feeling that WordPress is a tool. It is a wonderfully awesome tool that I support, encourage and use. However, at the end of the day, it is a tool. My friend and colleague Mark Jaquith, who is also one of the core WordPress developers, has a philosophy that I love: get WordPress to the point where the user has no idea that WordPress even exists.

At the end of the day, it’s not about if you use WordPress or Typepad or any other blog platform. Sure, there are things to consider when choosing. However, at the end of the day, it’s about creating engaging content that creates community between author and readers. That’s the important part.

Photo Credit: zizzybaloobah

Frisco, Texas

Although the event is called WordCamp Dallas, it was technically held in Frisco, Texas about 30 minutes north of Dallas. Frisco is an amazing city. In the short few days that I was there, I felt like I was watching the beginnings of a brand new city that in five years would be the hub of activity for miles around.

The city was gracious enough to lend us their City Council chamber which is an amazing, state of the art facility in itself. The acoustics of the domed room were so vibrant that I would love to play my guitar in the center of the room.

The city supported us and went out of their way to help us on a number of fronts. So, thank you, Frisco.

Photo Credit: ronalfy

Best Panel EVAR

The best panel I’ve ever been on (and no offense to every other panelist I’ve shared the stage with), was the business and blogging panel. It was such an honor to share the stage with Mark Ghosh, Matt Mullenweg and Liz Strauss. I felt like I shouldn’t be up there. Thank you, folks. That panel was the highlight of my weekend.

In summary, the professionalism and agility that this unconference was delivered in was nothing short of amazing. The sponsors were all in. The organizers were quite adept. The WordPress.com folks came in to support and WordPress 2.5 was launched in the heart of Texas. I had a blast.

Disculpas a mis lectores hispanoparlantes por el contenido en inglés que se ha estado colando dentro del feed. Lo tenía funcionando correctamente pero en algún momento los filtros dejaron de separar este contenido del feed en español. Tengan la certeza que estoy trabajando lo más rápido posible para corregirlo. Es posible que uno que otro artículo en inglés se cuele dentro del feed en español mientras averiguo por qué los filtros no están funcionando. Gracias por su paciencia.

Recientement, Steve Rubel (Micro Persuasion: The Digital Curator in Your Future) y Valeria Maltoni (Conversation Agent: Do We Need Editors in New Media) han retomado un tema que toqué en el 2006 (RED66: Where are the Editors?): la necesidad de editores o curadores de contenido que funcionen como un filtro que regule la cantidad y calidad del contenido que consumimos.

Actualmente podemos crear Agentes de Búsqueda (e.g., Google Alerts) para estar al tanto de cualquier información relacionada a un tema de nuestro interés. El problema está en que estos agentes no tienen todavía la capacidad de decidir cual contenido vale la pena y cual debe ir a la basura. Hace falta un agente de búsqueda con criterio suficiente para decidir cual contenido enviarnos. (una opción sería construir un Agente de Búsqueda que utilice información previamente curada, como por ejemplo la que está en Del.icio.us).

Yahoo!, Altavista, Google, entre otros, fueron los primeros agentes de búsqueda de internet, permitiéndonos encontrar información que de otro modo nunca hubieramos visto. Google aplicó su algoritmo de PageRank para entregarnos resultados más relevantes. Pero es tanta la información disponible en Internet que estos sistemas de búsqueda nos devuelven demasiada información, mucha de ella irrelevante o de poca importancia. PageRank no es necesariamente la mejor forma de categorizar información.

Servicios como Mahalo, StumpleUpon, Del.icio.us y hasta Digg nos permiten buscar información previamente filtrada y organizada por otros. Los usuarios de estos servicios actúan como curadores de la información, decidiendo qué vale la pena ver – de la misma forma que el curador de un museo decide cuales obras de arte exhibir (y al igual que en el museo, a veces nos preguntamos cómo un artículo en particular fue escogido para la colección).

Pero todavía prefiero servicios como Twitter, que me permiten escoger mis conexiones (mis fuentes de información) y aprender de sus recomendaciones. Siguiendo las conversaciones de mis contactos en Twitter consigo más contactos y aprendo quiénes ofrecen contenido relevante. Sin embargo, Twitter requiere mi atención constante (es lo que podríamos llamar un “torrente de distracción permanente”); me hace falta un agente de búsqueda que condense lo que llega a mi Twitter y me informe regularmente al respecto.

Y tu, ¿cómo consumes información? ¿Tienes alguna herramienta secreta que te permite estar al día? ¿O te estás ahogando en un mar de información banal? Cuéntanos tu experiencia usando el formulario de comentarios.

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As one commenter in my previous post noted, this is classic FUD. That theory rings really loudly in my ears and I’m inclined to go with that theory. Google slaps down a bunch of prominent people, lets the buzz take over and hope that the warning shot would be taken seriously by the rest of the blogosphere. Well, Google can kiss my derriére.

I’m not inclined to change the way I do things, nor am I inclined to recommend anyone else change what they do, how they do it or try to avoid Google PageRank penalties in the future. In the case of my blog, I have not broken any rules nor have I pimped my blog in some way to artificially manipulate SERPs or PageRanking. In fact, what I’ve done is no different that the bulk of other legitimate blogs.

