As the traditional media world is being hacked to tiny pieces by the Internet, Pierre Omidyar, that guy who harnessed the Web so powerfully, says he's founding a for-profit news service in Hawaii that will be staffed with, gulp, professional reporters.

Omidyar's pr person Sarah Steven says that Omidyar's motivation is simple: He's seen the decline of the industry and believes that a strong democracy needs a strong media to help keep citizens informed and involved.

The facts: Omidyar will be directly involved, not just an investor. The service is expected to launch late in the first quarter of 2010 or in the beginning of the second. It will be online only. The venture is based in Hawaii because that's where Omidyar has lived for nearly 3 years. Steven says there aren't any plans to expand right now.

The fascination: For one thing, this is someone who gets the Web and who has done a lot with citizen journalism. He backed Backfence and Bayosphere, two high profile early pioneers in citizen journalism that both failed. Clearly he hasn't given up on that, given how he talks about it in his blog post. But he also believes that you can't just leave the future of media up to the grassroots forces or the blog ventures that are shaping news online right now. Clearly he feels like journalism needs more help.

Just as important, he's convinced there's a business model for news. Goodness knows, for that reason alone, his venture is one to watch.

Here's a vision I wrote last week for BusinessWeek. From my point of view, the key question for Josh and his bosses (Norman Pearlstine and Matthew Winkler) is whether they're interested in gaining a readership "outside of" business. Based on what I've been hearing, I doubt it.

I would like the magazine to become not only required reading, but also a source of pleasure, for the most curious and intelligent people on earth, inside and outside of business.

I took 6 months off for maternity leave. I decided that during that time, I'd stay away from work and focus on my daughter Lilly. And what that meant for me was staying away from blogging and Twitter. I was at the computer about to do some Twittering a few weeks after my daughter was born, but I couldn't type anything in. It didn't feel right to me, though I've done personal tweets before. I realized that my digital persona feels inextricably wrapped up in Businessweek. That there was a real distinction between what was appropriate and what wasn't. Or actually, what people who signed up to follow me would expect. And it felt like it should mostly be things from an official BW person, not a majority of things from Lilly's mom.

I know folks like Fred Wilson have split up where they write about their personal lives and where they write about their professional ones. And I guess I did that as well in a defacto way. Since I'd made the conscious decision not to think about work while I was on maternity leave, the follow on decision was to let my tweets and blog posts go silent. Breaking that silence now feels liberating in a way I hadn't expected. I'm happy to be back on the blog, happy to start thinking about tech in a reporterly way again.

I also think this new dashboard will help Google get a better look at each one of us. Here's why. Last summer, I was having a not-for-attribution chat with a senior Google official. I asked him what Google knew about me. He told me that within Google's data centers, there were gazillions of data bits about all of the company's users, their searches, click, emails, YouTube uploads, etc. But he said it would be loads of work to bring all of this data together and build individual profiles. What's more, it would require lots of computing, and there wasn't a clear business model for it.

UPDATE: JUST GOT THIS CLARIFICATION FROM GOOGLE:

Its not an individual profile of the different products and doesn't correlate the data. Instead, the Dashboard was designed to scan the different products and services you use for a summary of the user data they each store individually. The Dashboard does not access raw data from the services, does not correlate any cross services data and it does not collect or store any additional user data. And when refreshing or closing your Dashboard page, all data is removed from the Dashboard.

But now, there appears to be a model. To address privacy concerns, Google appears to be bringing together much of that data. And once they have it, they're much closer to a coherent look at each one of us. Perhaps there's still not a business model for such personalized data. It'll be a while before advertisers can come up with 500 million customized pitches. But who knows what correlations Google will find between our various activities. (NOTE: Google says none.) And if this dashboard generates trust, the pickings should grow even richer.
(cross-posted on TheNumerati.net)

I didn't want to spend money, so I went to a far tamer site, FastFollowers.com. It functions as a sort of Lonely Hearts Club for Twitterers. Every time you follow a person, you get a point. You give the points back when people follow you. So, if you have lots of patience (I don't), you follow thousands of people, and eventually thousands follow you. (You can take a shortcut by simply buying credits, 5,000 of them for $99.50.)

I set up a new Twitter account which now has 208 followers. (I'll keep it secluded, for now, in my little laboratory. I want it to remain a purely FastFollower beast.)

