As a company that has as its tagline "Where Content, Technology and People Meet" Shore can only applaud the SIIA's decision to combine sessions for software and content professionals at its annual West Coast conference into one event this year, now dubbed NetGain. Seeing companies like Salesforce.com and Deloitte Consulting in one set of rooms and companies like LexisNexis and Wolters Kluwer in another room at this conference always seemed like a huge lost opportunity, only the moreso as Software as a Service begins to transform the face of enterprise I.T. services and content providers move more towards workflow applications and content integration technologies to build their market value. At the same time services like Google have long demonstrated that a technology that provides highly valuable context for content can be a publishing platform unto itself. So in many ways the software industry and the content industry are chasing the same high-value market opportunities and need to recognize that they have to speak in the same forums together for enterprise markets as much as for media markets.

I did not live-blog this conference, in part to participate in the SIIA's experiment in using Twitter to cover the event (see LiveTwitter's events page and look for NetGain updates). Larry Schwartz, President of Newstex, LLC, provided a consolidated collection of people's Twitter messages here for those wanting a more blow-by-blow account of the proceedings. I also posted earlier a piece reviewing presentations by Salesforce.com and Google that underscored the importance of "cloud computing" in delivering enterprise content services.

On one level NetGain was such a perfectly natural blend of conference attendees from the SIIA Content and Software divisions that one wonders why this wasn't done earlier. This was underscored by the similar product themes brought out in the conference sessions. When software providers talked about "Software as a Service," what it really seems to say in many ways is that software companies are not succeeding as much as they used to simply by licensing their software as intellectual property and need to adopt licensing models more akin to those used for many years by enterprise subscription database services. When content providers talked about the importance of "workflow applications," What they seemed to be saying was that they cannot survive just on licensing intellectual property that gets commoditized unless it's put to work through really useful software services. Either way both software publishers and content publishers are chasing the same value proposition in the enterprise increasingly.

And for that matter, how different is "cloud computing" from the decades-old content services provided in the financial services industry by securities exchanges and companies like Thomson Reuters and Bloomberg? Certainly the Web has accelerated the development of client-server content services beyond any scale of earlier enterprise services but at the end of the day software and content services have been in a merging industry for a long time. Alacra, which won a CODiE award at NetGain for its ability to integrate content into enterprise workflows, has been working diligently for more than a decade on its powerful AlacraBook content integration services. Eventually trends catch up with long-established realities, I suppose.

The big difference today seems to be the influence of the one key ingredient that was somewhat under-represented at NetGain: social media services. Clay Shirky delivered his usual great speech about how social media services are revolutionizing publishing and ecommerce and there was a very good panel discussion lead by Dave McClure, but the increasing preponderance of social media publishing services both outside and inside major enterprises just didn't seem to register with most of the NetGain attendees. We're moving rapidly towards a predominant publishing environment in which the audience is seeking out and defining the value that it needs from content far more rapidly than traditional I.T. and publishing services are defining it.

This raises the question: what is the platform for today's and tomorrow's publishers? Certainly Salesforce.com and Google, along with other presenters, raised a compelling case for the applications programming interface, or API, being the platform of choice for the forseeable future. Being able to plug in content and functionality into one or more platforms via APIs enables people with both content and technology services to put their capabilities into the contexts that audiences value most very rapidly. Certainly the flourishing success of Facebook's APIs has helped to fuel its growth even as Google's OpenSocial API promises to bring content into social media contexts more universally. If a platform does not have the ability for content and functionality to grow through the efforts of third parties then it's going to be hard to fuel growth efficiently.

But the real platform of today and tomorrow is the community built around a platform. Bloomberg and Reuters proved this out years ago as their messaging and conversational dealing services enabled securities market traders to communicate with one another more efficiently and to contribute valuable content that resulted in the execution of securities trades. While much of the financial industry's technology and content services have shifted towards more automated functionality, the heart of what provides the firms using these services with a market advantage is the ability of people to collaborate in marketplaces through publishing. Today a new generation of business information services is emerging, highlighted at NetGain by Hoover's and ECNext, both of which are focusing on how to lock in content value through their audiences providing valuable content in the context of their platforms. A publishing community is a community that can become the heart of any platform's value. Looking at how Salesforce.com itself is moving towards integrating social media functionality this concept is hardly a secret.

There were also a lot of interesting exhibits by CODiE candidates at NetGain, which allowed people to get more "hands on" with their products before voting - sometimes literally. I especially enjoyed J.J. Keller's Safe.Sim truck driving simulator, which although it did not win in its CODiE category was both a very powerful training and evaluation tool as well as a "sleeper" software hit. With a little bit of repackaging and some consumer marketing know-how this could be a huge software hit. Truckers and truck fans around the nation and no doubt worldwide would jump at the opportunity to have a multi-player online version of this, complete with their own customizations. As for me, well, I guess I have a few things to learn about backing a semi into a loading dock.

