Yahoo Needs Mark Cuban

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Most of the commentary about Yahoo’s short term troubles has focused far too much on Yahoo’s short term troubles.

Danny Sullivan offered a little more insight today suggesting correctly that Yahoo has got a lot more going for it than most, including the market at large, seem to suggest. Yet Danny may still be barking up the wrong tree to suggest that modest changes and a better Google deal will resurrect Yahoo’s market prospects. That might have worked some time ago, but I think a much better plan is very simple: Hire Mark Cuban and Donny Deutsch as morale building maniacs and cutthroat competitors. These guys are flamboyant and will put the big buzz and the fear back into the correct side of this equation: the underperforming part.

Yahoo is still a fantastic *company*, but I think the morale and innovation is so low at all levels that the best approach is major shakeup (rather than just talking about a major shakeup) . This would include large success incentives for old and new blood, and probably include a pretty sharp axe for the heads of those who are not enthusiastic about powerfully resurrecting the prospects of what is still a great company.

Given the mass exodus of executives right now it should be crystal clear to everyone that there is a leadership crisis at Yahoo. Jerry Yang is a brilliant guy and appears to retain a lot of loyalty even as people abandon the ship. Yet for reasons that nobody seems to understand he clearly has been unable to rally the troops to the degree needed at Yahoo. Part of the problem – I’m beginning to think a huge part – is the failure of the troops. Although most critics focus almost entirely on Yahoo’s top level management, I think one of the problem dynamics that came about as Yahoo grew was that despite a core group of dedicated engineers a large number of workers and middle managers simply put in their time, lived lavishly in the gravy days, and watched as their options lost value while Google and successful startup employees became rich. Very rich. It is more than a little demoralizing knowing that thousands of people no brighter or more capable than you are sitting on millions in GOOG value while your YHOO stock and options are decreasing in value.

I remember first seeing this “morale differential” between Yahoo and Google in person at a search conference in Las Vegas in 2005. Where the Google engineers and staff were almost giddy with excitement the Yahoo folks were often uninspired, and I remember clearly how one of the higher level managers was a lot more interested in the parties than evangelizing on behalf of Yahoo’s budding publisher network. There were some really clear exceptions to this such as the incomparable Jeremy Zawodny who gave a brilliant presentation about his extensive blogging experiences as Yahoo’s informal and unofficial blogger laureate. Until his departure last week Jeremy has been one of the reasons to think Yahoo could turn around. Although I’m happy to see the management folks leave I worry that Yahoo’s engineering teams remain a key asset as Yahoo’s traffic is still close to the world’s largest online footprint depending on what metric you use to count people and pageviews.

So Yahoo the answer is simple: Mark Cuban and Donny Deutsch, morale building maniacs. You may have blown the chance to let Microsoft bail you out of the troubles though Carl “I’ll be back” Icahn will certainly come back into the picture as he should. Oh, and he will put in Mark Cuban.

Discloure: long on YHOO

Social Learning 2.0

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Here is a great website about the intersection of education and the internet. One of the concerns of the main author is that educational institutions are ill-prepared to cope with the hurricane of new media information as well as potential new online approaches to teaching.

This is a really fascinating topic partly because for hundreds thousands of years formal education has languished under the province of a priestly class of educators operating pretty much in the same fashion since the Greeks introduced the professor to student lecture model of teaching.   Although it’s not a *bad* model, I’d strongly suggest we could do a lot better, especially given the plethora of new online tools readily on hand at no cost to almost everybody.

Where an old, legacy class about global markets would dredge up boring examples from dated textbooks, a new class could use real time stock information such as the Archipelago bidding environment, currency quotes, breaking news, and so much more.   In science students should be actively participating in blogs specializing in topics like Global Warming, artificial intelligence, and biology as well as interacting with other students around the globe.

A professor friend of mine who taught an online accounting class said there were challenges with the lack of personal contact, but benefits from student interaction and the fact he could answer the same predictable questions with an FAQ rather than having to deal with them over and over, basically freeing up more time for individualized instruction on the complicated topics.

As with so many online topics education is evolving rapidly within the rapidly evolving overall environment, so it is very hard to predict where things will wind up.   However I think it’s easy to say there is a lot of potential for improvements on the current outmoded lecture models, and the internet kitchen is cooking up new solutions every day.

Links and SEO

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From a search ranking perspective links are one of a website’s top concerns- probably the most important concern as linking often trumps content in terms of where a site will place for search queries.

As always, a great source for SEO information is Matt Cutts blog over at Google where a careful read of his SEO posts will bring you a lot of enlightenment about Google do’s and don’ts. His post of a few days ago was particularly interesting as it deals with Google’s crackdown on paid links that try to pass pagerank. This is one of the most contentious topics in SEO and an area where I wish Google would be more transparent since there are so many linking approaches that are not paid but may be questionable in the eyes of Google. The fact that they depend so much on reporting of paid links is also a problem as it allows aggressive SEOs to “game the system” by selectively reporting competitors while creating complex and undetectable linking for their own sites.

