The new news model (in black and white)

The news business has changed dramatically in the last 50 years, since the days of pioneer TV news broadcaster Edward Murrow, who delivered his segments with cigarette in hand and opened and closed his newscasts with his signature phrases: "This is CBS" and "Goodnight and good luck." In this smoking, black and white episode of Vator Box, we bring you back to those days (well, at least we try). And, who better to be our guest host than Chris Tolles, outspoken CEO of Topix, a local news site whose content is 85% user-generated with 125,000 comments posted daily. John Shinal, veteran journalist and Vator managing editor also joined us. Get two guys passionate about the imploding news business and you get a lot of fireworks and sideswipes.

In this episode we look at two companies - Intense Debate and NowPublic - changing the news paradigm, not so much for the companies themselves, but for their participating in ushering in those changes. Both companies are shaping the way individuals and society are interacting with one another and interpreting the world.

RockYou's Jia Shen: 'Hands down bigger than Slide'

In a world where marketers care more about engagement than passivity, RockYou, a top application maker on social networks, has a great shot at being the place to distribute ads to reach today's youths. The trick is innovating faster than RockYou's oft-mentioned rival, Slide, and building a bigger and better ad sales team. To that end, RockYou, which raised $35 million at a roughly $230 million valuation, plans to double its staff to 100 people by the end of this year, Jia Shen, RockYou's 28-year-old co-founder and CTO told me in this interview. 

RockYou, which makes popular applications such as Super Wall, is gunning to be a top five Web destination in the world. RockYou hopes this can be achieved as more Internet users browse and interact on the Web through a social context. 

It's not a modest goal, but it's something that’s not out of reach for this first-time entrepreneur and his team. Despite what some other publications say, RockYou is bigger than Slide across Facebook, Beebo, hi5, Friendster and Orkut, Jia says with confidence.

“We’re pretty much hands down bigger than them (Slide) on every statistic,” he said, referring to the number of applications installed and users engaged on Facebook. According to Jia, Super Wall – an application that lets you send photos, videos, and graffiti to friends – is the No. 1 application on Facebook. (Go to Vator.tv to read the rest.)

Video - the next acquisition for CBS?

CBS, which just recently swallowed up CNet for a cool $1.8 billion, is still on the prowl. That’s according to Mike Marquez, the head of mergers and acquisitions and business development for CBS Interactive. “We still are very active on the acquisition front,” said Mike, who stopped by the Vator studio in San Francisco for this interview, and to be our guest host in our upcoming Vator Box show. He and Quincy Smith, the President of the online division for CBS, are always looking for ways to “accelerate growth through external actions,” he said.
So, what is he looking for? In this interview, Mike seemed to emphasize "video” a lot. Is that video search, video ad networks, user-generated or produced video content? I asked? You'll have to watch to hear what he had to say. Go to Vator.tv for the rest of the story.


Seesmic expands video comments with Disqus

Pretty soon, video commenting will be a requisite feature on traditional media sites. And, Seesmic - in partnership with Disqus - hopes to be that underlying platform. 

Seesmic, a video Twitter with aspirations to be a 'worldwide talkshow in video, and Disqus, a hoster and aggregator of comments across blogs, are partnering in Seesmic's effort to be the video commenting platform across publishing sites. Disqus, a two-person team co-founded by Daniel Ha last year, hosts comments for 13,000 blogs, including my personal Bambi.blogs, as of yesterday. (Thanks Daniel for helping set that up on TypePad).   

It's a good partnership as Seesmic, which has $6 million in funding from some high-profile angels, like Ron Conway, seeks to ramp up its user base, which now stands at 15,000. As Seesmic CEO and founder Loic Le Meur will tell you himself, at this point, it's all about getting users, users, users! He's determined to reach 1 million, though he won't commit to a date he thinks he'll reach that milestone. (Watch Loic's Seesmic pitch in this video.) 

Given that the site is invite-only, once he opens it up officially in mid-June, I'm sure the adoption rate will accelerate, especially with partners like Disqus. By partnering with Disqus, all of Disqus members will automatically be part of Seesmic. That could be 100,000 new users immediately. Daniel says that he has an active commentator base of 100,000. An active user is someone who comments in the past seven days. Moreover, Disqus' approach to getting new users is pretty clever. Partner with the most active blogs that generate dialogue and claim users commenting as your own.