Those 208 people "follow" me. They appear to pay no attention to my Tweets. They don't respond when I send them @ messages. They're too busy branding themselves to their followers, including me, to listen. Their only communication is spam in my direct-mailbox. Example:

martinbastin
Wishing you health and happiness....I look forward to Tweeting with you....for FREE marketing information check out my blog at http://bit.ly/4OyKe

It would be easy to write off all the people on FastFollower as spammers. But it doesn't appear to be the case. Some are actually sharing observations and links. But they want a crowd.

Why is this? Could it be that having 10,000 Twitter followers gives people the social media version of a face lift? Does it make them more employable? Open doors? All I know is that people are willing to pay for it, and they're not all spammers.

Here's the idea: Enterprise 2.0 is a rage. C-suite execs are hearing non-stop that their competitiveness, agility, innovation, and ability to attract top brainpower hinge on their effective adoption of new social tools and practices. We all know the words. (We've written many of them ourselves.) Transparency. Break down the silos. Conversations. Market research on Twitter. Wikified research.

This boom is attracting hordes of consultants and software entrepreneurs. Many, no doubt, offer valuable advice. But it's a new domain, very short on best practices and metrics. Who's an expert? Opportunities abound for poseurs.

So, what's going on? How can you spot a legit player? Is there any common advice that just doesn't make sense for certain types of companies? Are there bogus metrics? (Twitter followers, perhaps?) Smart ones?

One more question: In Enterprise 2.0, where the community delivers intelligence, answers questions, and solves problems, shouldn't much of this type of consulting be... free? Isn't it weirdly old-school to pay thousands of dollars a day for this type of advice?

I could use all the suggestions you have. I'll be carrying out the research on this blog, and publishing some of what I learn along the way. Thanks.

A preferable model for corporate relationships, he says, is Twitter, where people lend their attention, not necessarily their friendship. In SocialText's Twitter-like corporate offering, Signals, more people are likely to "follow" the CEO--assuming he or she has anything interesting to Tweet.

Lee, who stopped by our offices this afternoon, also had thoughts about enterprise search. Here's the kind of question people ask each other in companies. "You know that slide of the chart with the curve that makes that double-dip?" And answers, Lee says, are almost impossible to find on search engines.

Studies indicate, he says, that knowledge industry workers spend the equivalent of one day per week searching for people or information. Often, the key is to find "the person who knows the person who knows the answer."

Of course Lee's betting that companies will harness social tools to find that information and make workers more productive. The only problem, from my perspective: Sometimes questions are dumb, and it's less embarrassing for employees to pound away on Google and desktop search...

Here's what we heard: Bloomberg, which sells its "box" for $20,000 a year, is swimming in money, unfettered by the grim advertising economy, immensely ambitious, and dedicated to becoming the leading power in financial and business news. Getting bought by such an outfit bodes well for many at BusinessWeek. While restructuring and layoffs are inevitable at a magazine losing $1 million a week, Bloomberg ranks as the closest thing in journalism these days to a safe home.

Still, I'm trying to think ahead 10 years and wondering about the future of Bloomberg's model. They have a proprietary technology platform in a world moving toward open standards. Their box has an interface that requires training courses--this in a global market where simple, intuitive systems rise to the top. These limitations haven't mattered to date, because Bloomberg holds a trump card: speedy and reliable data. Traders have plenty of incentive to pay for the boxes and figure out how to use them, because real-time data is a must. If their competitors get the news first, they lose. It's this dynamic which fuels the 300,000 (and counting) subscriptions for Bloomberg boxes.

How much can this market grow? To listen to Bloomberg execs, they make money from the boxes and invest that money in more news-gathering power, which makes the boxes even more attractive. It's a virtuous cycle which presumably leads to continuous growth. With BusinessWeek, Bloomberg hopes to extend its brand into the wider business audience, including c-suite executives, and open up further markets for their boxes.

I don't see it. In my experience, every continuous growth projection encounters some force that disrupts it.

Seems to me that for Bloomberg to reach wider business dominance, it must leverage the power of its box outside the box--finding a way to sell premium data services for a fraction of $20,000 a year on the Web. This will require far more than the virtuous cycle. The company, which a generation ago innovated with the box, will have to innovate again, developing a new business model. Of course, it doesn't hurt to have $6 billion in box revenue and and an immense news organization backing it up. But still, it will require establishing new and cheaper services that provide a dose of magic from the box, but without cannibalizing it.

