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(Here’s Part 1)

You see, newspapers have tried to do online exactly what they did so well in print for hundreds of years – make money off ads. But it turns out that when people search on the Web (on Google or Yahoo or… ok, on Google) they might actually find some of the ads useful, and might click on them (Say you’re a Frenchman searching for hotels in India and see an ad for the Taj Green Cove in Kovalam. Magnifique!).

That’s not the case when you’re reading the news (or playing Mafia Wars on Facebook). Ads just don’t seem to work there because people aren’t *looking for anything* at that time. I’m reading the NYT’s coverage of Senator Ted Kennedy’s funeral, and right beside is a large ad for Bank of America’s business checking account. But of course – a business checking account! How did they know? That was exactly what I was thinking about as I read about Kennedy’s coffin being lowered into the grave.

The fact that advertisers have cut down their ad spend in trying economic times doesn’t help either. Oh, and Craigslist has lapped up pretty much all the online classifieds listings there are [1]. If you’re the newly-appointed head of Online Operations at any newspaper, your job is secure. Because no one else wants it. Online ad revenues at the New York Times have declined alarmingly in 2009 (and are dropping faster with each successive quarter).

Caught between a rock and a hard place, newspapers have begun to conclude that the only source of money they have is readers themselves. Rupert Murdoch, the owner of the Wall Street Journal (better known in India as the owner of the educative and respected STAR TV), has repeatedly said that making readers pay for consuming news online is the only way that newspapers can sustain themselves (another thing he’s repeatedly saying lately is “I told you so”.)

But not everyone agrees. The basic argument against pay walls is “good luck making people pay for stuff they’ve been getting for free for a decade”. Newspapers fear that becoming an all-paid site will drive people to professional blogs (such as the Huffington Post for example) that are far leaner and incur fewer costs than traditional newspapers.

Another argument is about linking. Hyperlinks to online newspaper articles from blogs, Twitter, Facebook and email drive a large number of people to news sites (“Did you hear about MJ?” “Yeah, I hear about it on Twitter; someone shared a CNN article about the news.”). Of course, no one will link to articles that can’t be read in the first place (driving traffic to the HuffPost and Politico instead).

Despite this, it looks like newspapers will go through a “paid walls” phase anyway with users being charged a fee per-article or per-month. But even then, newspaper publishers have this “the heart knows it but the mind accepts not” realization:

That in the future news may not need newspapers after all.

Next: So what will news need then?

[1] According to a February 2009 Hitwise report, “[a]mong the top 100 classifieds websites, all but three were localized sites for Craigslist”, which makes Craig a very happy man indeed.

Back at IIM Kozhikode, everyone had a subscription to a business newspaper (either the Economic Times, BusinessLine or Business Standard). You just had to have one, plopped every morning outside your door by the newspaper boy, where it would stay through the day, on top of yesterday’s copy, which lay on top of the day before’s, which lay on last week’s set, which…

The student populace at IIM Kozhikode was the most well informed and opinionated I’ve known, and yet no one read their morning business paper. The first lecture of the morning was spent behind laptop screens, on the Economic Times website and on moneycontrol.com. The true news junkies among them subscribed to email alerts from the same newspapers whose print editions lay in massive heaps outside their doors, unread.

Now imagine if nearly everyone you knew began consuming news this, way without bothering about print newspapers. And that’s what the newspaper industry in the United States is going through right now.

It’s worse in the US than at IIMK you know – fewer people are even buying newspapers, forget about them piling up outside American homes. Circulation fell over 7% in 2008. A click-happy population flocks to news websites instead, where the entire newspaper is typically available for free. If nothing else, the newspaper crisis has disproved the myth about Americans’ abysmal reading habits. The new myth is that Americans suddenly morph into voracious readers if you give them content for free.

Take the venerable New York Times. The newspaper that prints “all the news that’s fit to print” saw circulation drop 3.6% year-on-year but website traffic grow 6%. NYT’s web traffic is already at about 60% of its daily print circulation [1].

Americans have never had so many places to consume news – there are hundreds of newspaper websites and thousands of amateur and professional blogs, videos on YouTube and podcasts on iTunes – and they’re consuming with a vengeance. With typical glorious dysfunctional American excess, the computer is the first thing the population seems to turn to every morning. There are more people viewing more pages of news online with more ads than ever. So publishers and advertisers should be deliriously happy, right?

Well there’s just one small thing. They won’t click on the ads.

Next: Heck, why not?

[1] NYT’s daily print circulation on weekdays was 1,039,031 in March 2009, and its December 2008 web traffic was 18.2 million unique visitors, which is appx 587,100, or 60%.

Apple has had remarkable success doing what every other mobile phone company has failed at: getting non-techie users to install applications on their phones. By the dozen. The iPhone App Store stocks over 65000 apps and has sold over a billion of them. Some of the best-selling apps are paid ones, and almost every iPhone user has installed an app. Apple made tens of millions of dollars through app sales, but these apps have also strengthened the the iPhone brand and made it even more desirable. Every other mobile phone company now wants in on the applications rush and is scrambling to build its own application store (under different names).