Let me summarize what Google exists for, from the perspective of a blogger, content producer and user.

Google Exists to Produce Relevant Search Results

Google is first and foremost a search engine. Sure it has lots of other tools and apps that they offer, but their bread and butter is search and to that end, they want to produce relevant search results to users. They want to produce relevancy and authority. You’re more likely to get gadget recommendations from Engadget, for instance, than our own The Gadget Blog. It’s the truth. Engadget is just the authority followed by Gizmodo. Yes, they are competitors. That’s fine. They are the authorities. When I search for a gadget that our blog and Engadget has written about, I expect, as a user, that the Engadget listing would rank higher. Google wants to produce relevant, authoritative content.

Google has an Advertising Business

Google Adsense is Google’s advertising arm and will run on any site regardless of PageRank. On the flip side, commodity advertising companies rely heavily on PageRank. What you have here is a burgeoning case of Conflict of Interest in the case of Google.

Google does not like to have its SERPs artificially manipulated

The beauty of the Google algorithm is that no one really knows all the details. I’d doubt even the founders or CEO have the full picture. This is a deep, dark secret held as closely as the Coca-cola formula. Going a step farther, Google’s algorithm changes as time goes on and as the volume of indexable content grows and challenges with spam and search engine gaming grow. Google likes to have the final word on what is authoritative and relevant. So they do things like lay a smackdown on people selling text links in exchange for PageRank juice. Purchased influence is not something Google likes to deal with.

Now having said all that – what I expect of Google and what I think Google expects of itself – let me tell you exactly what Google has told the world about itself.

“PageRank is Irrelevant”

In the early days of PageRank, it was about casting relevancy of sites. The higher the PageRank, the more authoritative a site was. Now PageRank is less important as only advertisers really care about it. It’s more important to rank well for keywords and phrases – why? Because of Adsense. I’ll get to that later, though.

What Google has shown with their zealous adjustments on PageRank is that content really is not all that important. What is offered to the world is really not that relevant. What is relevant is playing by Google’s dictates. When they say jump, if you jump, you’ll rank high in PageRank. Realistically, PageRank is about the only leverage Google has to influence relevance and by penalizing those that are highly relevant arbitrarily, they have devalued the perception of PageRank beyond its already low perception.

“We Don’t Want You to Advertise Unless You Use Adsense”

The people who have been penalized in this and the last update are people who are monetizing their blogs. The people who are selling text links – okay, slap a nofollow tag on those links and prevent manipulation. Those penalized yesterday – well, I don’t think any were selling text links, but we are running advertising. And we’re not running Adsense. Under the assumption (faulty as it is) that advertisers only want to run ads on sites that have higher PageRank, and Google Adsense does not rely on PageRank, Google has throttled anyone making significant income on non-Adsense advertising. They are trying to dictate how we monetize.

“Content is Not King. Playing by Our Rules is King.”

I stated yesterday and I’ll state it again today: Those who were penalized yesterday should not be the ones who are demoted but PROmoted. If Google’s endgame is to produce relevant and authoritative listings (see point #1 above), then they should be trying to figure out how to promote our content more. They should be asking us to be listed in Google News. They should be pre-populating our feeds in Google Reader. They should be striking up dialogue with us about how to address their concerns while protecting ours. It’s our content, Google.

Now I still cannot speak publicly for b5media, though my inclination is that the corporate position will be roughly in line with my position, I do not plan to change how I run my site. PageRank 3. So what? Google can kiss my derriére. You as the readers discover this site through search results (which to be clear are not necessarily affected by PageRank, so let’s keep that argument separate), through social media promotion via Twitter, Facebook and reading other blogs, and through networking. As noted in the comments on SEOMoz’ White Board Friday a few weeks ago, this blog is an influencer blog – it doesn’t have the volume of traffic of, say, Scoble but the key people who need to read this blog, read it. They don’t care about PageRank. You don’t care about PageRank. Why should I care about PageRank.

I still have people approach me at conferences asking me “Hey, aren’t you the guy from Technosailor?” I still am in the Technorati 5000 (was Technorati 2000 but I don’t try anymore since T’rati is pretty much irrelevant too). I still have people who look forward to meeting me whenever I’m going somewhere. I still have people who LOVE the chance to write here (there’s original Spanish Language content coming as soon as I can secure the writer!). This blog is successful on its own without Google. It’s a shame Google won’t play the game with us, but if they want to be on their own island, let them be.

For bloggers who are not sure what to make of this whole thing, I’d say ignore it. Don’t worry about PageRank. Don’t worry about whether or not you should include a blogroll on your site. My advice about avoiding blogrolls centers on value for everyone when you link to your favorite blogs in the context of your content instead of a semi-static blogroll no one may ever look at. It has nothing to do with whether Google might or might not penalize you for having a blogroll. For bloggers in networks, I’d say forget about Google’s pagerank. Don’t install the toolbar. Don’t torture yourself. Like Alexa ratings, the numbers are completely bunk and are not in your control anyway. Just ignore it. Produce great content, and people will find you. Trust me, they always do. People want good content, not PageRank. Write for your readers or yourself. Google can kiss your derriére.