The BusinessWeek acquisition may provide some of the missing pieces. Yet despite the ambitions expressed at yesterday's meeting, I'd bet that the magazine will end up serving largely as a promotional tool for the company. The real business will be online. That's where Bloomberg 2.0 will take shape.

(I postponed a flight to Colorado yesterday so that I could attend the meeting, and then I struggled to get a standby flight out here. By the way, I didn't hear one word at yesterday's meeting about how Bloomberg plans to use social media. If and when I get to meet the buyers, I'll be asking them that.)
(cross-posted on TheNumerati.net)

The sponsor of this study, a lead-generation company called Pontiflex, is eager to demonstrate that people who agree to receive mailings--those who "opt in"--make for valuable customers. Its technology enables marketers to gather opt-in information, including e-mail addresses (amended).

I wonder about the sophistication of the e-mailing public. I keep a Hotmail account for virtually all of my commercial dealings. Those relationships are quarantined from the rest of my online life, and I'd imagine that Hotmail address is worth next to nothing as a lead. Do you maintain similar accounts? What does that say about lead generation? Are those of us with multiple accounts still a minority? (cross-posted on TheNumerati.net)

I'm all for disclosure, but why should government busy itself with it? Seems to me that lots of bloggers already go to great lengths to make disclosures. In time, won't the public start doubting those who don't--and won't their reputations fall? Am I naive to think that peer pressure would work?

Of course, The FTC guidelines will only affect a fraction of bloggers--the ones who actually have relations with companies and get paid. They're the ones who most resemble mainstream media. For the vast majority of bloggers, the key currency in this economy is not money, but links. People sell influence by linking, and often getting paid in kind. It's in link love, far more than free goodies, that mutual backscratching is endemic.

Adam points to David Armano and Peter Kim, who are concerned about the same issue. Armano writes:

Bottom line, there's unfortunately a short term business model for hucksters out to make a buck at your expense. That's because the field is still young and there isn't much that's been established—it's a bit of a wild west scenerio. Which ironically is a period in time when the snake oil salesmen thrived.

The trouble is this: We're not talking about hard sciences, or even the data analysis of the Numerati. This is social, which is extremely difficult to measure and lends itself to BS. You could have a so-called snake oil salesman who turns out to be smart, figures out the needs of the clients and offers good, albeit familiar, advice.

Adam asks if a social media "sheriff" is needed. Fact is, the customers are vulnerable in part because they haven't mastered these very tools, from blog search to LinkedIn, to carry out due diligence on consultants. It's just a matter of time before someone sets up a consultancy to vet the consultants. Maybe that's the shining opportunity in the field.

Do you see snake oil spreading in this field? (Cross-posted on TheNumerati.net)

A recent study by Nielsen Claritas indicates that the top third of lifestyle segments measured by the researcher relative to income were 25% more likely to use Facebook than the bottom third. Meanwhile, less-wealthy segments were 37% more likely to use MySpace.

MySpace popularized the concept of online social networking, and had relative success handing out free accounts and plastering them with ads. But this model does not appear to be sustainable; the unit of News Corp. which contains MySpace lost $363 million in the year ending June 30, and a rotating executive team is evidence that the business is attempting a turnaround. The youth and lack of spending power amongst its users is at least partly to blame for MySpace's decline -- so too is the downturn in online ad spending.

An international love affair with Facebook is also a culprit. Not only has the site -- started in a Harvard dorm room in 2004 -- won over many younger users of MySpace, it's introduced social networking to people in their 20s, 30s, 40s, and older. As the Nielsen Claritas study hints, these users have jobs and bank accounts, and might be willing to shell out a few bucks a month for what is becoming an increasingly valuable communication tool in their lives.

To subordinate our blogs and updates to the editorial dictates of our employer would work against our interests. It would even undermine the company, which stands to benefit from hosts of vocal and free-spirited brand ambassadors in the social Web. Yet the Washington Post, with its new social media guidelines, is attempting to corral every independent voice in its organization. I'm betting it won't work.