But there are two essential parts to Apple’s success. And building an app store only addresses one part of it.

The first part is the App Store strategy (if done right), which is to make it drop-dead-easy for users to search and download (or buy) applications on their phone.

But Nokia, RIM, Microsoft, Google, Samsung, Palm and others need to also build excitement about the phone itself: that it’s an app-ready phone, that you should buy our phone because then you can do so many cool things with these apps. This is the critical second part, and it seems to be lost on everyone.

Nokia attempted something weakly similar with the N97 and its widgets. Nokia promoted the N97 as a widget-ready phone, advertised the widget-based experience and tried (badly) to demonstrate all the crazy stuff you could do with those widgets. If it had merely launched a (well-stocked) widget store without all the heavy phone-specific advertising, no one would’ve even bothered with them.

Apple executed this spectacularly well:
- The original iPhone had no support for apps and no apps available. It captured the early adopter market by virtue of its gee-whiz touchscreen interface and the great Internet experience.
- A year later when Apple launched the App Store, it launched the next iPhone (3G) along with it and promoted the phone as being App-ready. “What’s new about this iPhone?” “It can now run all these hundreds of applications that you can download or buy. Oh, almost forgot – it also does 3G.”

Now people see iPhone as the phone that runs all these thousands of apps. If Apple had instead launched the App Store in isolation, it probably wouldn’t have caught on so well. The device and its apps go together.

One final point: this works with Apple because it’s turned its disadvantage – a single phone – into a strength. If you have a whole product lineup – like RIM, Nokia, Microsoft – it’s hard to anoint any one phone (or all of them) as the App Phone.

Google released Google Desktop in 2005 and the web went abuzz with excitement. The Question That No One Had Asked had been answered: "Why does it take longer to search my hard drive than it does to search the web?"

Anyway, Microsoft and Yahoo! quickly responded with their own alternatives; Apple bundled Spotlight with the next OS X release. The Linux community was also working on Beagle. In the space of a year, having a desktop search product in your portfolio became a must (or else every startup that did have such a product would be ready to be crowned the Next You).

After that period there's been little innovation from a users' perspective. No one's heard anything at all about Yahoo's desktop search tool; Microsoft's been working on Windows Search tool without too much noise. And the last posts on the Google Desktop blog have been almost exclusively about one "featured gadget" after another for the sidebar.

It looks like it wasn't too hard a problem to solve after all. The technology for crawling and indexing large amounts of data, and then searching that index had existed for many years even in 2005, so building a desktop search tool wasn't so hard.

And beyond a point, Desktop Search isn't a very glamorous product either. It serves one single purpose – finding files (and content within files). And you can't make money off it (no really, try serving ads based on what you found deep in your users' folders).

Finally, today, it's all the rage to take your files from your desktop, put them online and share them. Email. Pictures. Videos. Documents. Playlists. The death of the desktop and the ascendancy of the "webtop" (or whatever) is in fact a favorite debate topic, since everyone's on the same side. Hardly the sort of time for desktop search to be in fashion. [1]

[1] Of course there's the Enterprise, where large amounts of data _are_ stored (and forgotten) on employees's computers, but there security an privacy concerns trump everything (A third party program is scanning all our employee's files! No wait, that's the anti-virus, so that's OK).

Over the past fortnight, the social media echo chamber has found three reasons to be up in arms about: Friendfeed’s acquisition by Facebook, the folding of URL shortener tr.im, and the Denial of Service attack on Twitter. Personalities have been apparently outraged, insulted, dismayed and betrayed. Yeah, betrayed by a startup. Imagine.

Most of the brouhaha seems to be about the lack of data ownership. More specifically, about the permanence of the conversations that these social media mavens were increasingly having over the web (and not so much about their online photos and documents). They lament that should a startup like Friendfeed fold, all the stuff they’ve shared, all their comments and likes, all their conversations with fellow Friendfeeders, indeed their entire network would disappear too.

And suggestions for action have included going back to the Age of the Blog (that is, centralizing all your content on a self-hosted server and hosting conversations there) and building distributed social applications (think Google Talk as opposed to Twitter.com and Friendfeed.com).

Of course, the vast majority – and I mean the overwhelming majority – of Internet users didn’t even know about these upheavals. (All right, the Twitter episode might have made its way onto the evening news, with parents turning to their kids with “What’s Twitter again?” and exasperated teenagers beginning, with a deep breath, “For the last time, it’s like this…”) Anyway, this majority doesn’t seem bothered by the prospect of not being able to preserve their conversations and shared stuff for posterity. They’re OK as long as they have email. And Yahoo! Messenger. And now Facebook. Some of them might have a Twitter account. Or one on Google Reader, or even Friendfeed. But if any or all of these new services were to disappear – poof – tomorrow, taking all their data along, Life As We Know It wouldn’t change.

Then why is the social media echo chamber in such a tizzy? What’s with all the frothing and “we can’t trust anyone anymore”ing?

Because for the average Web user, these social applications are distractions, entertainment or casual education. For social media mavens they are quasi-business. They are places where they build their brand, their standing, their reputation, where they gain their legitimacy.