Read the rest of the article on Vator.tv

What Scott Banister looks for as an angel

f you're an angel investor, I bet you'd love to have Scott Banister's line-up of angel deals.

Scott is an investor in Facebook, Powerset, Hi-5, Zappos and Zivity - a company he co-founded with his wife Cyan and helped raise $7 million for. Zivity recently announced that it hired Jordan Ritter as is CTO. Ritter co-founded music-sharing site Napster. (Also watch my interview with Cyan and story about Zivity, titled: You know it when you see it.)

Scott is also best known for being a co-founder of IronPort, which he sold to Cisco Systems for $830 million last year, and being an early investor and Board member of PayPal, which was sold to eBay back in 2002. Apparently, Scott has made some good bets and has a solid circle of business relationships. To this end, what Scott thinks is a good investment and what he thinks of the current investing climate is worth listening to. "Things have slowed down," he said. "Anytime the financial markets get shaky, then people have a tendency to want to retreat to cash." Indeed, if you were an investor in Bear Stearns, I'm sure you would be feeling pretty strapped.

Zivity - You know it when you see it

Capturing the female body in an artistic form can be tricky. The subtlest of adjustments can move a piece from inspirational to offensive. The former attracts a female audience, the latter – more likely males. Zivity wants to attract both, raising questions as to whether men and women, when dealing with “art” that dallies in moral obscurity, really want the same thing.

Seems to me that there is a reason that men read Playboy, women read Cosmo, and men read Playgirl. Essentially, men tend to like photos that help them get right to point while women generally like photos to show them how to be beautiful. Plus, women like to spend a bit more time on the experience. Zivity may have its work cut out for itself trying to please both.

If Zivity slips to the wrong side of that fine line between smut and beauty, it risks losing the female audience. And, it'll be pretty obvious if it does slip. As Supreme Court justice Potter Stewart prophetically stated about obscenity vs. art “I know it when I see it.”

Zivity is a new experience oriented, subscription site for females to share risqué, provocative and sometimes nude photos. It’s attracted about 100 amateur female models, including Zivity’s founder Cyan Banister, as well as Bella Sioux and Doll (both can be seen in Zivity’s Vator profile). Many of the models bare it all, though Zivity keeps the ratio of nude to non-nude to 50%, said Cyan in her interview with me.

(Go to Vator.tv to read the entire piece.)

 

Slide's Levchin on self-expression 2.0, and engagement tricks

We’ve come a long way from scribbled x’s and o’s and characters that form little smiley faces. We’re even eons beyond e-cards from Blue Mountain, and yellow-faced emoticons. The current lingua franca of self-expression and communication is poking, nudging and winking. Slide is adding to this vocabulary with kicking, slapping, proposing, and throwing sheep - aka Superpoking. As Max Levchin, CEO and founder of Slide, said to me in this second-part interview, SuperPoke apps are “literary emoticons,” and basically the Hallmark Cards of this century. (Click here for the 1st part of our interview: How Slide plans to make a profit.

Slide is a social entertainment media company that’s attracted some 170 million unique visitors, sharing bits and pieces of themselves in a photo slide, or images with personalized graffiti. Think virtual scrapbooks gone haywire! But it's the SuperPoke (among other aimless apps) that's become one of Slide’s biggest viral applications, probably because of the simplicity of the action and mindset required. It doesn't take much thinking to fling a sheep when you're bored. 

On the San Francisco-based Slide platform, thousands of SuperPokes can often be measured in thousands-per-second. According to Max, more than 10,000 pokes were sent per second on Valentine's Day. And, McDonald’s wanted to run a campaign, called "Flip a burger with... " to connect people who may have flipped burgers together in their youth.

It’s a dizzying set of mind-boggling activities on the face of it. But the fact that people actively contact one another through such mindless sentiments shouldn’t surprise anyone. People – subconsciously or not - are constantly promoting themselves, or at the least, actively trying to be acknowledged. When I asked Max why people do what they do on Slide he said simply because they want to be noticed. “I’m really cool. In fact, I’m so cool, you should notice me and here’s my story,” he said, describing the motivation of his users. “That’s what we enable. At a very basic level, that’s what we help them do.”