In the paid exhibitors area I was especially impressed by a couple of offerings. Mzinga is an OEM social media community development service for both enterprise and consumer markets, enabling the collection and sharing of valuable content that builds value inside and outside the firewall. Well worth a look if you're considering stepping into social media more deeply. Vitrium Systems enables PDFs to be turned into intelligent content payloads that track audience behavior without requiring plug-ins or downloads and can also provide DRM for PDF content. For those still emphasizing print-formatted content this is an interesting play, especially for those interested in getting more play out if eBook content.

On the SIIA Previews agenda two later presentations stood out clearly. Watch Zuora, a company that promises to enable subscription models for practically everything, including content and technology to be sure but also just about any business model for any fungible product or service. Model-wise I think that they're on to something big and I plan to highlight them in future writings. It's a spinoff of ideas from Salesforce.com using telecommunications technology, Keep an eye on this one, it may take a while to take off but I think that it has the potential to hockey-stick.

Another strong Previews offering was SlideRocket, which combines powerful presentation tools, graphics development and community content to create a new way to develop and share presentations that can capture metrics on how people look at them. I think of it being to tools like PowerPoint and Photoshop and Flash what Salesforce.com and Facebook were to enterprise software and online publishing - services that defined their own categories as a new kind of publishing and in the process of doing so redefined several market segments at once by focusing on owning user content. I can't wait to get my hands on the beta.

So it was a great event, though I would hope that next year we get to see more participation both by more West Coast local firms and more major East Coast and overseas publishers. I would say that the only real disappointment that I had from the event was the rather quiet audience, which seemed in many instances to be of the opinion that while things were changing rapidly in the publishing and software industries the changes that many tout as revolutionary are not going to sweep away long-standing business models any time soon. There's more than a small grain of truth in that outlook, of course. Yet looking at the news industry, now reeling from the effects of having largely ignored the need to transform themselves radically in the face of a decade of online publishing, I think that it's safe to say that NetGain represented in many ways the admission that later is sooner than many may think.

Labels: 2008, events, Google, J.J. Keller, livetwitter, Mzinga, Salesforce.com, SIIA NetGain, SlideRocket, Twitter

At the SIIA NetGain conference in San Francisco George Hu, EVP of SalesForce.com Products and Marketing, gave both a great summary of their product philosophy and a demonstration of their Force.com integration with Google Apps. Nothing terribly new in all of this, but what struck me more strongly than ever was how both their philosophy and their product development parallels and integrates with Google. George mentioned conversations with Google CEO Eric Schmidt which indicate that they are aligned on far more than just the product level. It would be foolish of me to speculate on a potential acquisition of SFDC based on George's comments, but the more that SFDC develops as a market presence the more that it seems that it is repeating the Google business model for enterprise content services (also known as Software as a Service, or SaaS).

First and foremost, SFDC built a highly scalable architecture that would allow for multi-tenant hosting, a very geekish way of saying that they have a server farm that has common management of SFDC software for thousands of companies' protected data sets. This is not so different from Google's commitment to creating a highly scalable common search service for its online audience, instead of trying to use online search services as a way to sell software and hardware (does anyone remember AltaVista?). Making your services highly scalable as one of your primary proprietary advantages gives SFDC enormous power to become a defacto content services platform much in the same way that Google's power to crawl effectively gave it a key market advantage.

Instead of having to sell copies of this capability, like Google SFDC focuses on content services. Yes, we call them applications in many instances, but the net focus of these applications is to enable people to consume or publish content. Enterprise publishers talk about enabling workflows as a premium content service: there's no real difference between what SFDC is doing and what publishers are attempting, other than the desire of publishers to promote their own proprietary content. Add in SFDC's integration with Google Apps, including Gmail for email services, and you have an "80 percent solution" for enterprise workflows similar in scope and impact to Google's 80 percent solution for search. Yes, we still have many high-quality search engines for enterprises, just as there will continue to be many other high-value I.T. products in enterprises, but as a percentage of I.T. expenditures they are certain to dwindle as content services enabled via the Internet "cloud."

The similarity of Salesforce.com's marketing model was underscored by a presentation at NetGain from Google's Matthew Glotzbach, Product Management Director for Google Enterprise. Matthew highlighted in a simple graph how in enterprises the mediation of I.T. departments and other business functions in the purchasing of content and technology services from vendors is different from the consumer model, in which people can access and select services from any number of vendors without intermediation - creating more effective competition and, ultimately, coopetition between vendors. Security, data privacy are always touted as barriers to a transition to more consumer-like access to enterprise content but increasingly with the theft of laptop computers in airports, offices and just about anywhere it's not clear that a mobile-enabled workforce is going to be served well by anything but highly scaled cloud infrastructure.

Long story short, we are well on the way to the Google-ization of both enterprise content companies and enterprise I.T. companies by Salesforce.com in combination with Google, with Google Apps acting as the "glue" between the two parallel clouds. While there will always be other clouds out there for specialized purposes - you won't see low-latency securities trading networks on SFDC any time soon, for example - I think that what we're seeing is the content/applications cloud enabled by Salesforce.com as the emerging de facto environment for delivering content and technology services for much of today's corporate environment.
In the process of becoming that de facto platform, the ability of small and medium sized businesses to scale themselves rapidly and effectively will change the competitive landscape in business quite rapidly on a global basis. About the only real difference between Google's dominance and SFDC's probable dominance is that one did it on ad revenues and the other on subscription revenues. I.T. vendors and content vendors looking at the SaaS space need to move far more rapidly to build effective cloud-based products and services - and to recognize that a winning strategy includes owning the cloud sometimes and sometimes playing in other people's clouds. I hope that's not too cloudy to you, if it is, give a holler.

