Jason Calacanis's Most Recent Newsletter (for those that weren't able to subscribe)

As many of you know, Jason Calacanis recently threw in the blogging towel and decided to limit his conversations to 750 newsletter subscribers.  I know several people were not able to sign up for his newsletter (don’t even know if it’s still available), so I decided to put up his most recent one here.  I’m sure this is all part of his master plan to get other folks to spread the content for him but oh well.  I’m not going to share all of his newsletters, but the most recent one deals with mahalo, knol, and wikipedia.  I thought it was interesting so here it is:

Is Google a Content Company?

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For the past week, I’ve been fielding calls about Google’s new content

play, called Knol, “killing” Mahalo. Knol stands for “unit of

Knowledge” and it’s a very well-designed Wikipedia/Mahalo style

content publishing play. It’s very similar to the New York Times’

forgotten About.com, Seth Godin’s spam-filled Squidoo, the flawed but

fascinating Wikipedia, and of course my new project Mahalo.com

Four important point about Google Knol to put it in context:

1. Like Wikipedia, users create Wikipedia-style articles on Knol about

various topics.

2. Unlike Wikipedia, and very much like Squidoo, users can create

multiple pages on the same subject.

3. Authors can put Google’s advertising on these pages and make money.

4. Google is indexing these pages amazingly high in their search results.

This is a real change from last year when we launched Mahalo at the

WSJ D conference. At that point everyone asked us, after comparing our

superior search results (when we have one!) to Google’s, if we were

going to “kill” Google. Note: I would never engage that line of

thinking because I’ve always seen Google as the modern day operating

system, and our job to work within their framework.

Their operating system is search results, and About.com,

HowThingsWork.com, digg.com, NYTimes.com, Engadget.com, etc. are all

applications in that operating system. Our job is to create the best

possible products that operate–aka rank–as well as possible with

Google’s OS.

Why all the focus on death?

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The life of a startup CEO dealing with the rabid but sometime naive

blogosphere is one of extremes. You’re killing or you’re killed,

you’re the shinny new object or yesterday’s news. You can couple the

link-bait based blogosphere with main-stream media journalists who,

instead of acting like the voice of reason and “sticking to what got

them there,” have taken the link-baiting bait. The MSM has had to

incorporate the flame warring, rumor mongering and link-baiting ethos

in order to keep up in the page-view cold war.

This is either the shot in the arm MSM needs to compete, or they’re

chasing the blogosphere Thelma and Louise-style off a cliff. Time will

tell I suppose.

Anyway, Facebook has had crushing success while MySpace continues to

grow. Apple is hitting the ball out of the park while Microsoft

continues to set sales records while fumbling into various markets. If

Microsoft and Apple, MySpace and Facebook, and a Coke and Pepsi can’t

kill each other why is everyone obsessed with death?

Well, because Microsoft did kill Lotus, Netscape and thousands of

other software companies when they decided that the operating system

just wasn’t enough.

Knol: Google becomes a publisher

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Now, I want to believe David Eun, Google’s head of partnership, when

he says they are not in the content business. David was hired from

Time Warner to be the easy going, friendly face of Google to the

content players of the world in the heat of the dual disasters of

YouTube’s copyright problems and Google’s “we’re gonna scan your books

with or without your permission” absurdity.

Last year in an interview he said:

“The biggest misconception is that they (content companies) fear

Google has aspirations to become a media company, meaning that we

would produce and own content that would compete against theirs.

That’s a major misconception. We don’t produce our own content. In

fact, we see ourselves as a platform for our partners that do.”

On one level, I believe that the Google leadership does not want to be

in the content business, but I think they’ve diluted themselves into

an odd definition of what it means to be a content company.

Let’s run a test: what is the role of a content publisher?

1. Secure talent

2. Distribute their work

3. Monetize that work

4. Pay the content creator for their work

5. Build a library of that work for future monetization

So, if you’re the New York Times or Wall Street Journal you:

1. Hire John Markoff and Walt Mossberg (on staff)

2. Distribute their technology reportage

3. Sell advertising against that reportage

4. Pay Markoff and Mossberg

5. Create an archive on NYTIMES.com and WSJ.com of their work.

Let’s run Google’s Knol through this same process:

1. Hire writers (on contingency) — check

2. Distribute these pages in Google’s search results — check

3. Sell advertising against it in the form of AdSense — check

4. Pay the writers via AdSense split — check

5. Create an archive on Knol for future monetization — check

Any objective person would look at these two cases and say that the

only difference is that Google hires folks on a revenue split basis

and content companies pay people up front. Except of course, About.com

is paying folks partially on spec.

Google believes because they don’t own the content that they are not

in the content business. Nice try, but no, that’s not how it works. If

you pay writers, distribute their work, and create a library of their

work you are–in no uncertain terms–a publisher.

Google-dependent businesses

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There is a huge debate in the Valley today as to the value of

Google-dependant business. Many of the biggest and best companies

today have Google as their top source of traffic. Reportedly digg is

50% Google traffic, About.com 85%, and Wikipedia 70% Google traffic.

That means that people don’t go to these sites directly, as much as

they go to Google and do a search and click on their result.

This means Google makes money from you while you are on their search

results, but only makes money on the second click if the content

provider has put Google Adsense on their pages. Some do, many don’t.

It seems that Google, the greatest web-business ever created, is not

satisfied with owning over 70% of search–now they want to own the

first couple of pages in their search results. So, if you’re digg.com,

About.com, NYTimes.com, and Wikipedia you’re faced with not only being

traffic-dependant on Google, you’re now competing with them for the

traffic within their search result.

Ouch.

This feels exactly like what Microsoft did to its application vendors.

Microsoft convinced folks to build WordStar, WordPerfect, Lotus 1-2-3,

and Quattro Pro for their operating system. They grew that business

together until the point that Microsoft had massive market-share in

operating systems–then Microsoft pulled the rug out from under the

3rd party application vendors.

The result? The streets were littered with dead software companies,

Microsoft faced massive lawsuits, and the industry became stagnant

until the Internet shook things up again two decades later.

Are we facing the same thing on the web today?

Can we trust Google?

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I’ve got a lot of friends at Google, and I’ve worked with and defended

them for years. They’ve been an amazing partner to me. The revenue

from Google Adsense reached over one million a year for Weblogs, Inc.

when we were still a private company. The $4,000 a day we were making

paid our bloggers salaries and gave me the biggest win of my life.

In other words, I’m a “Google man.” I want to believe Google… I love

the Google. The Google has been, very, very good to me.

Now, Google says they will do no evil and since I’ve worked with their

team across three companies I tend to believe them. However, with the

launch of Google Knol I feel like they are not being totally up front

with us–their partners. It feels like they’ve stabbed us in the back

to be honest. I’m not the only one who feels this way–even if I’m the

only one stupid enough to say it.

If Google is going to be in the content business and compete for the

top ranking in the operating system they control why not be honest

about it? Why not have David Eun say, “listen, we’re experimenting

with content and we want you to be involved in it. Put your content in

Knol!”

Frankly, it’s insulting to say you’re not in the content business and

then launch Knol and compete with content companies for their authors,

users, and placement in the rankings that you control.

For the record, dishonesty falls under evil in my book. Intellectual

dishonesty? Well, that’s on the bubble as they say.

Cry babies or canaries in the coal mine?

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