John Patrick of Attitude, LLC moderated a panel including Jason Calacanis of Weblogs, Inc., Jeff Pulver of pulver.com, Inc., Chris Shipley of Guidewire Group, LLC and Dr. Robert Sutor of IBM Corporation. Jason sees blogging as "the new business card," a repository of one's insights that shortens the distance between people trying to get to know your outlook and opinions. Jason doesn't see video weblogs taking off terribly well, though, as production values will probably make it hard for people to create a quality product (I am not sure that I agree with that, Star Wars Kid pretty much blows that out of the water, and there is a ton of truly fascinating amateur video on Google Video). John pointed out that the technology is pushing more easy-to-use tools into the hands of users, but Jason is right that there are lots of people who really aren't interested in being a global publisher. Yet when you come to think of it over the past few years we now have enormous multiples of people who have a dedication to works of public authorship than we did only a few years ago. It takes a while to mine that "Long Tail" content but the numbers are favoring quality diamonds coming out of the rough that appeal to a wide variety of focused audiences.

Jeff is focusing on the "purple minute", the ability to do things with existing communications models via Web technologies that get extraordinary value-add through Web add-on capabilities. SMS services on mobile phones that automatically send messages to family members that your plane has landed based on GPS data and other value-add services are only in the early moments of being defined. When you start knowing where people are and can transcend multiple communications channels, lots of things can happen. Chris will have more than 68 companies at her upcoming DEMO conference, many of whom will focus on getting the right piece of information channeled to the right users, adding great complexity that "may be bringing us to the point of diminishing returns." Chris sees the need to get technology more right-sized to people's real needs and simplify their lives rather than to make them more complex and exhausting. "The job of I.T. will be about maintaining reliability and will not be about defining applications," Chris notes.

On the standards front, Patrick noted that the State of Massachusetts is about to adopt the OASIS Open Document information programming standard that will allow content from office automation software and other sources to be defined in a non-proprietary format that will allow for long-term use of content. Robert noted that we are used to a very proprietary world of software and content, but now with weblogs and other Web tools people are getting used to the idea of having control over their own content, which is likely to raise many issues as to who will be protecting their intellectual property (and how they will do it).

It may be wishful thinking to imagine that three generations from now people will be able to open documents and enjoy them, but it's the direction that content creation and packaging needs to head if we're going to have effective and efficient management of intellectual property rights and cohesive archiving strategies that are in the public interest and the interest of major institutions. It's also the type of fundamental change that will make content technologies far more affordable in developing nations, a crying necessity if the economic benefits of content technologies are going to be realized on a global basis. So in a very important way open document standards and other open source initiatives are essential for both a global economy and global stability. With non-proprietary standards the push in value is towards building value-add services on top of more broadly available universal communications channels. The ceiling for potential value generation in content services is higher yet.

In the process of creating all of this universal content, John noted that there's getting to be more metadata that frames content in XML documents and online tagging services and directories such as RawSugar than there is core content. Robert notes that folksonomies do have great potential with "a lot of legs left in it." But when it comes to some premium content services, technology is not really up to snuff with basic consumer expectations. Jason dissed the limitations of DRM-enabled content on iPods and the maddening limitations of TiVos as not only inconvenient but also handicapping the development of content in "old media" countries that will slow down those nations' growth in comparison to nations that have less of an investment in intellectual property rights as conceived today. The implications of getting this right are possibly the most important industrial issue today short of managing a global oil-based economy more effectively.

There were lots of other great details but the bottom line is that the pace of technology change is leaning heavily on the very core of the content industry. 2006 will be a year in which these technology trends will certainly accelerate, but the train has already built up a very strong head of steam. It's a pace that many content companies seem to be resigned to try to run at their own pace to take advantage of them, which is fine from the perspective of taking a carefully-planned route but there's no guarantee that you won't be walking most of the way for some time to come. It was a fantastic conference and we were truly honored to be a part of it. Thanks for everyone's patience with my questions!