Labels: 2008, Google, Salesforce.com, SIIA NetGain

The Marriott Camelback Inn in Scottsdale, Arizona has been the site of the Buying and Selling eContent conference for nine years, now, usually a most beautiful spot that lets your cares melt away so that you can focus on good people, good food, a bit of sun and great presentations. But Camelback was not its usual self this year, stuck in the middle of a major construction project that had the revitalized conference halls in good shape but much of the rest of the facility in turmoil. Rumor had it that Bill Marriott himself showed up over the weekend and flipped his lid when he found out how messed up and behind schedule the project hd become.

This turmoil seemed to reflect the unsettled nature of this year's Buying and Selling eContent conference, an event that brought together some very good speakers overall but which had some crashing lows to go along with its resounding highs. Attendance was off from last year's healthy showing but still had a good collection of both content vendors, technologists and institutional content buyers. Some of the presentations were downright brilliant and spot on: Y.S. Chi, Vice-Chair of Elsevier, gave a fantastic assessment of the content industry, underscoring his belief that the content industry was going to have to move towards providing experiences and not just content.

I had to smile at Y.S.' use of experience as a focus for content's value, having made experiences part of our definition of content five years ago: "Information and experiences created by individuals, institutions and technology to benefit audiences in venues that they value." I posted it on Wikipedia not long thereafter and there it remains in somewhat modified form (my thanks to Wikipedians who helped me to refine it). Y.S. demonstrated briefly what appeared to be a bog-standard MediaWiki platform that Elsevier is using to enable qualified medical practitioners to develop a medical knowledge base - an important step forward for Elsevier to compete with other scientific publishers experimenting with social media and one which I am sure will not be their last foray into social media as they begin to focus on building knowledge community experiences from the expertise available in their client base.

But this was counterbalanced by Andrew Keene, the self-professed "Anti-Christ of Silicon Valley" whose keynote rant on the "Cult of the Amateur" repeated his performance of vivisecting social media at the SIIA Information Industry Summit earlier this year. On Content Nation I go into this presentation in more detail, but the nut of his argument - or shtick, as the case may be - is that people creating social media are a bunch of monkeys typing on PCs who should step aside to let the established media be the professionals in charge of content creation and curation. I imagine that the doctors contributing to Elsevier's wiki project would take exception to that label - as would many professionals of significant insight who contribute to social media publications globally.

The thing of it is, though, is that there were more than a few people at the conference who were glad to side with Keene's point of view. Certainly there is a need for professional content creators and curators but overall we should be glad that so much additional value is being created through social media. If there was anything that I found to be particularly disappointing and disturbing at the conference it was the number of people who were not only invested in traditional content buying and selling models but who were on some levels downright hostile to emerging and highly valuable concepts such as social media. I was very pleased with the presenters in my own panel who tried to explain how Jigsaw, ECNext's Manta and the Near-Time social media platform were creating mission-critical business information, but for some reason their leading-edge efforts seemed to be greeted with some skepticism.

The low point for this "rear guard" action, though, was the Special Libraries Association-sponsored panel, in which Janice Lachance, CEO of the SLA , led a well-presented but utterly stale list of complaints about content vendors that could have been written from ten-year-old slide decks. I know Janice, and she's a wonderful person who has great insights, as do the people who presented: I expected far better. I think, though, that it's really not a matter of personalities or presentations but more a core factor with which SLA members need to wrestle.

Having come through many years of upheaval, in which more than a few SLA members have seen their careers shuffled from one part of their organizations to another, it seems that too often SLA members have been disconnected from much of the "experience"-oriented generation of content in their organizations that drives much of the value of content for their patrons. If they allow themselves to focus too much on licensing agreements their careers are going to be tied ever more more closely to their vendors, whose main revenues continue to come through licensing content. As long as there's content to license then they have a job, might be one argument, which tends to chain their organizations to ever-weakening vendor business models.

I don't think that this unfortunate symbiosis really has to be the full truth of the matter, and I know that for many progressive SLA members it is far from the truth. Certainly Bill Noorlander's panel on win/win relationships helped to show some shadowy outlines of more progressive thinking. But the vendor "dance" on licensing has been stalemated for far too long, a stalemate that's been dragging down both the vendors themselves as they drown in complex licensing deals that slow down and reduce sales and service, but as well their clients as they try to justify pricing schemes that seem to have little bearing on the ROI required by the line managers who need to justify content acquisition costs in their budgets.

