Sunday, May 24, 2009

“Blogola” – FTC to go after paid blogs

Defining a new Social Media Contract
[More on story reported in BusinessWeek]

It’s about time that we got real with the Social Media world. If you have an audience and you want to pay off your rent/mortgage/student loan/Tesla Roadster, you’re going to have to confront the issue of getting paid for your blogs.

Companies will offer them to you – generally in the form of goods – but sometimes cash. So why shouldn’t you take it. I don’t have a problem with it although most Social Media orgs do.

My only issue is transparency – if you’re getting paid, let me know. Not only that, but what is the level of sponsorship? Are they giving you stuff or money and is it your unfettered, if perhaps biased impression? Or do they have the final word or feeding you the talking points? There’s quite a difference and an industry symbol cold clear that up in a heartbeat.

Like advertising, once the public realized that ads underwrote their newspapers and TV, they accepted it – it was a social contract. We clearly need the same thing here – and business will take off.

Since the Social Media community couldn’t develop its own Social Contract, it appears that the FTC will take a crack at it. Hope it works……

[iBreakfast’s March Social Media Report Anticipated FTC Action on Blogola]

Wednesday, May 20, 2009

Social Media Report Anticipated FTC Action on "Blogola"

iBreakfast’s March Social Media Report Anticipated FTC Action on Blogola

According to the FTC in a story reported in BusinessWeek, bloggers who get paid for mentioning products – sometimes known as Blogola – will become subject to their scrutiny.

For those of you who took the time to attend or read the iBreakfast’s Social Media Council Report, you’ll know that not only did we discuss this issue, but we described its resolution as an essential part of the Social Media Economy – providing of course, that it was transparent.

More than that, there are various degrees of blogola – from free product usage to our right payment and control over the actual content - and we should be able to rate that so the reader knows.

The main point is that if we establish an open, transparent system, we help everyone. But someone has to establish the ground rules and they have to be implemented.

My guess is that we’d all hate the FTC to be the ones to do this (just look how hard the banks are trying to pay off the TARP so they can get the government off their backs). But can we, as an industry, do it ourselves? WOMMA and Blog Council have guidelines but who really

Share your thoughts with us – maybe we’ll be the ones to take on this quixotic effort!

Monday, May 4, 2009

iBreakfast/LA report: Social Media Invades Hollywood

Jayson Dinsmore, NBC Universal · Cristian Cussen, MySpace Video · Allison Dollar , ITA · Kevin Chou, Watercooler, Inc.

Social Media Invades Hollywood. This event was sold out thanks to great speakers from MySpace (Christian Cussen), NBC Universal (Jason Dinsmore), ning and Watercooler (Kevin Chou) plus a cameo appearance by a child star Aria Wallace from Niceklodeon. Social media is having a great impact in managing the fan base for shows and in developing the career of individual talents. Most significantly, both MySpace and NBC a re suing social media to develop shows both in generating ideas, tsting them and then building buzz. MySpace has developed custom concerts and NBC has synergized well with reality TV shows.

Click for the full report

Alternate Funding Conference report

Todd Walters, Loanio
David Feldman, Feldman Weinstein & Smith
Lawrence Langs, iBusiness Partners
Dana Stetson, The Receivables Exchange

How do you access capital in these very trying times? VCs and Angels still have money but unless you are a successful serial entrepreneur or are prepared for ridiculously low valuations and high equity giveaways you may want to hold on to your business plan. Likewise, banks are tighter than Fort Knox, so unless you don't need their money and your credit is too good to be true, you might not want to bother. That seems leaves a few choices other than rich Uncle Joe, assuming he kept his money out of the market.

So, in this half-day conference we looked at some of the near and long-term solutions to this problem. If you are a company with receivables - purchase orders from creditworthy companies - then factoring is the shortest way to raise money. However, the rates are legally usurious - up to 38% APR. But with the internet, a company like The Receivables Exchange has opened your receivables up for auctioning and could theoretically lower that rate by half or more.

For those who need smaller loans - under $25,000 - then you could have used crowdfunding with sites like Loanio, Prosper etc. At least you could have until November of last year. That's when the SEC, probably reeling from its criticisms over poor market regulation and overlooking the Madoff's $50bn scam, stumbled upon the one true threat to the banking system - the online aggregators of people to people loans backed by little more than good credit scores. This $100 million industry worth say, one grommet on the "Tarp" was determined to be in the business of selling securities, so they shut them down pending new filings. The solution appears to be some legalistic maneuver of repackaging the loans as bonds and so on. Nevertheless this type of funding will in likelihood return and probably become increasingly available to small business.

