Tuesday, February 8, 2011

Morning Brief: Huffington Post, AOL and ad sales; is it worse to be made 'redundant' or to be 'laid off'?

The usual media critics have now had their say about the AOL acquisition of The Huffington Post, and, again as usual, the conversation is about content, content, content -- as if money mysterious floats in every time a celebrity writes another mindless piece.

The best piece I've seen so far was from Emily Steel and Russell Adams from the WSJ simply because they mentioned ad sales. "One person close to the situation said people in AOL's sales department are excited to have a fresh, high-profile, buzzy ad space to sell." Exactly.
Arianna Huffington has been aggressive at building out her website's ad sales team and aggressively going after the site's share of Internet ad revenue. This is almost the exact opposite approach pursued by AOL, and those media gurus who will tell you (amazingly with a straight face) that the future is content aggregation and the almost mystical power of extracting money from readers that will ensue if you just listen to their BS.

If Huffington will bring her aggressive revenue generating attitude to AOL this will be good. But both Huffington and AOL CEO Tim Armstrong have rather elitist opinions concerning those who actually generate the news content. The Huffington Post has been criticized in the past for the fact that only the high profile writers are compensated for their work, while most of the bloggers who produce the most copy and drive the most traffic are compensated with the honor of being published on the website. As a result, the quality of the editorial is about the same: a mix of TV personality stories with current events -- more current events at HuffPost, more hair advice at AOL.

In this regard, Arianna Huffington and Tim Armstrong have a lot in common. But if you think this is part of the new wave of editorial you haven't been around long. The late eighties and early nineties was a time of word counting in many newsrooms as new publishers and editors entered the scene, waving their MBAs, and often distributing the latest book about the philosophy of management, usually with the word "reengineering" in the title.

Like today, it was all about under valuing employees, slashing costs, and failing to understand that the other part of "profit" is revenue. What killed off these folks? The Internet boom. You can't charge a writer or sales professional peanuts when they are in high demand from new companies. But now, with unemployment (and under employment) so high, it is easy to see that one can launch hundreds of local news sites with cheap labor. It's harder, though, to make money at it.

The Brits have a certain way of describing being laid off that I've always found grating. Today The Guardian announced that Tim Brooks, who has served as managing director at Guardian News & Media, "has been made redundant". God, that's an ugly way to say that the company has brought in big, burly men to clear out the desk of an employee.

Similar to "reengineering", the reason given today for the elimination of Brooks's position was "ongoing reshaping of business".

Is Motorola really going to price the XOOM at $799? Well, yes and no. The price being floated around is the price of the tablet without a data contract. So the question isn't whether consumers will pay this high a price for an Android driven tablet -- they won't, they will buy the iPad instead -- but whether consumers are willing to sign yet another data contract.

"This is very aggressive pricing in the face of consumers' clear willingness to treat Apple products as the "gold standard" and worthy of a premium, with competing products representing some kind of compromise, which is typically reflected in pricing," Forrester Research analyst Charles Golvin was quoted as saying by eWEEK.