October 2013

Demand Media's eHow Learns Hard Lessons

When Demand Media went public in early 2011, rising to an early valuation of over $2 billion, traffic to its "how-to" website eHow was soaring. Demand's business model of creating content to answer search queries posed by Web surfers seemed to have legs. But the strategy began to fall apart within months of the initial public offering as Google introduced changes to its search algorithms to weed out content its computers showed wasn't what searchers sought.

EHow, a major source of ad revenue, saw its traffic plunge from a high of 70.5 million unique US visitors in March 2011 to 46.3 million in September 2013, according to comScore. The challenges facing Demand were highlighted when Chairman and Chief Executive Richard Rosenblatt, a co-founder of the company, resigned abruptly. He'll be succeeded as CEO on an interim basis by Shawn Colo, another co-founder, as the company searches for a permanent successor.

In Life And Especially Death, JFK Changed TV

It's a measure of how long ago President John F. Kennedy died that, at the time, television was described as a young medium. With the shooting in Dallas, TV grew up. Coverage that November weekend 50 years ago signaled, at last, that television could fulfill its grand promise.

It could be "more than wires and lights in a box," in the words of newsman Edward R. Murrow, and not just the "vast wasteland" that Federal Communications Commission Chairman Newton Minow had branded it just two years before. Rising to an unprecedented challenge, television could perform an incalculable public service. It could hold the country together: Americans convened in a video vigil, gathering before an electronic hearth. Nonstop broadcasts by America's three networks provided a sense of unity, a chance to grieve together, a startling closeness to distant events. And television, exhaustively chronicling the murder, memorial and burial, gave viewers the final scenes of a political career ushered in almost in tandem with the video age. In life and especially in death, John F. Kennedy changed television forever.

Mark Zuckerberg Starts Spending His Billion-Dollar Charitable Fund

Since donating 18 million shares of the company’s stock to the Silicon Valley Community Foundation in December 2012, co-founder and chief executive of Facebook Mark Zuckerberg and his wife, Priscilla Chan, have been very quiet about how he intends to spread the money around. Now, the billionaire couple is focusing the attention and monetary support of their foundation fund, valued at nearly $500 million, on the hot topic of immigration reform through Fwd.us, the immigration advocacy group that he helped to start.

A Massachusetts start-up called Panorama Education plans to announce that Zuckerberg, through his foundation Startup: Education, will co-lead a $4 million round of seed funding to help the company expand its business. Panorama uses surveys of teachers, parents, students and staff to give school districts feedback about various issues and says it is currently working with more than 4,000 schools. Zuckerberg has also begun distributing some of the newer fund through other nonprofits focused on technology in education.

Why Disney Briefly Weighed Selling ABC Stations

Even as major broadcasters fight Aereo in court, some have also pondered another way to fight the video streaming service -- by converting to a cable network. Chase Carey, chief operating officer of Fox network’s parent Twenty-First Century Fox publicly flagged that possibility last spring. Less well known is that ABC network’s parent Walt Disney privately considered a similar move for ABC around the same time, say people familiar with the situation. That idea was one of many options considered as part of a strategic review “fire drill,” the people said. These included whether to sell ABC’s owned and operated TV stations while keeping the network, one of the people said, an idea that dovetails with converting ABC to a cable channel.

The astounding rise of ‘search engines’ and ‘social media,’ in 3 charts

Google Ngram, the tool that lets you chart the relative frequency of words as they appear in English and foreign literature over time, has now added support for wildcard searches. This means you can plug in a search for "bar *" and conceivably get results not just for "bar stool" but also phrases like "bar exam" and "bar none." In a moment of meta-ness, I searched for "search *_NOUN" — which will return only phrases with the word "search" followed by a noun. I expected the phrase "search engine" to appear somewhere in the results, but not nearly as prominently as it actually did. But “google search” seems to have risen above “search engine” in keyword frequency in recent years, according to the Ngram results.