Put simply, it's time to get the lawyers and the fiefdom-builders out of the way and to come up with a new and more highly automated regimen for content licensing that will meet the increasingly "just-in-time"demands of institutional content buyers. The manufacturing industry came up with computer protocols that helped to automate materials acquisition from suppliers nearly two decades ago: why has it taken the publishing industry so long to invest in similar techniques for enterprises? Perhaps increased competition from new sources of valuable content will stimulate their thinking. In the meantime I think that it falls upon the SLA to become far more visionary and to start participating in the development of standards for automated licensing already being developed commercially to help their institutions to use premium content far more cost-effectively as they adapt to the ROI requirements of institutions trying to survive in a real-time economy.

Stephen E. Arnold gave a well-polished and insightful presentation on the state of the search industry's place in the content game as old models for charging for content come up against the ability of search engines such as Google creating ever more sophisticated ways to aggregate and organize content. As Steve pointed out the enterprise search engine market is booming but failing to pull together all of the content resources that their clients need to create the most valuable and comprehensive content collections that their clients need. At one surveyed institution two thirds of users were dissatisfied with their search engines. Steve sees federated content services as one key solution to this problem, but in the broader picture with a new global audience for content growing up around devices such as mobile phones and an ever-wider array of publishing services from technology providers it's not clear that solving the role of search engines in their marketing is going to be that much of a solution for any content provider. There are far too many things in motion to which publishers simply haven't reacted.

I don't mean to short-change the other good panels that the conference had, which all provided some great examples of how best practices are being applied today for content, but I was not taking my usual by-the-blow notes in the middle of launching Content Nation, so some of my recollections are now sketchy. Suffice it to say that most presenters provided some good examples of how content value is being created more from value-add services such as better content organization. Collexis, for example, demonstrated powerful new ways in which content categorization can be used to discover people's expertise in highly specific areas that help to accelerate research in medical and research fields. I think that Collexis CMO Darrell Gunter's best example of this capability's power was when one scientist discovered something that he never knew - the fellow in the office next to him was working in the same area in a key line of research!

Mike Orren, President of Pegasus News, uses user-contributed content and networking to enable marketers to target offers that have a more than 60 percent response rate and zero opt-outs in some instances, driven by very careful matching of opportunities to audiences based on content analysis. And Cengage Gale demoed an online book club that helps people to drive book downloads and sales based on building communities of book enthusiasts.

But whatever the particular focus of the conference's presentations, the same theme seemed to pop up again and again: the increasing polarization of publishing inside and outside the enterprise based on the rise of social media. There are some publishers such as Karen Christensen's Berkshire Publishing Group that try to balance both very traditional forms of publishing while exploring the development innovative social media outlets. But for many publishers the need to balance traditional revenue streams while investing in social media technologies, which push their business model ever further away from their core expertise, is proving to be quite challenging.

Social media's rise seems to be just as challenging to content experts in enterprises, who see the rise of social media content uncurated by information professionals as a challenge that stretches their expertise that much further from being interfaces to licensed content providers. Jeff Cutler, now an independent consultant, pointed out in comments how the rapid rise of Answers.com's WikiAnswers online Q&A community is one example of how social media is creating powerful "social knowledge," aggregations of expertise that are increasingly competitive with traditional sources and likely to eclipse them in time. Steve Arnold pointed out how Google's Knol project, meant to assemble reference articles on key topics, is as much about creating definitive topic mapping from social media to empower its search engine as it s about attracting people to social media itself. Any way you look at it, the elephant in the room was Content Nation - the ability of millions of people to influence others through highly scalable online publishing.

Social media is more than just a generational divide: it's a cultural divide as well. While I might be a bit greyer than the average Twitterer, somehow I was one of those willing to cross the divide and to agree that social media has become the emerging center of publishing, much as the Web itself became that center several years ago prior to many publishers being willing to accept that fact. But unlike their initial transition to the Web, social media challenges both publishers and institutions to come up not only with new skills but entirely new inventories: you can adapt news, book, magazine and even audio and video content to the Web but there's nothing in most publishers' quivers that can be repackaged into social media.

Social media certainly helps to enhance the value of many publications and in many instances can create premium content to drive very valuable new content products and services. But in most instances what we're seeing is the rise of a new parallel content industry whose rise in a medium now familiar in some ways to most publishers has caught them yet again by surprise. The divides created by social media are far more profound in many ways than the divides created by the Web. Most people of an employable age have an email account, perhaps even a few. But there are few in senior positions in the publishing industry today who have a Facebook account or even seem to want to have one - while younger people may not even see an email account until they get their first job.

One familiar and vocal person at the conference tried to downplay social media as "nothing new." And she was right, of course: social media has been with us for thousands of years. But the scale of social media's influence creates a social divide that seems to be leaving many publishing experts flat-footed in their responses to the marketplace. That's a problem that future iterations of this conference will have to address more fundamentally. The events industry, the social knowledge industry, the technology industry and the media industry are merging in ways that are helping to create a new real-time knowledge economy that cannot be responded to easily by many.