Indeed, people want to be enabled to express themselves. And, it’s not that difficult these days to do so when you don’t have to handle the intricacies of editing tools and technology, such as a 35 mm camera (to the dismay of Eastman Kodak and Fuji Film).

In a recent Sanford Bernstein report, analyst Craig Moffett writes that the next major movie studio will be UGC – user-generated content.” He pointed to a recent eMarketer report that predicts “over the next 5 years, up to half of all Internet users will be posting their own movies, photographs, etc.”

Of course, quantity is one thing, quality is another. When you count up the plethora of post-its and scraps of mementos in your desk drawers, and add up the many digital images lost and forgotten in the gazillion digital cameras or phones you have, etc. – the inventory of personal production goes through the roof. Anyone can make a movie by fusing all these together. On social networks, the act of producing or creating is even more robust because of the simple nature of the creativity or contribution required.

As one person said to me the forms of expression online, particularly in social networks, are akin to modern-day bumper stickers, or personalized license plates. Indeed, as Max points out, the reason that 10% of Slide users create most of the content for the other 90% to view is that the content on Slide is easy to create. It’s a lot harder to create or add value to a Wikipedia article, he said. While 10% doesn't seem high, about 1% of the visitors to Wikipedia create two-thirds of the content. 

Why they stick around

Even more fascinating than how people express themselves is how that expression drives an audience. The phenomenon with applications made for social networks is their viral nature. Products couldn’t be viral unless they compelled and engaged people to take action and participate. To me that was the most interesting question I had for Max, after all, Slide - for all intents and purposes - was a lot like Film Loop back in 2005. They both had the same goal. One survived and one didn't. (Watch my interview with Max on lessons he's learned and why he thinks Slide won over Film Loop.) 

How do you keep people constantly engaged, given their fickle nature, and demands on their time?

As Max sees it, the lifespan of a social network is about 2.5 years. First Friendster ushered in this notion of a “social network,” giving way to MySpace and then Facebook. To this end, as far as he can tell, the stickiness of an application or network has more to do with the enablement of collaboration than it does with creation, paritucarly creation of a mere profile.

When friends or people contribute, they essentially create a new kind of shared experience, with much more meaning than the original piece of content on its own. That content is then enhanced to the point that the original creator and contributors cannot walk away with the same product. To this end, social networks consisting of profiles that live in isolation are of no value.  “The value of images dissipate quickly,” said Max.

Indeed, recently I moved to a new home, and realized that the boxes of sentimental “stuff” I used to collect is now mostly digital. For the past three years or so, my life has been pretty much documented online. And, there’s so much of it that I don’t really know, and more often than not, don’t care if I ever find it again. It can be stuck on a social network, or on a computer forever. Why - because I can create new memories.

But memories created with other contributions may be tougher to walk away from.

Content shelf-life aside, the bigger challenge for Max is convincing Madison Avenue that regardless of the shelf life of such content, the "activity" or engagement is worth being in front of. To this end, demonstrating that people will engage for several hours on mindless activities is as relevant as them tuning into a show. The trick is capturing that engagement and defining what is relevant engagement. According to Max, his team follows about 200 interactions, including how many people sign on as a "fan" for a widget.

It's a lot of data to capture, and certainly far more sophisticated than just counting up an audience of passive viewers. It's a lot of actions to capture, but maybe worth it.

No longer will x's and o's and smiley faces sent be just be a personal matter. Max is looking to monetize your feelings.

Vator Box opens the kimono (Zivity, 23andMe)

This week, the theme on Vator Box is transparency. We look at two women-started social networking sites that reveal who we are at some core level. The first one is Zivity, a $7-million-funded company that founder Cyan Banister describes in her video pitch as a beauty site that "sits at the intersection of MySpace, Playboy and American Idol and Playboy." This is not your mother's iVillage. We also looked at 23andMe, a personal genomics company with $10 million in funding from Genentech and Google, that hopes to create social networks around a person's haplotype. (Watch interview with 23andMe cofounder Linda Avey in 23andMe ushers in social 'DNA' networks.)