House committee to debate future of FTC

The four current members of the Federal Trade Commission will testify at a hearing being held by the House Commerce subcommittee on Trade. The hearing -- entitled “The FTC at 100: Where Do We Go from Here?” -- will examine the competition and consumer protection agency’s mission, budget and authority as it enters its second century. In its consumer protection capacity, the FTC deals with online privacy and data security. On the competition side, some say the agency should play a larger role in the net neutrality debate. The FTC is currently evenly split between party lines while it waits for the Senate confirmation of former Department of Justice attorney Terrell McSweeny, a Democrat, as a commissioner.

Netflix Poised to Pass HBO in Paid US Subscribers

Netflix is poised to pass HBO in paid US subscribers, showing Chief Executive Officer Reed Hastings is making progress toward a goal of transforming the streaming service to a Web-based television network.

The company probably reached 30 million paying US customers as of Sept. 30, according to Needham. HBO, Time Warner’s premium cable-TV network, has about 28.7 million, according to researcher SNL Kagan. To fuel more growth, Netflix is looking to bring its Web-based service to cable-TV systems. Cable providers are starting to see the $8-a-month subscription as an asset, and some are working to integrate Netflix with traditional programming. “Consumers are probably going to come to see Netflix as being more valuable than other networks,” said Tony Wible, an analyst at Janney Capital Markets.

Fox Investors Excluding Murdoch Back Job Split by 3-1 Margin

21st Century Fox investors not affiliated with Rupert Murdoch and his family supported a proposal to create an independent chairman of the film and television company by about a 2-1 margin.

Shareholders representing almost 147 million Class B voting shares backed the plan, according to a filing by New York-based Fox after the company’s annual meeting in Los Angeles. Votes opposing totaled 361.7 million, including about 280 million cast by Murdoch, 82, and his family trust. “The level of family control -- Murdoch owns 40 percent of voting shares -- and the dual-class share structure which denies voting rights to Class A shareholders, were engineered to keep power in the hands of Murdoch,” said Julie Tanner of Christian Brothers Investment Services. “While it is virtually impossible for a shareholder resolution to ‘pass,’ a high vote result should send a clear signal to the board that change is needed.”

Can Artsy make fine art as accessible as luxury fashion?

Are you familiar with the canvases of Oscar Murillo? Or the ceramics of Jun Kaneko? Unless you travel in the rarefied circles of the art world, probably not. But a New York startup hatched in a Princeton dorm room wants to use technology to bring the artifacts of the elite to everyone else.

Launched in 2010, Artsy is part of a relatively new crop of startups trying to bring the traditional art world into the digital 21st century with a website and mobile app for connecting galleries and artists with collectors and consultants. Over the past couple of years, the startup has built up a searchable database of more than 50,000 artworks from more than 11,000 artists. But it’s also gone a step further: through its Art Genome Project (much like Pandora’s music genome project), computer scientists and art historians analyze each piece of artwork and artist in its database and assign it a set of “genes” that denote everything from a historical period and location of origin to a work’s image quality and category.

Connected TV points the way forward for the Internet of things

[Commentary] Everyone from industrial giants to bootstrapped companies on Kickstarter are talking about the promise of the Internet of things to improve our lives. But how will the connected home make the jump from a favorite toy of the tech elite or a status symbol of the wealthy to be a ubiquitous technology that reaches the broad mass market of consumers?

As usual, history offers some valuable lessons. In fact, we only have to go back a few years and look at how the connected TV market took shape to get a sneak peek of what will soon unfold for the connected home. Today, the majority of these devices on the market have some form of connected TV capability, driven by well-known services like Netflix, Pandora and YouTube. In order for the Internet of things – or even the connected home itself – to reach the mainstream like connected TV before it, today’s participants must learn from the past. While Boxee’s product was rightly a favorite of the tech elite, it was inaccessible to the mainstream consumer due to a lack of retail distribution and more importantly, a content strategy that bucked the way the media industry worked. As a result, retailers and content providers that could have been active promoters had their underlying business models threatened, and as a result, pushed other solutions.

Benton

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