I am hoping that the next iteration of this conference will bring back both some more healthy crowds and more of a focus on the value propositions that people are seeking in the content marketplace. From buyers, I hope to hear more about how they are creating value from content in their enterprises and what they need to do to achieve ROI from internal and external content. From sellers, I hope to hear more about how they are leaving old licensing models behind to find new ways to respond to the real-time needs of their marketplaces. And from the Information Today, Inc. staff I hope that we get a return to a commitment to the thoughtful assembly of topics and presentations that drive people to more provocative thinking about the future of the content industry. Let's hope that both Bill Marriott and conference attendees will return to Camelback next year to find both a familiar place and a place transformed by a new outlook on its mission.

Labels: 2008, buying and selling econtent, events, Licensing, sla, Social Media, Trends

This year's SIIA Information Industry Summit includes for the second year the "Previews" event, an opportunity for major publishers, technology companies and investors to take a look at the up-and-coming companies in the content industry. There were at least 63 applicants for appearing in the Previews event, of which ten were chosen, so the quality of the companies is quite high overall. I live-blogged most of this, so some of it is a bit rough, but I think that you'll get the flow of this very dynamic event - and some good insights into some of the best of new content plays.

State of Startup Investment - PWC

Investment in venture plays remained strong 2007 according to David Silverman, Partner at PriceWaterhouseCoopers' MoneyTree report, with a 10 percent CAGR boost over 2006 overall and USD 70 billion-plus across all quaters. Software investment is down as a catgegory, but with investment up strongly in the media and entertainment industries and in business processses, it's a strong sign that technology plays are working their way up the value chain into solutions that inevitably make them increasingly content plays. Valuations on established companies are down, pushing more investors into earlier stage companies. VCs were able to turn 86 IPOs in 2007, the highest since the dot-com crash and a hopeful sign for emerging investments. There's quite a but of money that's being raised, so as the economy softens smart investors will continue to look towards venture capital plays to help them weather the down markets by building new value.

I will be providing short takes on a relatively live basis as the speakers provide their elevator pitches today, stay tuned for updates, when my batteries run out I'll post the rest this evening. The good news is that we got connectivity at the last minute for blogging.

Larry Schwartz, President, Newstex - How did the Class of 2007 Do?
Larry's quick update to last year's Preview event, apologies for scant details:

Eurekster: 5.5 million in financing, averages 25 million queries versus 10 million in early 2007.
Generate: 80 news customers, including Hearst Newspapers, Thomson Financial and Yahoo.
Near-Time: Added Wiley, CareFirst, partnership with U.S. government for "green" initiatives.
Inform Technologies: 15 million investment, 40 media clients
Pando: 16 million application installs, powering online delivery for NBC.
Attributor: Deals with AP, Reuters, speaking at IIS
Cranium Softworks: New product launches, anticipating funding in 2008
iCopyright: added 500 publishers in 2007, 5,000 transactions a day

Business & Investment Climate Update
Moderator: Bambi Francisco, CEO, Vator.tv

Brian Hirsch, Managing Director, Greenhill SAVP
Robert Levitan, CEO, Pando
David Silverman, Partner, PricewatershouseCoopers LLP
Ed Reitler, Parther, Reitler Brown & Rosenblatt LLC

Levitan: Lots of support for early-stage companies, later stage companies lot of support for known business models. VCs like to do due diligence on known business models. Our S/W deployed as consumer app, from 2 mil to 16 mil installs, everyone understands "freemium," took software up a level to corporate customers, NBC using technology between media player and software delivery network. Figures out if/when content should be downloaded, eliminates 80 percent of delivery costs. People don't know how to price this yet, it;s enterprise sales, sits on desktop, but still feeling their way through business model.
Bambi - rise of angel networks, lots of compa. nies that don't need VCs, just a few millions
Lots of CEOs using blogging to reach out to both investors and clients.

Silverman: VCs looking for established models, want to see revenues, profits when available. Might see more of a risk shift into earlier stages. Very vibrant market in NYC and beyond, downturn can happen but businesses are moving along. good opportunities for future.

Reitler: Good healthy growth 2003-2005, in current slowdown vs. internet "winter" of 2002-2003, not the same problems with recapitalization, more sustainable growth, slight uptick in early stage companies, healthier capital base. Lots of funds were insured, by SBA before, this time around plug is pulled on insurance. But deal flow is still strong, venture funds aren't investing in highly leveraged deals, mostly pure equity deals. Cash-rich institutions are taking on compelling business plans, as long as revenues come in from advertising and lead generation, should be a strong environment.

Hirsch: May be a recession, but doesn't really impact investment on innovation over past 30-40 years, many of the best companies were invented in the worst of times. But valuation is a factor, may have to give up more of your company or settle for less capital. Don't let economy stop you from starting a business if you have a good idea.