The high-profile startup lets people get access to their genetic information and learn their predispositions for health conditions, or get a better understanding of their ancestry and traits. Our guest host and Simon Cowell for this segment was Deva Hazarika, founder of enterprise software company ClearContext. Even though Deva applied 27 times and has been rejected for the Zivity beta program, he still gave worthwhile observations, like this one: "What we can do is use the genomic social network to get the early indicators of who's going to be able to be on Zivity later."

In all seriousness, the conversation around Zivity really zeroed in on whether the site - with 50% of all photos being in the nude - could maintain a level of integrity and standards around high-brow, tastefully-shot females. The jury is still out. To that end, it was unclear to us just how Zivity reaches its goal of having 100,000 subscribers paying $10 a month for a subscription. But one thing was agreed upon, it's pretty clear that most sites that show a little flesh are probably going to be popular businesses.

We then spent some time on 23andMe, one of the up-and-coming companies in the personal genomics field that competes with Navigenics. (Watch my interview with Navigenics CEO Mari Baker).

Even though we dove into the concerns around privacy and discrimination and health care, the big question for us was how much genetic testing improves people's health. Studies are mixed. One study on smokers conducted at Georgetown University Medical Center found that "giving smokers information about their genetic risk of lung cancer upped the motivation to quit -- but a year afterward, they were not more likely to quit smoking than people who received counseling," according to a Los Angeles Times article. Another study at Boston University tested people for Alzheimer's. According to the same article, people who were tested for high risk for Alzheimer's changed their behavior in favor of a healthier lifestyle, but it was unclear if that change in behavior could ultimately prevent the disease. We were mixed on the price point. Deva thought $1,000 was minimal for the information. Ezra and I were skeptical about whether that fee was low enough for the average person to pay. 

Overall, we liked both companies. 

Slide's Max Levchin on making money in social media

Social networking is undoubtedly a ubiquitous feature of our online lives. But whether these platforms can make a lot of money is a big question. To this end, the business models of widgets - Slide, Flixster, iLike, RockYou - built atop of these “social graphs” seem somewhat tenuous.

Max Levchin knows this all too well. He recently raised  $50 million for what many consider to be a widget company. That company – Slide – now has a market valuation of half-a-billion. With such a high bar, comes hard work. Max’s mission over the next year or two – besides continually finding more ways to iterate upon Slide’s popular SuperPoke -- is to get profitable. If Slide isn’t making money in a couple years, as Max puts it: “I’m really screwing it up.”

Before jumping into the “making money” question, first a refresher on what Slide is. Slide is a place where 18-to-34 year olds hang out and express themselves with photos and videos. It was only after Slide made an application on Facebook that it grew like a weed, much like the other popular Facebook apps, Flixster and iLike.

“So, how does Slide make money?” I asked, in this recent interview in the Vator studios.

Slide primarily makes money through advertising, though users also feel that to SuperPoke someone is worth paying some money for, said Max. SuperPoke is an offshoot of Facebook’s “poke” concept that allows someone to send another person a communication without actually communicating at all. Much like a poke in real life. It doesn’t mean anything. It just gets your attention. SuperPoke builds upon a poke by making the gestures more expressive, like a slap or hug, and adding icons. Think of SuperPokes as virtual Hallmark cards or fancier emoticons  - those fun yellow smiley faces on our IM. 

Max wouldn’t get too in-depth about the business model of Slide. But he did say that he needs to understand the world of Madison Avenue better. Indeed, he should. After all, without convincing Madison Ave. to consistently embrace new media companies like Slide, it may be difficult for Max to convince Wall Street that Slide is worth taking public. This exit - which is rather ambitiuous in this market-meltdown environment - is seemingly something Max is gunning for.

“It was a pretty zesty affair,” said Max to me in a recent interview in the Vator studios. Max was referring to the time PayPal, a company he co-founded, went public back in February 2002, and was sold within six months to eBay for $1.5 billion. "I wouldn't mind doing it again."

(Note: This is the first of a two-part series with Max Levchin. The next interview will be on the evolution of online expression).