However my biggest concern about linking is not something Google can fix, and that is the fact that even in the world of what Google views as legitimate, authority passing links, strategic linking to “friend and associate” websites has largely replaced the early approaches to linking where people work to simply link to a great resource for the reader.   As blogging has exploded into prominence and linking importance this problem has become critical, and we now see that early and well established blogs will outrank far better resources that have few incoming links because they are new.   Ideally, the older resources would be better stewards and link out to the good new resources but generally the stakes have become too high as links are now correctly seen as more valuable than advertising and bloggers have become too reluctant to link to other resources unless there is some reciprocal benefit.

Media Bloggers Association – Who ARE those guys?

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As a blogger of important, exciting, and provocative *breaking, real time tech news* as well as broken and static personal rants, as well as (formerly) AP material with my own brand of questionable commentary, I’m really interested in the firestorm of controversy surrounding AP’s odd decision to crack down on a single, relatively obscure blog Drudgeretort.com ( not to be confused with the the much larger Drudge Report.). Their crime? Users had posted small parts of AP stories without permission or using AP’s new online payment system at 12.50 for five words.

Major blogs jumped to action, calling for an AP Boycott, while another heretofore obscure group calling itself the “Media Bloggers Association” has agreed to meet with AP.   Based on some of the coverage I assumed this group had considerable standing in the blog community, and I was just ignorant about their existence.   I’m still checking, but based on their own website information it’s not clear to me exactly what role the MBA plays with respect to the media, let alone blogging.

I’ll reserve judgement on them until I know more, but I do object to the idea that “news bloggers” like me are going to be represented by a group I don’t even know about.   Rather than the “corporate meeting” format  maybe the AP should meet with … everybody via an online environment where we can get widespread participation across the board, especially from … bloggers.

Philadelphia Wireless Resurrection and the Philly Cheesesteak Connection

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The largest city wireless project in the USA (and the world?) is in Philly, and was just revived by an investment consortium after being nearly abandoned by Earthlink due to poor signal quality and only 6000 subscriber signups (despite the zero cost where profits will come from advertising).    Google’s Mountain View project never took off the way people thought it might.  

Attribution for story idea goes to Reuters.   Hey, wait, I don’t have to give attribution for a story *idea*, but I’m trying to provide extra attribution in line with my concerns that the AP boycott is distracting bloggers from their responsibility to stop doing so much leeching of stories from AP, Reuters, and other mainstream legacy media outlets not to mention other bloggers. 

So, I’m linking AGAIN to Reuters and AGAIN!  BAM!     BAM!   
HA!    AP – NO LINKS FOR YOU! 

My gut take on citywide WIFI is that a good quality signal with good bandwidth is the key, along with a *single* really good advertising salesperson who is also an internet evangelist.   Once local businesses wake up to how much most of them are missing the boat on the internet marketing (preferrring to squander too much on yellow page and other print ads), city WIFI ads should practically sell themselves. 

 People don’t mind advertising all that much – look for example at pretty much all internet, all broadcast TV, and much of Cable TV right now.    PBS doesn’t have advertising?   Nonsense!   Those interminable and lame pledge breaks and increasingly aggressive “not advertising” sponsor bits are the equivalent of advertising to anybody but the most nitpicking PBS volunteer.     Not to mention that the specials shown during the pledge sessions are often specifically designed to get more pledges. 

Citywide WIFI?   Free.   Advertising Philly Cheesesteaks on Philadelphia’s Citywide WIFI?    Priceless.

 

 

 

AP News Boycott is the News

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There is a huge story brewing that covers the intersection of mainstream news and blogging. Associated Press (AP) decided to crack down on what they felt were copyright violations by blogs quoting AP stories. Spoof site “The Drudge Retort” is under legal fire from AP, and this has prompted action by other blogs that coudld become one of the most interesting developments in the history of blogging and news. AP has backed off somewhat from its initial reaction and is now offering guidelines for blogs using their stories, but this is too little too late in the eyes of many prominent bloggers.

The world’s top tech blog, TechCrunch, has called for support of the boycott of AP stories – telling bloggers to stop linking to AP stories until they change the new policy and stop threatening to sue blogs.

Here’s a somewhat different perspective from Jeff Jarvis who probably did more to get the ball rolling on this than anybody.   His concerns seem to be more that AP is hypocritical and opportunistic about copyright and linking.  I do like Jeff’s idea that the key metric for compliance with good practices in blogging and journalism should be a *link* to the original material along with reasonable other attribution.