Moderator Bambi Francisco of MarketWatch started out my recalling users commenting on her weblog who suggested that she should keep her personal opinions to herself. Hmm. That's the ultimate truth of user-generated journalism, an environment in which not only are users primary authors they're part of an extended conversation that is moving journalism towards a much more conversational framework. Panelists included Jim Debth of The American-Stateman, Susan DeFife of Backfence.com, Jeff Jarvis of BuzzMachine and Roger Simon of Pajamas Media. Jeff pointed out that Bambi's experience was indeed indicative of how users are an essential part of the online journalism equation: "In this new world, anyone can find a wiki to communicate online, or let's blog the conference. You, the people, have power. It's about people making connections. The people have control. If you fight that, you will lose. We used to control the pipes, but those days are over."

Jim Debth provided an "old media " perspective, emphasizing that "The Internet is here. Don't be a bystander." That seems to be the main theme for many things at the conference this year: the Web is no longer anything that can be finessed indefinitely by most publishers as a secondary revenue stream. Luckily for Jim, Pluck's office was just a few blocks away in Austin, TX, which helped to get them thinking about how to use weblogs and RSS feeds to drive more revenue from classifieds and other ad sources. The Statesman's weblogs use Multiple levels of authorship rights that help them and their users to control the publishing of content. There are staff blogs, community blogs, opinion blogs (op-eddish content) on a wide variety of topics, all of which get prominent displays. So far this makes for 600 webloggers producing more than 1,700 blogs - tons of new page inventory with focused community value. "We've just scratched the surface," Jim notes; given the potential for community value

Roger Simon's 90 affiliated webloggers are providing a daily reach in the millions and growing steadily according to Alexa, with Nielsen data confirming their own internal numbers according to Roger. Roger tries to locate webloggers from across the spectrum, he claims, but sees that they've been labeled a "center-right publication." They are trying to grow their network of weblogs fairly slowly, having grown from about 70 weblogs at their launch last Fall. Pajamas Media is more of a referral service than a weblog, with a thin layer of editorial content that points readers to affiliated weblogs. Will this work as a business model? We'll see, but it is managing to build traffic fairly effectively.

Susan outlined the growth of Backfence.com, at which the home page listing of city communities on the service is managed and the rest is given to the users to post news articles, classifieds, local events listings, photos and comments, with plenty of safeguards in place to try to backstop bad behavior but it's for a very small fraction of contributions. It's a community taking care of itself on a collaborative basis, self-policing to some degree because it's people in your own community who know you anyway.

What should a front page look like in user-generated media? Jeff recommended digg as a good example because you get a sense of what people care about and to provide feedback that matters to a community. "If you give over control to the users, you will succeed," Jeff notes. Jim sees that people on weblogs take more responsibility for the quality of their postings than do people in their paper's online discussion groups, providing him a sense that giving users some control over their own content will provide a certain degree of self-policing.

Webloggers can cover stories that the mainstream media may ignore, which gives opportunities for services such as Pajamas Media to help drive users towards stories that they believe are important and to drive webloggers towards them. Roger doesn't see user-generated journalism driving out mainstream journalism; given the immense range of content sources being provided by users, including photos from community events, and other types of content that are not the focus of traditional journalists. Roger sees video being a "killer app" for online content, which is going to add to the din. Jeff gave the example of the famous CNN walk-off by Robert Novak, which had probably a few hundred thousand people watching it live but has had tens of millions of downloads from various weblogs. The "Star Wars Kid" phenomenon is alive and well and creating repurposable video of intense interest very quickly and effectively via the attention of weblogs.

How to motivate people for all of these activities? Dan Gillmor, pioneer of citizens' journalism, had to pull back from his own efforts at Bayosphere to get people to generate content, underestimating both the business aspects of running such and effort as well as the tools and shoe leather required to get a community to buy in to such a concept enough to sustain it with content and ads. Some users will be interested in compensation, but in the instance of The American-Statesman the payback is an audience that can be drawn to featured webloggers. Jim's not sure that compensation via ad revenues is in the immediate picture, but "we may entertain the idea" at some time down the road.

