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Barbarians Past the Gate: Users in
Control Rock the SIIA Information Industry Summit |
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7 February 2006 |
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Success stories from content industry leaders flew through
the conference hall at the SIIA Information Industry Summit
almost as fast as the canapes flew off the sideboards, but
the most stunning success story didn't come packaged for
the venue. Jim Buckmaster , CEO of Craigslist, stunned the
hall of 400-plus content executives with a low-key account
of how his online classifieds service could do easily ten
times its current USD20 million annual revenues but prefers
to focus on servicing their customers properly within their
existing model. Profits are returning to publishing when
you find a formula that gets users to trust your integrity
and your quality. |
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We have met the future, and he
wears blue jeans and longish hair and cares a whole lot more
about his users than he does the content industry. What's more,
this barbarian that slouched in past the gate makes a ton of
money.
This year's SIIA Information Industry Summit was remarkable
and successful from any number of perspectives: a huge crowd of
top-quality executives from the content industry, high quality
presentations throughout and and people who had the answers to
many of the content industry's most pressing questions today.
We have details of most of the major events at the conference
in our Events Weblog if you care to read up in detail (index of
posts here). But by far and away the seminal moment of the
two-day event came when Jim Buckmaster, CEO of Craigslist, took the stage
for his interview by David Kirkpatrick of Fortune Magazine.
Here was one of
the most seasoned, polished media journalists in the world,
just back from the heady summit of global heavy hitters at Davos, trying to get a rise out of the leader of a company that
makes USD 20 million a year with an 18-person staff and could
make easily ten times that amount if it wanted to. But try as
he might, Kirkpatrick just couldn't get Jim Buckmaster to care
about anything but what worked for his users. Add a lot of
sales and marketing overhead? Not in the picture. Ecommerce to
take a bigger piece of the action? eBay's a part owner, but
Craigslist is not looking to get a piece of the transaction pie,
though they are
planning to charge for posting some NYC real estate listings..
What we have in Craigslist is a company that is content to
move slowly and carefully as a small business to satisfy a
growing marketplace. Imagine that - an online publisher that is
willing to stick to its knitting and put out trusted content
and services. On a relative scale this is the same story that
Google began to knit together a decade ago: develop a good idea
that works for an audience, stick with what works for them, and
see where it leads. Some such as Google take that germ of a
content business and blow it up to a full-blown media giant,
but the ranks of
LAMP-powered user-generated media producers are developing
a widening range of content services that grow from their
audience on out rather than from their marketing efforts on in.
As the giants of content swaggered around the Information
Industry Summit the ease with which this simple message played
out via Jim Buckmaster underscored some of the key themes that
they must address to respond to the challenge of user-generated
media. Here are a few of the key ones that come to my mind:
- Online publishing is swinging the base of the content
industry back to small to medium businesses. While
much of the media glare focuses on the largest players and
huge acquisitions in the content industry, the real success
stories beginning to emerge on the Web are the companies that
have found profitable and successful niches with very limited
help from venture capital firms or sponsorship from a major
portal. Some of these such as Craigslist do eventually find
major sponsors, but there is a broadening base of publishers
born on the Web or transplanted there that can make a pretty
good business out of content without having to worry too much
about exit plans. While this may not be much comfort in the
short run for print-based publishers trying to make the
transition to online publishing it's good news for the
industry as a whole.
- What's Web 2.0? Apparently not much to publishers.
Whether consciously or unconsciously there was almost no
mention of "Web
2.0" per se at this conference, in spite of its focus on
users in control. Most publishers are taking the tech trends
heralded by Web 2.0 in stride and recognizing that it's
all part of a greater trend towards focusing on users in
general as active participants in creating content value.
What Web 2.0 hype is mostly telling us is that there's a future
for independent publishing online after all if you listen to
your users and deliver high-quality content.
- Getting technology right is important, but it's not as
important as building trust with your users. The
relatively primitive layout of Craigslist is a reminder that
the benefits of affordable Web publishing tools aren't always
about pushing the envelope of content technologies with loads
of user features. Identifying a core need and filling it in a
way that people really like and trust takes just a smidgen of
carefully developed technology in many instances. There are a
lot of great new portals being developed these days with very
interesting features, but at the end of the day people aren't
looking for features as much as they are looking for a
service that they can trust for a specific purpose. It still
works for Google's single-box search home page, and it's
something that more publishers should consider when laying
out a new service.
The ranks of major media players certainly have not been
rendered moot by the Craigslists of the online content world,
but they have been challenged to rethink how to come up with
enormously valuable propositions for content services that can
match the inherent user appeal of a service such as Craigslist.
Acquisitions will certainly help to close the gap between
traditional content companies and those more dialed in to user
needs, but there is a broader base of the content industry
developing healthy margins that doesn't need an acquisition to
power their plans. And as in the instance of Craigslist, many
of these companies aren't likely to go the IPO route either.
Publishers and content services providers need to focus
intently on building hard-to-duplicate trust with online
audiences in an organic and patient manner. It may not make for
the most impressive show at a conference like the Information
Industry Summit, but if your blue jeans tell the story well
enough people will respect the success that you wear.
-
John Blossom
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