Eric Feng joins Flipboard as CTO, reporting to CEO Mike McCue. Feng was the founder of Erly, which let users create webpages for specific events. Before that, he was CTO at Hulu and a partner at venture capital firm Kleiner Perkins, which has been one of Flipboard’s largest investors.

Eugene Wei, who’d been VP of product at Erly and prior to that worked at Hulu and Amazon, and Eden Li, who’d been a software engineer at both Erly and Hulu, are heading to Flipboard along with Feng.

In addition to Feng, Wei and Li, Flipboard spokeswoman Christel van der Boom said the company also hired five other people in engineering and product this week, and is “looking to add more people as well.”

Flipboard, which is a little over two years old, had 20 million users as of September 2012. It has apps for iPad, iPhone, Android phones and tablets, Kindle Fire and Nook.

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Chernin, as you might remember, is the guy who was responsible for optimizing the online video revolution, by helping coalesce a coalition called Hulu. He is replacing Flipboard founder and CEO Mike McCue, who left the board a few months ago. He announced his decision in a tweet – his first tweet in two years since he has been on the network.

@twitter I've been a long-time user of twitter for news and information. Happy to be joining board of this very exciting company.—
Peter Chernin (@PeterChernin) November 16, 2012

Call me crazy, but I like to see board members actually use the social product to understand the social dynamic which is part of a company’s allure. Otherwise, you think of it as no differently than a TV network – which Twitter isn’t.

I did ask Chernin (on Twitter of course) what he had learned about Twitter in his two years of being on the network and what made him decide that it was time to join the board. So far, no response. I have a feeling, it might be a a while before I get a response.

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Our RoadMap book contains 10 interviews and essays with some of the leading thinkers in web, mobile, product and device design, including Mike McCue CEO of Flipboard, Nest CEO Tony Fadell, designer Christian Lindholm, and the head of design for Parlay Labs, Scott Jenson.

Here’s our TOC:

1. The reinvention of the store for a connected world, interview with George Blankenship, Tesla Motors
2. 10 rules for designing the future, essay by Christian Lindholm, designer, entrepreneur
3. Attention to detail: designing for new frontiers, interview with Hosain Rahman, Jawbone
4. Marching backwards into the future, essay by Scott Jenson, Parlay Labs
5. The magic of good design, interview with Tony Fadell, Nest Labs
6. Find the story in your product, images & photos, Oren Jacob, Bobby Podesta, ToyTalk
7. The call of beauty over data, interview with Mike McCue, Flipboard
8. The qualified self: online identity finally comes of age, essay by Edward Aten, Swift.fm
9. Using data to design for your ears, interview with Tom Conrad, Pandora
10. The rise of augmented intelligence and data mapping, essay by Sean Gourley, Quid

Down the road you’ll be able to buy an ebook version of our book from GigaOM Books, but the printed and bound version will only be available to attendees at the RoadMap event. RoadMap will kick off bright and early this coming Monday morning (November 5)! Yes, it is rapidly approaching. See our awesome speaker list here, and buy the few tickets remaining here.

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This clip is part of an interview we did with McCue for our RoadMap book, which we’ll be giving away to all attendees of RoadMap, our conference focused on design in the age of connectedness that will take place on November 5th in San Francisco. Speakers include the CEO’s of Instagram, Pinterest, and Tumblr, designers like Yves Behar, Scott Wilson and Tony Fadell, and many others (schedule and speakers here). We have a limited number of tickets, so reserve yours now here.

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The decision by the New Yorker and Wired to unplug their stories from Flipboard, a tool that lets readers “flip” pages magazine-style on their tablets, suggests that while Flipboard has proven itself very capable of delivering readers, its ability to deliver revenue is much murkier.

In a telephone interview, CEO Mike McCue played down the significance of the magazines’ pull-out, calling them “outliers” and suggesting they miscalculated. ”I find it ironic that Wired is taking a step backward while the New York Times is taking steps forward.”

The Flipboard quitters: examples or outliers?