Vator Box on voyeurism and brand control

We're back again with Drew Curtis of Fark.com fame. This time we looked at fast-growing FriendFeed, and the appetite for voyeurism and socially-produced content. We then look at Gorilla Spot, which lets consumers create video ad mashups. The company competes with MixerCast and Genius Rocket, and is part of the booming, video-ad-solutions industry drawing up-and-comers like ScanScout, BrightRoll, Digitalsmiths, VideoEgg for publishers, and HotPluto, Spotzer and Turnhere - video solutions for small businesses. advertising. Finally, we look at file-backup company Carbonite. It has nothing to do with the other two companies we looked. But it's a company with real revenue and a real value proposition. 

Let’s start with FriendFeed, an easy-to-use service that lets you see the content across the Web that your friends or people who randomly end up in your network are using. The content comes from services, like Twitter, Yahoo's Flickr, Netflix Queue and Google's YouTube. (Read and watch my interview and analysis of FriendFeed with Paul Buccheit, FriendFeed founder.)

Ezra Roizen – Vator Box regular guest – raised the point that it’s unclear what the demand is for other people’s “dribble,” though clearly it’s a fascination among those who Twitter and use Seesmic, a video Twitter.

Drew said that as a whole, socially-collected content and contributing commentary around them generate a lot of pageviews, but the “actual product sucks.” 

Indeed, FriendFeed’s traffic has exploded since March, according to Alexa. But much of the content shared (including some from yours truly) and comments offered belong on the editing floor, and definitely have a short lifespan. As Drew pointed out in a separate interview I had with him, of the 2,000 articles posted each day on Fark, only about 100 are deemed worthy of being showcased by the Fark moderators.

Now, Ezra did point out that there is value in creating “discussion around content” or a “shared experience.” I could not agree more. In a recent interview (to be published next week) with Slide CEO and founder Max Levchin, he tells me that the key to keeping fickle Web users glued to a particular product is to ensure that their content is mixed with other content that is not theirs.

In other words, a person can and will easily move his/her own scrapbook-like content from one social network to another. But if he/she cannot take the contributions of others, they’re more likely to stay put.

Indeed, I have had profiles on Tribe, Friendster, MySpace, and on social-activity sites, such as Kaboodle and Plum. I’ve not stuck around. I just moved onto the next site that lets me create a presence. There are no switching costs, besides lost photos (but given the abundance of such photos, I'm hardly emotionally attached to any digital content I've collected in the past. I'll just make new memories.)

But - to Max's and Ezra's point - in time, if my content mixed with others creates something even more valuable, and if I can’t take that finished or ongoing product with me, then I’d more likely stick around. Social-activity sites aren’t something to sneeze at. Soical-shopping site Kaboodle was purchased for $30 million by Hearst in August 2007. I remember when Kaboodle was valued at $9 million in 2006. (Full disclosure: Paul Buchheit is an investor in Vator.)

Speaking of mixed content, social sharing and mashups, Gorillaspot is a company that lets marketers involve their fans or customers in the promotion of products. In the Gorillaspot video pitch, you can see how Viacom’s Paramount Pictures used Gorillaspot to promote Sweeney Todd.  According to Athan Stephanopoulous, the company’s founder and CEO, those participating in the Sweeney Todd campaign spent an average of 30 minutes editing the movie trailer. I can definitely see this happening. Ezra's son Tanner spends about 30 minutes or more creating scrapbooks of Star Wars characters. I wouldn't doubt that the next step for him is editing an entire video.

But the challenge for such user-generated advertising services is getting marketers/advertisers comfortable with the unpredictable personal touches that can hurt brands. Advertisers are "scared to death," said Drew, who talked about a campaign he held on Fark. "You can't stop anyone from putting a big giant P.. (bleep)" on an ad, he said. "How do you get around that?" I asked.

"You don't," he responded. "It's a flawed concept."

The upshot is if consumers know that what they're viewing is a "derivative" product, a brand may not be tarnished regardless of the mixed content. You'll have to watch the video for our collective thoughts on user-generated ads.

Finally, we looked at Carbonite. Hands down, this company is worth taking a look at. It's not a cutting-edge,  sexy idea or business. But it makes money and it's growing fast.