Beyond weblogging there are tools such as Flikr to organize photos and podcasting networks, adding to the soup of content that must be indexed, tagged and otherwise organized into useful forms. User ratings are a key component of this sorting process, but it's early days to get audiences large enough at the local level to make that an effective tool. There will be quality control issues, to be sure, but as Susan pointed out mistakes and outright deception are well-known traits of professional journalists as well, unfortunately. A key plus of weblogs pointed out by Roger is that oftentimes feedback may be caustic but it will be generally immediate - something that doesn't always happen with a mainstream media outlet, even with fact-checkers and public editors.

Tim started with a slide of a cow to highlight some thoughts from The Wisdom of Crowds about how looking at a crowd's average guess of the weight of a cow can yield some pretty accurate answers. It's an appropriate image for the day after Google stock took a radical haircut on a disappointing quarterly earnings report, as contented cows are not always aware of the threats to their livelihood. Google likes to say it's focused on its users, and increased use of its search and media products seems to bear that out. Tim highlighted the massive scale of content and the worldwide local audiences that have been barely scratched as an indicator of how early it is in the process of media companies learning how to serve users in an online environment. He points to services such as Peapod that deliver groceries to his home as user-oriented capabilities that seemed very dot-commish when they were first launched but quickly become part of a lifestyle.

So what do users want from Google? Tim pointed to the concept of asset management as a tool to define what assets that a vendor (or Google itself) may have that they're comfortable exposing to users and to understand how those assets can be exposed most efficiently to your marketplace. These assets need to be very personal: Tim gave the example of a retail chain such as Target that may mean to a user a place to find a specific kind of toy for your kids but that may not project that specific meaning to a specific user targeted by their sale fliers and other media. Google works to make the monetization of those personalized value statements possible via their contextual ad services that allow click-through pricing to be scaled to an ad's popularity. This idea of letting users define the value of the product is pervasive in Google culture, from AdWords and AdSense user-driven auction pricing to its seminal Page Rank algorithms to a mashup of Google Maps and content from Craigslist that provides popups of real estate data from Craigslist. Tim boiled this down to a simple formula: understand your company assets 100 percent and reach 100 percent of the relevant users who need those assets and get 100 percent of the possible useful feedback and you cannot help but to succeed.

This all makes good sense, but managing brand value as a core asset can be tricky in this equation. Google is wrestling with a number of reputation threats from weblog comment spamming, censoring its China portal and questions as to how it manages personal and copyrighted content, which place pressure on Google to be the vendor-neutral venue that is one of the cornerstones of the Google brand. It's easier for a Yahoo, which is already clearly in the "we play well with corporations" camp, to have far more latitude in the short run to work with corporate advertisers to help them develop their brands online. Being user-oriented and still effectively reaping the growth of online ad dollars from major corporations can be a tricky dance. But Tim laid out a roadmap of how Google is working with corporate advertisers to use Google's contextual ad facilities to test out creative materials for ads to help understand how to target users effectively before committing more ad dollars on traditional brand advertising. The Google-AOL advertising deal is likely to build on those strengths and capabilities to allow for more innovation - and better margins from brand advertising.

It was an interesting step for Google to speak to a large SIIA audience, an acknowledgement of sorts that corporations may not be individuals but they are users of a particular kind. I am not too worried about the Google dip in earnings in the long run, because it's in general easier to adapt existing channels of advertising to a fundamentally user-oriented business model than to do the opposite. The main question mark is whether the friendly cow image that Tim flashed up on the screen will remain the benign image of Google or whether media frenzy and missteps may lead to a significant erosion of the Google image that will eliminate hard-to-replace user trust. For now, it's pretty likely that the Google cow will continue to take these things in stride and continue to churn out buckets of profits for a long time to come.