First, I should mention that lots of the points the Post editors make are on target. Journalists do represent their publication in their private lives. If a Post reporter were heard delivering a hateful tirade in a restaurant or screaming obscenities at a ball park, it would injure the reputation of the newspaper. The same holds true for journalists' behavior on Facebook or Twitter.

Usually, however, it's not so hard to represent both the company and personal brand, because they're closely aligned. Most journalists at the Post, I have no doubt, want to be perceived as intelligent, open-minded, and fair. That's in the paper's interest, too.

But the Post attempts to keep them from expressing opinions.

Post journalists must refrain from writing, tweeting or posting anything—including photographs or video—that could be perceived as reflecting political, racial, sexist, religious or other bias or favoritism that could be used to tarnish our journalistic credibility. This same caution should be used when joining, following or friending any person or organization online.

That is a bit much. In today's political environment, expressing concern about global warming, Stowe Boyd notes, could be used to show bias. Voicing any opinion about Israel or the Palestinians, sex scandals in the Senate, health insurers, you name it, would appear to be verboten.

It seems that the Post wants all the good stuff from blogs and social networks--extension of their brand, traffic to their site--but without any of the problems that come from losing control. Yet the power of these social tools grows from the very freedom of expression that the Post editors are trying to rein in.

With its strictures, the Post also wants to keep its editorial processes veiled.

Personal pages online are no place for the discussion of internal newsroom issues such as sourcing, reporting of stories, decisions to publish or not to publish, personnel matters and untoward personal or professional matters involving our colleagues. The same is true for opinions or information regarding any business activities of The Washington Post Company.

I would argue that an openness about their processes would inspire greater public trust. The fact is, serious operations like the Washington Post put lots of thought into how they cover stories, and they work much harder than many in public give them credit for to be thorough and fair. How far should reporters go in reporting on internal processes? Trust them to use their own judgment, and have discussions about it when they appear to go too far.

If BusinessWeek had rules like the Post's, I'd have been out of a job long ago. I've written in recent months about BW's lengthy editing process. Not everyone liked it. But Executive Editor Ellen Pollock, to her credit, came onto my blog and joined the discussion. I also wrote a fairly critical post about our parent company, McGraw-Hill. Again, it was a sensitive subject. It upset some people, and perhaps I crossed a line. But we talked about it, and I'll try to use my best judgment going forward. Here at BW it's our judgment, more than a formal list of do's and don'ts, that guides our behavior outside the magazine. I appreciate that.

People at Fair Isaac were excited. They didn't care about the $1 million. They just wanted to get their hands on all that data. It seemed to me that I had a window into a fascinating niche of the Numerati world.

Fast forward to this morning. I walk over the the sumptuous Four Season's Hotel, on E. 57th Street, where loads of journalists, including the Times and the Journal and AP, are squeezed into a ballroom for the announcement of the Netflix winners. My read: What seemed like a niche three years ago, the crunching of our behavioral data--the mathematical modeling of humanity--is now mainstream. They also announced that a second Netflix prize will soon be announced. Here's my account on BusinessWeek.com.

I called up Darren Vengroff. He's the chief scientist at RichRelevance, a recommendation start-up I've written about before. He told me that the upcoming Netflix Prize II, which will include much more demographic detail, could lead to much more sophisticated analysis. For example, if the service knows that a certain user loves sci-fi and hates romantic movies, what should it do if one day he starts checking out When Harry Met Sally and Sleepless in Seattle? It might conclude, Vengroff suggests, that someone else is at his computer. Or perhaps he's preparing for company. By engaging dataminers around the globe, Netflix may soon be able to draw such conclusions.
(cross-posted on TheNumerati.net)

I am not one to denigrate Twitter. I use it, enjoy it, and wrote a piece more than a year ago entitled "Why Twitter Matters."

But think about this: Twitter is still hunting for revenue and a business model, and it's valued at $1 billion. BusinessWeek, even during a massive adverting recession, has estimated ad revenues this year of $80.5 million, a quarter of it from online. I have no idea how much McGraw-Hill will fetch for BW in the sale, which is supposed to conclude within weeks. But at least one estimate has been as low as $1.

To be fair, BW is losing as much as $60 million this year. And Twitter, conceivably, could continue to grow, becoming an enduring global platform for communication and search. But by the same logic that drives bottom-feeders like Wilbur Ross to buy companies like Bethlehem Steel, the gap between Twitter's valuation and BW's might well narrow.