Jason is not going to like it, the eyeballs are back and with a vengeance. And they are being chased by VC money. With advertising dollars flying to the Internet, it is no surprise to see so many sites pop-up to simply cash in on the […]

Jason is not going to like it, the eyeballs are back and with a vengeance. And they are being chased by VC money.

With advertising dollars flying to the Internet, it is no surprise to see so many sites pop-up to simply cash in on the ad-sense bonanza. And to package these in the “death to the media” message is the new black! Latest one to say that is none other than Jim Manzi, co-founder ex-CEO of Lotus, who has teamed up with several others to pump $6 million into a New England start-up called Gather. This on top of $1 million in seed funding from Minnesota Public Radio.

”No longer must I accept much of my content from what I have called the Literary Industrial Complex, that group of concentrated media organizations with their small elites and self-reinforcing arbiters delivering my news and information ‘top-down,’ ” Manzi wrote, casting Gather as a democratic alternative to the mainstream press.

Manzi, who should be remembered for creating selling software that was so cumbersome that it makes Microsoft Outlook a paragon of consumer friendliness, is now an expert on Media, and how it needs to be reinvented. Oh please! Now if he really believed that, I bet you, the first story on the company would not have appeared in Boston Globe, but instead in the open media. Never mind the nagging details.

So what kind of revolution is Gather going to unleash?

They will pay bloggers/contributors money to write, and if the story is popular, then the contributors will make a lot of money. Just the sort of thing that Jason and Nick did two years ago, without venture capital funding. And did it quite well. Jason lets loose on his blog. There are others who are attempting this same model, Squidoo, Backfence, PersonalBee etc etc etc.

Mathew Ingram says it well when he writes, “Will any of these startups find success, or will they all? It’s a bit of a crapshoot at the moment. Fun to watch, but nerve-wracking to work in, I imagine.” My other Canadian friend Mark Evans takes an even tougher stance. “Gather.com epitomizes what I increasingly see as a troubling Web 2.0 trend in which VCs jump on start-ups amid the fear of missing out on the action,” he writes.

(I do like the fact that these folks are trying to pay their contributors, but my issue is that paying the contributors is addressing the wrong side of the equation.) What is the problem with a models like that of Gather? They are looking at the world of media from the wrong side of the prism.

Citizen reporters mean eliminate the cost of creating content, and a bottom up revolution. Absolutely no problem with that, because that’s how we get new voices like David Zatz. Still, this notion of content creators as a cost center, is absolutely bogus. (See the paycheck of a beat reporter, and you realize, that cannot be the problem!) Most media companies, especially the local dailies are suffering because they have an inefficient infrastructure.

Paper expensive, storage cheap. Printing press expensive, bandwidth cheap. Craigslist takes their classified business because its easier, and cheaper. The news paper classified ad departments are how should I put it mildly … lazy. The legacy costs of doing the business are at core of the problem facing media right now.

You want to see a true model of the new-new media, then look at PaidContent. Two reporters, two laptops and a whole lot of money. Staci and Rafat, like true reporters, dig dig dig, and scoop, scoop and scoop. (Sorry Jeff, scoop is the honey that gets the flies!)

From the archives: Dawn of The Micro Pubs.

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  1. Hi Om

    Couple correction Om,

    1. Jim is not the founder of Lotus. He took over CEO reins from Mitch Kapor (Lotus founder).

    2. Lotus Notes Mail Client and CC:Mail came to Lotus as part of M&A deals. Both products predate Outlook.

  2. lawrence coburn Sunday, January 15, 2006

    Hi Om, I sort of expected a warmer reaction from you to models like Gather, given that you were the first to voice concern over Web 2.0 businesses building their models on the backs of consumers.

    Unlike the vast majority of Web 2.0 companies, Gather seems to be trying to give back to its contributors.

    I’m puzzled by all the negative reaction.

  3. the negative reaction – as you point out – is basically to the whole new media models being built on the wrong premise. i am glad to see them paying their contributors. no problems with that.

    i updated that bit, just to clarify. the damn nyquill is still in effect.

  4. ramana,

    thanks for the corrections. i made the one about his title. however, the mail client etc … the remark stands. they were horrible products that were difficult to use and hence microsoft was able to take care of them in the market place… using some of its dollars of course

  5. Welcome to the new Adsense Honeypot as Batelle points out . . . all the blog networks(eyeballs) in particular Squidoo are nothing more than Honeypot plays: completely useles from a value perspective. Just an egregious Honeypot. Speculating. Cheers.

  6. Mister Snitch! Monday, January 16, 2006

    A flood of startup money may enable a flood of pro

    A stampede of capital is headling to content sites. Om Malik has written a sharp piece on Gather, a startup that pays content creators according to the amount of traffic they generate. A number of others are using a similar model: Squidoo, Backfence,…

  7. You’re moving the goalposts.

    Jason took issue with the notion that big media companies (Fox, Time Warner/AOL) were buying sites based on eyeballs (traffic without monetization) versus revenues (traffic plus monetization). The point was that valuations weren’t based on unique visitors (as you’d suggested), but rather on actual and forecasted revenues.

    Now you’re talking about VC investing in startups, which, by definition, have zero eyeballs and zero revenues.

    I totally agree that it is a sign of froth to see non-media types suddenly developing media guru-ness.

    And of course (some) VCs are always prone to believe in the classic three step model:

    1) get lots of traffic
    2) ????
    3) exit!!!

    But I gotta stick up for Jason — this doesn’t negate his point at all.

    When Tribune Co. buys “Gather” for $20 million before they have any real revenues — then you’ll have something.

    But the takeaway? Yes, it’s getting overheated. For sure.

  8. Om,

    While I think that you bring up a lot of good points, I think that you’re missing out on the angle of community that Gather is trying to construct for people who were not trained as professional authors or have a burning desire to go in that direction. I agree that Rafat’s success is highly compelling and I applaud his efforts regularly, but there’s a middle ground between people like him and total obscurity that’s not well-addressed by plain old weblogging. The Gather model may have its weaknesses, but it offers at least a prototype of what a high-quality community built around professional and amateur content could look like. My suspicion is that others will be in this arena soon – perhaps with more open solutions. More commentary via our regular News Analysis.

    All the best,
    John Blossom
    Shore Communications Inc.

  9. Spontaneous Orders » Blog Archive » Gather not special enough for the big boys Monday, January 16, 2006

    [...] Jason Calacanis snarks on a Boston Globe article about Gather that dares to not mention WIN …. yeah, some day you’ll be able to make living from blogging–it’s crazy! That someday happen a couple of years ago, but who’s counting right? Who wrote this story anyway?!?! And [...]

  10. Kareem Mayan’s Weblog Monday, January 16, 2006

    Gather.com Has a Marketing Problem, not a Product Problem

    I was chatting with a buddy on IM today about how Gather.com is getting raked over the coals by some bloggers following a story on them in the Boston Globe (reg may be required). Looking over Michael Arrington’s complaints about…

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