One side benefit is that Loanio found that it could go public by self-registering, which is way to dramatically lower their underwriting cost. This leads us to the closing presentation by reverse merger guru David Feldman and iBusinessPartner Larry Langs who specializing in taking companies public through so-called sell deals - i.e. using a defunct public company shells to go public instantly (the stock exchange used this technique itself when it went public!). This is a great idea if you can attract investor money - especially when the market recovers. The only downside is the high cost of quarterly filings.

Then again with the internet, those costs could come down.

April Report: Google & the Future of Newspapers

Gordon Crovitz, Journalism Online · Stephen Arnold, Arnold IT
Myles Fuchs, Pressmart
· Jeff Bogart, Bogart Communications ·
Mo Krochmal, Hofstra University

by Alan Brody

This breakfast came at a critical juncture in the Newspaper industry - Seattle, Chicago and now, Boston face the possibility of losing newspapers. So what has happened and where are we going?

It was no small irony that the headlines of the day trumpeted the "Craigslist Killer" - the med student who found his victims on the classifieds site - because in many ways, Craigslist, by undercutting the formerly profitable newspaper classifieds sections (by some $64 million in one year in San Francisco) became the Jack the Ripper of the newspaper world.

The other big player in the newspaaer world is Google - but whether they are the Jekyll or the Hyde is no small debate.

According to Google's Eric Schmidt, Newspapers did a great Act 1 in the 90's by going online - but haven't come up with an Act 2. I couldn't agree more - what they did was to put print up on a screen and add search with a little feedback mechanism. But that is really what we used to call "shovelware." They took the content from an old media - print - and shoveled it onto a new medium - online.

(As a matter of disclosure, I have a dog in this race - a new publishing company called ViziPress that addresses this issue through visualized storytelling.......)

Over time what I believe happened is that online papers taught people they don't really need to pay for the print product, and then they learned that reading a paper online wasn't such fun either. But then, returning to print was now unwieldy and a huge time sucker. Ergo - newspapers actually trained their readers into becoming dissatisfied customers seeking their news elsewhere.

From a strictly viewing point of view - they need to find a way to tell stories that are more readable online - especially as we go to mobile. We also need information compression and that calls for way of telling stories conceptually.

(With ViziPress, by experimenting with semiotics, graphic novels and music we have developed a kind of visual "cliff notes" for business, non-fiction and entertainment. You be the judge!)

The presentations began with's Gordon Crovitz, a new venture backed by the legendary Steven Brill that hopes to gang the newspapers together and, in some ways, take on Google to overcome the "original sin" of giving away their stuff for free. Through subscriptions and the artful of use of "fremiums" (giving some stuff away and then charging for the more desirable parts) they believe the public can be encouraged to fork over again. It happed with iTunes vs. the pirate music sites and certainly, as former publisher of the Wall Street Journal, Crovitz has shown it can be done with a business newspaper.

But according to veteran Google analyst, Stephen Arnold, while that might work - assuming as in my analysis, the victim has already been dispatched (sorry about the metaphor, but that was the news of the day!), the better answer may just be in finding more ways to work with Google.

In Arnold's view, Google is a technologist with the world's biggest audience, finding ways of working with them and their various payment mechanisms (Adsense being the simplest) will probably enable you to do very well indeed. Fight them and they will incrementally swallow you because the news flows to them anyway. In his view, their ability to bring all data types - the video and pictures as well text along with fantastically big audience are unstoppable and their way to aggregate advertisers and buyers is not to be ignored either. Message to publishers, if Google doesn't call you, call them. You'll be glad you did!

Myles Fuchs at PressSmart offered another view which is that by using multiple digital delivery systems, his company can monetize whatever content newspapers already have. This is particularly the case in the one healthy area of the newspaper economy: hyperlocal news. Jeff Bogart agreed, noting that his local town blog outdistanced the big area newspaper in terms of true local coverage - events, town hall meetings etc. Interestingly, locals may have survived since most local newspapers stayed behind the technology curve, so their resistance made them a subscription necessity when everything went online for free. But again, according to Bogart, his success with aggregating local bloggers could also undermine that sanctuary - it only takes one local news blog aggregator and the local papers will be staring down the same storm the big city papers are facing.

Finally, Mo Krochmal a former journalist turned J-School professor at Adelphi talked about what he teaches his students. If, like me, you are about to fork over $160,000 for a fancy degree for one of your kids you might want to reflect a moment. According to Krochmal, as long as the students are comfortable with the fact that no fancy job awaits with a corner cubicle and networked computer, that they understand the reporting fundamentals and can blog well then, with a little entrepreneurship they should be happy. They might not make rent but they'll be happy.

Download presentations.
See other reports on Steve Arnold's blog.