The announcement by the New Yorker and Wired, reported by Ad Age this week, caused a mini-stir in publishing circles. A Wired exec also complained about a dearth of advertising for the platform. The two Conde Nast publications indicated they will now keep their content on their own websites and apps and use Flipboard only to display headlines.

The move comes at a time when some publishers are questioning the value of Flipboard, even as the social reader is claiming  more than 8 million users. Unnamed executives told Mashable that the advertising proposition wasn’t adding up and that they feared Flipboard was cannibalizing their readers on other platforms.

Flipboard, which compiles stories based on social media recommendations, lets publishers add full screen ads that resemble those found in a magazine. The aggregator, which says it has thousands of partner publishers and a waiting list of another thousand, takes a cut of the revenue from those ad sales. It has been running four to eight ad campaigns a month, some of which appeared in the Flipboard editions of Wired and the New Yorker.

Build it and advertisers (might) come

Flipboard is steadfast that its platform — stacks of curated content corralled by social media — is the future of news and, based on its popularity, many readers seem to agree.

But despite offering a magazine-like showcase for brands, Flipboard has yet to create a meaningful advertising ecosystem. The company suggests this is because the ad industry is not yet configured for a platform that, in its view, straddles both digital and off-line formats. In an earlier interview, a Flipboard spokesperson said many brands have a “little trial budget” for tablet ads and that they will increase such budgets as they come to understand the platform’s potential.

In an effort to bring advertisers up to speed, Flipboard has invested in a six-person New York team led by Christine Cook, the former Chief Revenue Officer of News Corp’s tablet newspaper, The Daily. Cook’s team is tasked with helping salespeople with lead generation and spreading the word about tablets’ potential.

“They’re working with top agencies and advertisers to educate them about what’s out there,” said McCue.

A spokesperson added, “We support their sales teams with our team in New York. We can help them sell into current advertisers, but many times we bring new advertisers since we often get calls directly from brands interested in Flipboard.”

As for publishers, McCue suggests they are “addicted to ad revenue from banner ads” but that those ads are in a permanent downward price spiral. He says they are better off with Flipboard-style ad campaigns that offer 10 to 15 times the payout of banner ads,  which is “closer to print economics.”

Who gets to keep the money?

So here’s the mystery. If Flipboard is so lucrative (McCue says it is generating millions in ad revenue), why are Wired and the New Yorker taking their ball and going home? Wired’s Howard Mittman told AdAge that advertiser interest isn’t sufficient and that the magazine prefers to engage readers without an intermediary.

Not all publishers are so downbeat. Christine Osekoski of Fast Company says her publication has its first advertiser partner in place for September and that Flipboard will be a very lucrative new revenue stream for Fast Company. She adds that any risk of cannibalization is offset by the chance to introduce Fast Company to new readers.

These mixed messages, in addition to the curious timing of the pullout by Wired and New Yorker, suggests that the issue here may not be Flipboard’s overall viability but instead the company’s formula for dividing revenue.

McCue would not disclose a percentage of the revenue share — he would only say the publishers get more than half and that the formula is the same for everyone. And, for Conde Nast, that may be the problem.

Wired and the New Yorker have been prime ambassadors for Flipboard as a result of their prestigious brands and top-shelf advertisers. But now the two magazines may have grown tired of carrying water for Flipboard and may have decided to make a point by pulling out on the day of the latter’s big New York Times announcement. The decision may also give Conde Nast leverage to negotiate better revenue deals for its other publications that are continuing their Flipboard partnerships. The company, unlike some publishers, is in a position to tell Flipboard it needs Conde Nast more than the other way around.

Flipboard’s Future

In the bigger picture, publishers will be hard-pressed to put the Flipboard genie back in the bottle. As my colleague Mathew Ingram explained in his analysis of the New York Times partnership, a growing number of readers prefer to get their news through aggregators and social media rather through a publisher’s website or app. If publishers walk away from Flipboard, they run the risk that readers won’t follow them back to their old platforms.

What all this means is that Flipboard’s future is not immediately in question — in short, the company’s issues appear to be rooted more in marketing rather than a bad business strategy. The issue appears to be the terms of Flipboard’s partnerships with publishers. It’s a pretty safe bet that by this time next year its one-size-fits-all policy will be replaced with something more granular.