Adele Morrisette, of North Haven Partners, Inc. moderated a very interesting panel on the latest deals in the content that included Michael J. Kelly of AOL Media Networks, Mark McLaughlin of Verisign, Inc. and Dennis Miller of Spark Capital. What's different this time around from the bubble era of deals? Michael notes that today deals are vetted more vigorously, and yet multiples are still in the 5x to 6x range. Where's the value? Apparently in the structure of the deals, but there are different categories according to Michael. There are deals for companies that won't scale easily, for example, that may not reach those lofty heights. Dennis notes that widespread broadband, lots of online ad revenues and new excitement from equities markets are combining to create another huge disparity between some "old" media companies and "new" media companies, which are kicking in multiples more in the 40x range. Mark has a different take on deal as a corporation acquiring properties, citing the difficulty of bringing companies public in an era of stringent IPO compliance rules, which tends to favor private deals rather than the public route. Fortunately he sees that there are now much better rules for evaluating multiples than in the "bad old days."

Adele popped the key question to Michael: USD 25 million for Jason Calacanis' Weblogs Inc.? "We wanted Jason," Michael made clear, wanting both his personality and a leg up with leading weblogs in a rapidly expanding marketplace. But still, they felt that they had the metrics on their side with the potential for cross-promotions throughout the AOL network that standalone silos may not be able to leverage effectively alone. Dennis saw the Capital IQ acquisition by McGraw-Hill's Standard & Poor's unit in a somewhat similar light, a company that took advantage of an opportunity to outshine financial content majors via a well-executed Web product that was able to grow quickly. Factset and others were in the race but all of a sudden McGraw-Hill's multiple tripled and nailed the deal. By contrast, other companies were offering higher multiples for the virtual aggregator Moreover, but Mark saw the superior infrastructure offered by Verisign offering Moreover a stable platform on which to grow cost-effectively.

Michael looks for revenue accelerators as key acquisition targets for AOL, through building audience but also when infrastructure can increase the yield from individual users through superior infrastructure and staffing. Video search was one area in which AOL moved early on, but is now looking at companies taking video to the next level that can index content in near-realtime and create a whole new market for video content search products. Owning a piece of the landing zone for searches looking up premium video for sale is also a key component for that strategy.

Paid content is definitely on the radar for these acquirers, but it's going to be difficult to get pricey subscriptions based on old models when there is a plethora of content available for free, legitimate or otherwise. "It has to be part of some other bill," Michael notes, underscoring the need for effective ecommerce management as a key criteria for any content company acquisition. So in his mind Video on Demand (VoD) services are likely to be tied to existing services with service infrastructure that can manage these transactions effectively, fueled both by payments and more effectively targeted advertising.

Great stuff, but where are deals really going? As fast as they can towards plays that are chasing the users whose habits are changing radically across a broader array of content formats and channels than ever before. In B2B markets it's somewhat different, where people paying for value relevant to solving business problems, Mark noted. But this is likely to become more the case in the consumer space as the solutions to solve problems get far closer to highly personalized needs. Given the plethora of VC firms chasing deals and companies more willing to go out and cut their own deals, it makes for a pretty heated bidding environment. Dennis sees a middle tier of companies that make better targets in this environment where it's easier to work with somewhat mature businesses that can be combined with other pieces to create strong revenue accelerators more quickly. The rewards may be lower than ground-floor or mezzanine investments but the risk profile is considerably lower. Jason Calacanis piped up from the audience and noted that companies seems to be able to offer better deals than VCs, as his own buyout attests. Dennis noted that high net worth investors are generally unwilling to have the patience required to put down money for the roll-up-the-sleeves work required to work with young visionaries - especially when the exit money may be hard to define attractively.

Long story short, deals are still made up of investors willing to buy into a vision and to make those visions hold up to concrete expectations. May the multiples be rich and the payoffs in line with expectations.

David Kirkpatrick of Fortune interviewed Jim Buckmaster, trying to get to the bottom of a company that could in theory be a $500 million company if they thought that it may be worth being that. "Why NOT make money with it?," David asked. Jim pointed out that it is in fact a very healthy business for several years and yet still feel that they are making a difference in the world without pursuing "insane wealth" - avoiding bodyguards, etc. Refreshing, to be sure, but also indicative of how everyday user-publishers can make a decent living: in some ways Craigslist is the classic small business grown up but that decided to "stay in the family" rather than go public. Jim sees the Web as offering new opportunities for newspapers, so he's not ready to write off journalism with or without the classified ad revenues that have supported them until recently. 90 percent of classified revenues are still in print, Jim notes, but not surprisingly sees online taking a larger share.