Bambi: Where are funds being deployed?
David: More of the same, biotech, med devices, in NYC internet ad companies, content creation companies, IAB/PWC quarterly report on interactive advertising, phenomenal growth, increased penetraion, more broadband, but need more technology.
Bambi: Brian, where is your money going?
Hirsch: Half of cos in marketing services, leadgen growth is accelerating, more measurable ROI, more value to marketers. Online ads, peel away Google and Yahoo still growing healthily, pure ad model challenging if you can't aggregate enough of an audience. Very careful at deploying dollars, west coast more aggressive in funding ad models. Not more risk-averse, like info-driven models, oppys for ad-driven models but pure ad-driven models can be developed via angel-backsed investments but for 30-50 million exits need to be highly efficient with capital and growth plans. Exits in social networknig are in 15-75 million exit range, not a lot of breakouts expected, cautious therefore for ad-driven.
Silverman: Big deals with nice returns, big players picking up pieces. [COMMENT: This is key, good time to pick up feautres and content that can make you stronger.]
Levitan: Video advertising is ripe for reinvention, will be nothing like pre-roll/post-roll markets today, complex algorithms will generate matches that will provide huge returns.
Reitler: Quigo had great returns. Leadgen offers still a lot of room for growth, buy media low and sell leads high, like a securities exchange, leading sellers to buyers. E.g., driveway pavers, narrow niches can be matched very precisely.

Bambi: Funding, what't it like raising funds today?

Levitan: Most VCs like to see mature business models, I enjoy being somewhere else, but telling the story requires much more education, investors need familiar benchmarks. Bambi: Do they care if you have revenue? Levitan: depends what traffic is for. As entrepreneur, a lot more people know a lot more details about a lot more business models. Kids may not have the full picture at how business models can grow. VCs are so smart, angels look more interesting for people proving ideas out, may be able to avoid VCs altogether. Previously it was a badge of honor to have a VC, but now you don't need that endorsement as much. Some VC funds will have to adapt.

QUICK TAKE: Funding is still healthy, private money has no where else to go right now, angels are more important than ever and there are plenty of people who may be able to make progress without going deep into VC money. Angels are getting more sophisticated, so the lines may be blurred to some degree.

Presentations Round One

ExpoTV: Video storytelling about products. 200K product reviews, unbiased, screened, coded, organized. Treat usergen more professionally, full rights to content and creative purchased but compensate contributors. Lots of metadata, more than in usergen platforms, leadgen revenues from ad inserts. No longer lonelygirl15, it's "lonely mom" as a consumer advocate. Syndicates to Yahoo! Shopping, Oxygen, Amazon, TimeWarner, Beliefnet, Planetfeedback. 8x video play growth, current views 2 million a month. Refer a friend program, most find it via the portal. Leadgen model is a winner, reviews are so highly targeted it should work very well. Also ad revenue.
QUICK TAKE: This is a strong play, great combination of community, structuring unstructured content for sophistiaced retrieval, syndication strategy, building revenues and reputation for contributors. Fairly high barriers to entry already with solid deals and content maintenance.

Health Monitoring Systems: Katrina hit, NOAA knew exactly what would happen, in contrast, no such event management, epidemics come but with no forecasting. Many events don't bloom into health crises, others do unexpectedly. Maps of disease patterns. 2006 Superbowl fans got sick on the way home and spread disease down I-80 in Ohio. Vision is to be national surveillance system for health. largest in U.S., 500-plus hospitals, customers in 10 states, looking fo expand data sources, provided by hospitals, they own analysis. States buy subscriptions.
QUICK TAKE: Didn't present all that well, but it's a pretty good play, that is, if they can build momentum. The "get it" factor is pretty good, there's a real market need. Low barriers to cometitive entry overall, but its pioneering position can help them build deal flow. Down economy may slow adoption. However, also possible to cross-sell into law enforcement.

LinkStorm: Pop-up content contextually related, focused on ecommerce, related products, 3x boost in click-through rates, equipped with graphics. Multi-level menu of options makes drill-down easy. Measure heavily user engagement, track click-throughs on a per-menu-item basis. Advertisers can act on insights and optimize menus real-time. GM, Overstock.com, Cisco, SAP, many majors. Estimating 100-200 million exit [COMMENT: well, with luck, never know]. "Roll Over" cue on screens demystifies use of technology, it's transparent, strictly OEM model. Take in feeds, will show all relevant products automatically, can sell sector data also.
QUICK TAKE: Great to see this technology find a home in advertising, solid investors backing it who understand markets, Makes each click much more valuable, user self-qualifies for more specific products before they ever get to actually click. Some barriers to entry given Sidman's investments in technology from other efforts, but main barrier is deal flow, he's moved very quickly into small presences and needs to expand it quickly before it gets positioned more as a feature than a platform. Pretty good bet for future growth, Google others could acquire, so exits are probably plentiful.

TutorVista: 5-10 million hours of free tutoring to give away, VOIP with whiteboarding, scheduled in advance, 30 subjects, PowerPoint-enabled instructional tool. Ad-driven, CEO helps to optimize content. Big push in India, Bangalore-based, tesp prep centers, 120 million Indian students attend centers. Creating branded "private schools," Sequoia, LightSpeed on board. India has the largest below-19 population, huge market. Tutors compensated well, double what they would make at university or schools, low turnover. new, voice-based tutoring, not a chat, subscription-based but some ads. Goal is a million tutees in a couple of years. One-on-one personalized tutuoring.
QUICK TAKE: Has competitors, but its focus on India's domestic market as well as international markets is key. Expect strong rapid growth, technology really isn't the issue, sounds fine overall, it's the VOIP that allows personal interaction that can make the difference. Solid, relatively quiet investment which is good for the investors as it's growing strong.