And finally, there is the question of whether Flipboard will seek other revenue streams if publishers insist on taking a greater share of ad dollars . Flipboard said the company is already generating a small amount of non-advertising revenue. Given that McCue said last year that a premium ad-free version of Flipboard is off the table, this revenue may come from readers who sign up for paywall publications they discover on Flipboard.

(Image by Lightspring via Shutterstock)

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While the iPhone app is partially inspired by the bigger iPad version, it also charts a new course. The page flip gesture that was associated with the iPad version of the app has been replaced by a flick gesture — from top to bottom or bottom to top — that is meant to take into account the smaller screen size.

Flipboard CEO Mike McCue

McCue pointed out that the iPad version of the app saw most of the usage at the start or at the end of the day. The iPhone version is going to give people quick access to the content all through out the day. There are many clever little improvements in the new app. For instance, the app has “cover stories” that shows the latest updates — photos, tweets and more — from your closest friends. The idea is for you to check and leave and not linger.

With proliferation of niche focused social networks – Instagram for photos, for instance – there is growing need for an aggregation service. Flipboard is hoping that it can be that one stop shop.

After using the app for nearly a week, I have to say, Flipboard for iPhone is more addictive and more engaging than its grown up cousin. I have been using the Flipboard service much more often. To me, this is an example of form fitting the function. I hope you get a chance to download it and try it for yourself.

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The startup on Thursday upgraded its iPad app with a new Flipboard Accounts system that will let users read the same set of subscriptions on the iPhone app as they have on iPad.

CEO Mike McCue told our paidContent Advertising 2011 conference in October the iPhone app was coming soon and must support users reading content at different times and locations than the more lean-back, domestic tablet experience. (Video of his Q&A is available here.)

Flipping hemisphere

Meanwhile, Flipboard, whose English app was blocked by China in May, is planning a reboot including launching a Chinese version, according to an exec from the Sina (NSDQ: SINA) portal (via Technode), which has been working with Flipboard to enable sharing of articles to its Weibo microblog service.

Flipboard did not confirm international plans to paidContent. China, a country where online operators are prohibited from publishing certain content, could prove challenging – after all, Flipboard wants to be the place where users can read any content they choose, including that which passes through their social networks.

What’s more, the market is host to a glut of page-flipping news reader copycats, including Zaker, Xiaoguo, Tencent iCare, MagSina, Netease Reader and Bozong News.

The apps from MagSina and Netease (NSDQ: NTES), two of China’s largest mainstream portals, look and function so much like Flipboard they appear to have re-used Flipboard’s own interface design and possibly even underlying code.

Growing pipeline

Flipboard is growing fast and is busy. When we spoke with McCue in October, he said he had a pipeline of over 300 agreed-upon content feeds ready to add to Flipboard’s Content Guide.

The print-like tablet news reader segment, which was more or less created by Flipboard, is getting crowded in the west, too, with AOL (NYSE: AOL), Yahoo (NSDQ: YHOO) and, reportedly, Google (NSDQ: GOOG) now joining the likes of Zite and Pulse.

Thursday’s iPad upgrade also added Tumblr and 500px to the list of social services Flipboard users can get their content from, joining Facebook, Twitter, LinkedIn (NYSE: LNKD), Google Reader, Flickr and Instagram.

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» Watch the video of McCue’s Q&A with paidContent UK Editor Robert Andrews, embedded below. Full coverage of the conference is available in our archives.

“When something scrolls, you can’t put a full-page ad there,” McCue said. “We want to create a paginated experience. That allows for full-page, print-style ads.

“The web, as wonderful as it is, is not able to render content beautifully, the monetization model has been challenging, it’s not a good experience for readers. Print is flat; it doesn’t move – there’s a lot of good things about that.

“Don’t have infinite inventory,” McCue told advertisers in the audience. “There should be scarcity to the inventory. Sell to the people who are buying print ads from you.”