They are influencers of opinion, and Twitter and Friendfeed are their pulpit. Their network is their audience. URL shorteners are how they direct their followers to what they deem noteworthy. No wonder they run contests to see who reaches the most followers and who makes it to the Suggested Users list. And that they get their favorite handles on every shiny new service.

For them, such applications must provide industrial-grade integrity, availability (and data portability). The founders of most social media applications, though, are just not at that stage yet. They’re merely testing new ways of sharing information and connecting users and figuring out how to define their newly popular application. Building a stable, always-on, scalable service that early on is a secondary priority. But social media mavens, by virtue of being early adopters, begin expecting this secondary priority too quickly for the founders to keep up.

Sometimes the startup infrastructure may be too weak to withstand even legitimate peak load. Sometimes the service might fold. Sometimes founders may decide to abandon their startup to take on similar challenges at a larger company.

And for almost everyone out there that’s OK. Because for them it’s not life-and-death. Social media mavens – the so-called A-listers – need to get some perspective. Fast.

It’s surprising how many ordinary people - complete non-tech-heads – simply put up with their computers at home, computers that have become appallingly slow and virus-infested over time. It isn’t until an unsuspecting nerd shows up at home that they complain about these problems, not unlike the innumerable occasions that acquaintances pounce on my physician father with their aches, pains and niggles during social visits.

Maddeningly, the simple optimization and clean-up these machines need (whenever I’m called upon to do so, never explicitly but as an inevitable extension of the litany of complaints themselves) are so common that I’ve often wished for a script that I can carry around with me (running something off a USB drive that you tote along with you is so much more impressive to non-techies than downloading that same thing off the Internet) and run it each time.

Here is what seems to work wonders for “the computer is so slow these days”:

Hardware

Is the computer really old? Does it have enough free hard drive space and RAM?

Software and security

• Replace browser – Internet Explorer 6 or 7 with Firefox. Install Adblock Plus. Populate bookmarks toolbar with commonly used sites – email, online banking, news and suchlike. Demonstrate how to add new bookmark to toolbar and how to rename it. Change default download location to Desktop. Anything else just confuses ordinary folks (“where did my download go?”). Log in once to each commonly used website and save password.
  
• Replace Adobe Acrobat Reader with Foxit Reader, Windows Media Player with Winamp for music and VLC Media Player for video. Set file associations.
  
• Download AVG Free antivirus and run one update after the install. Demonstrate how to manually update every day or two.

Housekeeping

• Clean up the desktop. Create a “Other Programs” folder and move all shortcuts not commonly used to it.
• Move My Documents to drive D: (any drive other than C:). Explain why this is useful in case computer crashes.
• Create an “Installation files” folder under My Documents and move all setup files into it.
• If there’s a largish, empty hard drive about twice the size of the installed RAM, change the location of the page file to this drive. Change the name of the hard drive to DONOTUSE (E:) or suchlike.
• Download and run Ccleaner once.
• Finally, defragment all hard drives and restart.
  

This is the 20% effort – 80% gain list of things a common computer needs after 2 or 3 years of use. It annoys me that OEMs – and the corner computer guy – don’t do their bit to make things easier:

• Separate data from the operating system – why ship computers with one large C: drive?
• Anti-virus – ship a robust, free antivirus instead of trial versions of commercial ones. What percentage upgrades unwittingly/unwillingly and what percentage is left vulnerable?
• If you’re going to ship a small monitor with a resolution like 1024×768, then merge the address bar and standard bar, and narrow the title bar in Windows Explorer to gain several pixels of vertical space.
• Ship Foxit/Winamp/VLC/Firefox without associated toolbars, desktop icons, free/ad/spyware.
• Ship a demo video explaining commonly used maintenance tasks – defragment, update anti-virus, even how to add bookmarks, save passwords and so on.

Now there are tremendous incentives for OEMs to bundle tons of crud with powerful computers (and powerful disincentives against not doing so), but I bet - perhaps naively, but also with experience – that customers will willingly trust you (whether you’re an OEM or assembler) when they buy a new computer, instead of you having to run ads that say “forget the last time we fooled you with a fast computer - this time, this new computer’s really really fast…”

As an update to my last post about the future viability of Firefox comes news that Google Chrome will now have the built-in ability to sync your bookmarks with the cloud – presumably with Google Bookmarks – as well as support for themes.

Both these features narrow Firefox’s lead over Chrome vis-a-vis features. The bookmarks sync competes with Mozilla Weave (although a quick look at Weave’s use cases show that it can do more than just sync bkmarks), and Chrome theme support competes with Personas for Firefox. Chrome will also have support for extensions at some future point. At that point, Chrome will be as full-featued a browser as Firefox.

These developments demonstrate that Firefox cannot compete on features alone. Security, extensibility (beyond just support for extensions), openness, integration into users’ online lifestyle – these are more viable points to compete on, although it’s tougher and requires more smarts to communicate this – to shape these amorphous concepts into a
clear message you can sell on.

(Sorry for lack of links – posting from BBerry)