FeeDisclosure: About 1/3 of fees for closing mortgages are junk fees, fees for Adobe's free Acrobat software, etc. Identified fifteen categories that make up a real estate transaction, brokers give data for reporting and can become featured members, similar to LendingTree. Data includes service provider ratings, professionals provide trust by providing full disclosure. Forcing market to become more transparent. Consumer can compare their closing costs to national averages, whether fees are common. Patent pending. Can break down data to zip codes, price, location closes to home.
QUICK TAKE: Good basic argument, huge market, may become a trusted leader, in a tough lareal estate market this may be appealing for consumers, new legislation may force disclosure, pubic sentiment behind this. Could flip quickly, management seems professional, know their. market.

Presentations Round Two

Vator.tv:A platform for young companies to be discovered. started with 250 companies, now 800-plus. Wants to be the place where startups grow up. Wants to provide services and features that helps them to do it. Distributes news from companies via Blinkx, AlwaysOn, YouTube, VentureBeat, Mashable, profile updates get picked up as blogs. Hoover's company profiles are static, Vator.tv profiles are dynamic, cover hiring needs, creating announcement in video, RSS feeds, constituents, can help audiences to find related companies. A resource for other sites writing about these companies. Looking to make 70 percent of content from community, 30 percent editorial [COMMENT: This is probably going to be close to the de facto industry standard]. 1.5 million total views, seeking $30 CPMs, potential value in archives, subscriptions to data cuts. Thinking about value-add from directories of angel investors, etc.
QUICK TAKE: Sounds like an idea bigger than its initial packaging, still too early to tell where this is going. With Bambi's reputation it's likely that she'll have the entrees to make this fly to some degree in the long run, and "build it and they will come" can work when you have a highly focused and monetizable community such as high tech/content startups. Watch this as a potential model for evolving trade media in new directions - long run looks lot betster than the short run.

LingoSpot: Monetizing links. Harder to interlink in large sites, can be expensive proposition. Automatic, dynamic document interlinking - zero effort from pubishers, natural language processing provides links to relevant information. Can embed related videos, Amazon content. Sees 12 billion addressable market. More time spent on pages, Monthly licensing fee, revenue share on advertising sometimes, for example on video pre-rolls. Launched in July 2007. Looking for 3-4 million.
QUICK TAKE: Sphere-like but no big deals, more contextual analysis of keywords, like Sphere it can help people find more content in their own site more effectively. has potential but there's so much technology chasing these problems I worry about whether they'll be able to get significant deal flow and buzz to differentiate.

ArchieMD: Rich graphics for online service with deep content that can educate people on the body, diseases and injuries. High school students, military surgeons, internet health portals, general public, jury education - have 300 law firms as clients - with both generic animation and customized animation. Reed Elsevier partnershipfor health professions and higher education, looking for wider scope of distributio n for legal. A.D.A.M. is primary competitor but is more text oriented.
QUICK TAKE: This is a strong play, a good variety of audiences, monetization models, high-end value and mass audience value, Nobody really owns this, I think that main challenge is to make this a model that can interoperate with as many environments as possible. I can see markup with social media APIs something that could be quite appealing . A Google Health exit, perhaps?

Keibi: Control and measure user-generated content, adjacency is an issue for many publishers, moderation suite is key product. MySpace has tiers of moderators, small publishers have maybe one or two people, it doesn't scale either way. Content is ranked, scored, looks at other signals, prioritizes most likely offenders, keeps moderators productive. Hosted SaaS model, mostly subscription model with some CPM-based ad models. Has Bebo as client. Certification model, Keibi will provide a rating for a page of content (G/PG/R/X is general concept), ability to manage scores to be appropriate to specific advertisers has a filed patent.

QUICK TAKE: A highly useful service, SaaS model is fine, can be expanded, helps to decrease costs while growing UGC as rapidly as possible. This is a market that will grow significantly, has potential to become an industry standard, the need is clear, will only grow, competitive environment unclear, could wind up with too many solutions following a specific opportunity, but it seems to be a pretty clear field right now.

Courtroom Connect: Discovered more value in getting content out of courthouse than content into courthouse. Video will change practice of law, they capture the dramatic moments. Demo of Bill Gates testimony in antitrust suit, video side by side with exhibits of stamps, squirming as his testimony doesn't match exhibits. Cost MSFT 100 million on that case alone. Networks installed in 50 courtrooms in major markets, developing data bank, makes money on big hits but long tail is strong, 15-plus years of reuse. All major legal firms, legal outlets, can help lawyers be much more efficient. Universities want content in curricula. Review videotapes of opposition, helps them to prepare against lawyers and expert witnesses. Interactive focus groups, exhibit & document sharing, YouTube professional commentary. Revenues growing 50-100 percent per year. Existing television networks look only at sensational stuff, these are money-oriented trials.