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When Flipboard founder and CEO Mike McCue was developing the service with partner Evan Doll, Quittner says, he drew on his background as a staffer at Netscape Communications — the original web browser company — in the mid-1990s, and tried to imagine a world in which the web had to be rebuilt from the ground up for a digital age. What would it look like? How would people consume it? One of the first things the two thought of was that it had to be social, says Quittner, “because that’s how we find things now. You have to take social into account when you’re thinking about media, and you have to take these new touch-type screens into account as well.”

So Flipboard (which has been downloaded 3.5 million times) allowed users to quickly browse their Twitter and Facebook streams in a magazine-style layout, before adding more sources of information — including RSS feeds, but also mainstream publishers and content companies. Just as Netscape and other web browsers created a software layer that allowed users to consume the web more easily, Flipboard was designed as a magazine-style browser for the social web, Quittner said: “Now that we have all these social services, what we’re trying to do is to create a kind of social browser on top of that.”

Although it could be seen as a disruptive force for media companies, in that it allows users to construct their own magazines or newspapers out of content from different sources, Quittner said that Flipboard is also interested in helping media companies figure out how to make digital media work from a revenue standpoint — and the company believes that advertising is a viable way of doing that, especially on tablets. The way that advertising used to work in print, with “beautiful, relevant advertisement placed interstitially between pages of content,” works really well, Quittner said.

“One of the wonderful things about tablets is that we’re back to pages again, and they work really well for monetizing media,” he said — and Flipboard recently launched ads for a number of media partners such as Conde Nast. “For big media companies, the answer [to revenue questions] isn’t going to come from one magic bullet like one tablet or one device,” Quittner said. “Where once there was one revenue stream, now there’s going to be 10 revenue streams [and] hopefully Flipboard will provide one of those streams.”

Although Flipboard currently sorts the content in the app according to what is the most recently published, Quittner said that upcoming versions of the service will include more “curation” in order to show users more relevant content — and that the filtering will be driven both by the company’s proprietary algorithms, but also by human editors (Zite, a Flipboard competitor that was recently bought by CNN, offers recommendations for readers based on their consumption patterns and also explicit ratings of what they read). In a world with so many sources of information, curation “becomes this really important, critical, highly-specialized editorial function,” Quittner said.

Flipboard closed a $50-million funding round in April from a group led by Insight Ventures that values the company at $200 million.

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Over the past few months, the company has introduced ads through deals with publishers like Condé Nast. Flipboard runs content from links via companies’ RSS and Twitter feeds — not publishers’ websites. McCue, who professed a great love of print magazines, made the distinction between interactive ads and digital ones and why Flipboard tends to avoid typical online formats.

“Interactive ads have drawbacks — you don’t want to wait for the long download time if you’re reading feeds in real time,” he said. “When we came up with our ads, we thought, ‘Let’s do a blend — we’ll take an image of a print ad that will be repurposed for RSS feeds. Now, you can also go to a full HTML5 website ad, which opens within the app. And if you’re a digitized magazine replica sold in Apple’s iTunes Store, you can have interactive ads downloading in the background within the iTunes Store. But we believe we have the best of both worlds.”

So how effective have Flipboard’s ads been? The evidence is mostly anecdotal and internal, so far, McCue told Andrews.

“When I talk to people, so far, no one has complained about a terrible experience,” McCue said. “Just the opposite. People go out of their way to tell us they like it. We did a study where we found that people are having the same brand lift as print or 30 percent better.”

In terms of product rollouts, don’t expect Flipboard to be on a lot of different devices anytime soon. The company concentrates on one particular item at a time. And lately, it’s been consumed by creating an iPhone version (finally). He declined to offer a time frame in terms of when the iPhone app would be ready, saying only that he believes it will be soon.

“It’s all hands on board to create the iPhone app,” McCue said. One of the reasons it’s taken so long to build is that the company doesn’t just want a shrunken version of its iPad-only app. “People use our app in the morning and before bed; those are our heaviest times,” he said. “People use their iPhones while standing in line at *Starbucks*. So it’s a different experience and the product has to account for that.”

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