David tried to poke out some "what should newspapers do" dialogue out of Jim, but he's content to just focus on his users. "Sounds kind of wild, I know," he notes, but he has a very focused model that works, so why not? Instead of telling papers what to do, he works with advertisers who are willing to pay for premium services, gets feedback from users who flag inaccuracies and problems via an automated voting system a la eBay. eBay now owns 25 percent of Craigslist, so those kinds of synergies seem to be there, especially with ideas on consumer protection. But Jim sees eBay focusing on long-distance transactions requiring services such as PayPal, whereas Craigslist focuses on encouraging shoppers to know the person you're dealing with on the other side of a listing. Just because The New Aggregation allows new suppliers such as Craigslist to monetize specific sections of today's newspapers doesn't mean that journalism won't have new revenue streams to pay for their skills: it just means that their employers need to flow their investment into more services related to the unique content that they can manage best.

David noted a report that had Craigslist may have taken as much as USD 50 million out of the San Francisco classifieds marketplace, and Jim noted that Craigslist may have more traffic on job postings than Monster.com and Careerbuilder.com combines. So even as paper publishers feel a bite out of their side traditional online database publishers need to adjust to the power of databases that give users more of a sense of control and community. Needless to say Jim doesn't seem to feel that competition is much worth thinking about at this point, especially since his traffic grew by 200 percent last year. "Maybe if that goes down to 100 percent growth we'll think about it," Jim notes. The demographics of users are continuing to trend to expand into older audiences out of its original youth following, so there's good reason to think that the growth will continue for some time. The scraping of robots is blocked regularly to keep traffic loads reasonable for user access, but Jim sees scrapers as offering "sub-par reasons for accessing Craigslist.

"Focus on your users and blot everything else - I don't know a better strategy than that," Jim notes. A question from the audience asked about more features that users ask for, but he's not trying to be on the bleeding edge of technology. They start at the top of the user request list and work down from there. It's still mostly open source AJAX/LAMP technology, with just a smattering of specialized tools for firewalling and such, and still about 18 people driving things. Since he's not trying to maximize revenues it's not necessary to hire in sales staffs and other traditional cost factors: the efficiency of the technology and the brilliance of the basic ideas carries the day. This may not appeal to the "Gold Rushers" chasing Web 2.0 revenues, but nobody seems to leave. The gold is indeed in ideas such as Craigslist, but it seems to accrue pretty efficiently when you think less about gold and more about people with the right idea in hand.

A commuter grabs his favorite sections of a stack of local papers and takes them on the train to read: the unbundling concept has been with us for a long time, but with online content the economic impact of this concept is beginning to take hold. Neil Budde, General Manager of Yahoo! News, outlined a world in which users in control of their content choices is sending news publishers "through the looking glass into the users' world." It's an environment in which the bits are easily assembled at a very fine level for users via portals and tools such as search engines and RSS feeds, but also one in which the monetization models are not yet up to snuff. Neil gave as one graphic example the closing of a newspaper in Hazard, Kentucky, a town near the coal belt that is as of late in the headlines due to mining accidents. The need for quality coverage is there, but the economics of existing news content bundles no longer support this coverage in many instances. Users define their news bundles today just as kids rip and download "party mixes" of favorite songs via tools such as del-icio.us, digg, and Newsvine. The news industry is beginning to "get" that news bundling has been blown to bits, but they're still struggling with how to be effective bundlers in an online environment. Players such as Yahoo are well placed to take an agnostic approach to news aggregation and allow the bits to have highly contextualized advertising for specific audiences across their favorite bits. Where this leaves traditional news companies is still very much an open question, but Neil did underscore Yahoo's news development does not put them in competition with their channel partners (not). Yahoo will be one of the big winners in this evolving environment, and for that very reason news organizations need to think also about more neutral channels for distributing their bits that can lead to the highest margins possible. This will be an exciting year in news aggregation, and tools and deals being developed by Yahoo will be a key part of that excitement.