QUICK TAKE: Wow. What a great application of public informaiton to a high-end and media product, well-placed, building up huge expertise, winning bids against telcos who see only the infrastructure opportunity, text transcripts are pricey, they have video and multimedia, more efficient. Oftentimes network installations are exclusive deals, like Wayport in hotels, so you have an exclusive service channel with deep content. Strong, strong, strong.


Closing Keynote: Kevin Ryan, Co-Chairman and Co-Founder, Alley Corp

Growth of Doubleclick was like 40 years in 9 years, dot-com crunch as "less fun," 70 percent of clients went bankrupt. Panther Express doing well, other key deals, ShopWiki, User-Generated Nation, SampleSales Online - needless to say a deep and successful portfolio.

Traditional media companies - it's going badly, but it will get much worse, "It's a disaster." Time-Warner has lost 80 percent of value in 18 months. Market Cap of TimeWarner now smaller than Google. Yahoo wouldn't budge off of one billion to buy Google [oops]. Google is even more powerful than people realize, sucking all the air out of the room. Numbers staggering. New York community is incredibly well positioned for startups, compared to ten years ago it's night and day. In 1950s, TV didn't wipe out movies, but movie consumption went down 90 percent, fundamental trends can change industry dynamics. Internet not as bad as that because human nature hasn't changed that much. But same people may not make the same amount of money. Profit margins were related to distribution monopolies. CapCities/ABC deal, how could ESPN be worth more than ABC, saw the 10x growth of value of ESPN. Structural problems, distribution, cost structures "just ridiculous." Doubleclick now worth 3 billion, Warner Music 3 billion, 10 people at WM with more than a million in compensation. Is that inherent in the model? $120/sq/ft offices is a choice. EMI was buying expensive "flowers" hand over fist, turned out to be hookers and drugs. [Sheesh]

"Traditional media companies have not been able to create new value in the online media space." They said "Wait 'till the big boys get in there," now not a single one of the top companies online was created by a traditional media company. People from startups have created more market capitalization than existing media companies from their infrastructure plays. Media companies are making better acquisitions, About.com, MarketWatch, MySpace, but cannot create internal DNA to be more competitive. On fundamental issues it will get worse, if I had a Kindle-like device to read my New York Times I would, not far away, about three years.

On Google side, "Google will be the first trillion-dollar company," takes percentages of other markets' ad shares consistently. Take out the Google numbers from internet spend, growth is in teens, not 30 percent. Will probably dissipate, number ten-priority products will suffer, but leading products have 80 percent-plus margins.

New York companies - why still in NYC was a question in old days, couldn't get a lawyer in 1996 that had worked on an Internet IPO. Changed completely - ten to twelve ex-Doubleclickers have developed their own companies. Two thirds of people in a recent Meetup for online people were already on their second startup. Infrastructure is here, will benefit from recession, relative value of VCs versus private equity will increase. Investment banks have no deals to talk about. Fundamental trends are not going away. 5 billion of acquisitions of New York-based media, more than Silicon Valley, don't hear about it, tech community "has a chip on its shoulder." Ladders is huge, don't hear about it. Digital media is a big growth area, New York is logical space, fashion is here, advertisers are here. Look at how much you spend per person in real estate, just use less per person. 6,000 per person on real estate, 3-4,000 in Pittsburgh, not as compelling as getting the right people. Oursourcing makes some functions more cost-effective for NYC work. Need better VC infrastructure, Boston firms are all working in NYC every week. Biotech still in Boston, but more pure technology companies like Doubleclick appearing in NYC. Lots of people being "freed up" from Wall Street this year, will learn that the Street is not as secure as they thought.

All of this creates opportunities. Social media is hot, but risk-reward is not always there. Look at taking areas worth billions and seeing if there are all the products that you need in the space. TheLadders was targeted at 100K+ jobs, those people don't use Monster, return will be huge. Re-segment markets - five windsurfing magazines in France, always opportunities. "If you spend more than five minutes online trying to find something, there's an opportunity." Hotel niches, retail niches. Video serving costs dropping rapidly, down to levels where advertising can support access. Magaines, radio are ugly, TV is not as bad, harder for a startup to do from scratch. Music labels are worth almost nothing, devastated.

QUICK TAKE: Not all new news, but a very compelling present on the online content markets that I've seen in a while. I'd agree that some of the Silicon Valley narcissism may have reached some sort of threshold, and I agree that NYC offers strong opportunities for startups picking off the bones of larger media companies and the ready pool of advertisers, but I'd suggest that the footprint is broader, more of a Bos-Wash Corridor community. That's where the West Coast iations a little more advantageous in some ways - a more concentrated community. The key factor is that there is not that much happening that's fundamentally new in consumer media technology lately. Apple's iPhone's advantages are based mostly on their largely failed exclusive deal with AT&T, for example. So we'll see whether there's any shift to the East Coast this year, I'll have to think about it but I'm still betting on a lot of trips to SFO this year.

Hope that you enjoyed this, more tomorrow on the Information Industry Summit

Labels: 2008, investment, SIIA Previews, startups, venture capital