Although the story is interesting from the perspective of the changing interpretations of fair use and copyright legalities, this also represents what I think is the first large scale test of the influence of blogging on mainstream news outlets. If the boycott catches on the effect on AP will be very interesting to watch, and probably costly enough for AP in terms of stunting traffic and incoming links that they will revise the policy very quickly. The big winner here will probably be Reuters which will see a huge swell in links from high authority blogs. This has the potential to have a very positive long term affect for Reuters, especially with respect to Google rankings for very valuable technology news terms but also for the Reuters site in general.

It will also be interesting to watch how AP covers the story of its own decisions. I need to read up more before forming an opinion on this but I’m guessing AP’s guidelines are not all that excessive or unreasonable, rather AP is just missing the point that the benefits to AP from new media news and blogs far outweigh the challenges they will face from copyright violations.

As usual the blogging community is quick to attack attackers without giving enough thought to their reasonable concerns about flagrant copyright violations with no attribution to original authors or sources. It would be nice if in conjunction with the AP story boycott bloggers would work *twice as hard* to give MORE attribution to original sources. I’ve found myself in disagreement about this with other blogs but I continue to think the solution is to make it standard form to provide a link to original material you reference in your blog. This was standard practice in the early days, but as links became the key currency of the web people stopped using them as much, and started using them more strategically.

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The huge wait over approval for the Sirius XM Satellite radio merger is almost over as FCC staff has recommended approval of this action making approval very likely.

In my view the merger will have a positive effect on the profitability of the combined companies because it will effectively increase the reach of the advertising offerings dramatically while eliminating upper and some mid-level management positions.   Unlike small terrestrial stations (which are quickly falling under national networks anyway), satellite radio is very capital intensive but relatively labor NONintensive.  e.g once established the satellite network can scale to millions more subscribers without a lot of extra labor or infrastructure costs.    The XM Sirius merger is the logical extension of those technological and labor efficiencies in a market where technology forces are a lot more determinative than normal market forces.

To the extent the merger helps the combined company by increasing their share of the radio advertising market it is likely to have some negative impact on terrestrial radio stations, though I think most of this damage has already been done.  Also, I see the key negative pressure on radio advertising as coming from the growth in online advertising and the merger is unlikely to have much affect on the online advertising market.

Following are notes from the XM / Sirius press release describing the advantages of this merger.

PR info is in italics, [my comments are bolded and bracketed]:

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts’ consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry [skeptical – this is a profit move not an innovative one] and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices — The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings. [theoretically reasonable statements, though I’m skeptical they’ll work hard to innovate, choosing instead to reap the increased profits from the merger efficiencies]

* Accelerated Technological Innovation — The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment. [Again in theory true, but the radios are already subsidized so I see prices stable or higher after merger.  Innovation will happen as necessary to maintain market]

* Benefits to OEM and Retail Partners — The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively. [Auto space – lots of potential as drivers expect more amenities and are willing to pay for them and these partnerships are a very natural win-win for autos and XM Radio.   Retail – skeptical of more than current levels of subscriber increases via this market.]

* Enhanced Financial Performance — This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion. [Absolutely yes, though my gut doubts the 7 billion number without having done any financial research.  If this 7 billion efficiency is realistic this appears to be a good stock buy as it could catapult the bottom line of the combined companies, which now have a combined market cap of only about 7 billion]

* More Competitive Audio Entertainment Provider — The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers’ attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free “over-the-air” AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies. [Maybe, but I think for at least the first few years the focus will be on more efficient delivery of the existing niche networking, news, shock and political talk shows, and other existing products.   I do not see XM and Sirius as major content innovators.   Rather they have been innovative in the distribution space.]

Summary:

Look for the merger to be approved, to bring cost efficiencies, and to breath life into the stock of the combined company.     Do not expect significant other impacts in the radio or other sectors.   Merger = more of the same, more cost-effectively delivered by the combined company.

WSJ Reports

Lomborg on Zakaria GPS: Painfully Correct Thinking

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More kudos to Zakaria’s GPS on CNN for bringing key global thinkers to the news table.

Today GPS featured Bjorn Lomborg, a figure who is controversial for the very simple reason that he has challenged sacred cows with common sense. When the sacred cow includes global warming alarmism even many otherwise clear thinking scientists have attacked Lomborg, generally on personal grounds rather than on the statistical high ground squarely occupied by Lomborg and the Copenhagen Consensus.

Bjorn Lomborg’s economically optimal approaches to finding solutions for global development, poverty reduction, global health, and more are thoughtful and rational. So rational and thoughtful that it’s always painful to hear his critics disparage him as a “global warming denier” (he is NOT even a GW skeptic as Zakaria very unfairly branded him during the introduction).

Lomborg’s main point is simple: We should seek the most effective solutions to global problems, which means seeking the most effective spending approaches given our current understanding of the problems.

I am very confident that history will show that the approaches taken by the Copenhagen Consensus were a sort of early “best practices” for Global problem solving, one of the first efforts to powerfully integrate science and economics in a rational rather than political or emotional way towards the vision of a better world.