Doctor's Associates, Inc. v. QIP Holders LLC, 2010 WL 669870 (D. Conn. Feb. 19, 2010). My prior post on this case.

As a long-time vegetarian (over a quarter-century), I find America's obsession with "more meat" competitions simultaneously amusing and repulsive. On my personal blog, I have routinely chronicled the "burger wars" between heartland restaurants trying to outdo each other by offering bigger and bigger burgers. As far as I know, the current high-water mark is the Beer Barrel Main Event Charity Burger, a 123 pound burger that includes 80 pounds of meat. See the photo. If you're one of those people who thinks a burger can never have too much meat, good luck working on that bad boy.

Today's post involves subway sandwiches instead of burgers, but it turns out that subway sandwich restaurants' competition over claims of having more meat is no less stiff. Quiznos kicked off the war in 2006 by launching a "double meat" line of sandwiches. Quiznos ran two TV ads comparing the meat in its sandwiches to Subway's and set up a website soliciting individuals to make and submit their own comparative digital video ads. Subway was not amused and ultimately filed a seventh amended complaint (!) over Quiznos' ad campaigns. (What a patient judge).

The parties hotly contested every aspect of the litigation, and Rebecca does a thorough recap of the lengthy ruling. I'm going to focus on the court's discussion of the crowdsourced video ads published on Quiznos' ad campaign website, which Quiznos defended on 47 USC 230 grounds.

Citing the MCW v. Badbusinessbureau case from 2004, the court says "the critical inquiry with respect to CDA immunity in this case is whether the Defendants merely published information provided by third parties or instead were actively responsible for the creation and development of disparaging representations about Subway contained in the contestant videos."

The MCW decision was questionable even at its time, but it's bizarre to see the court reach into history for this obscure, archaic, unpublished and geographically distant (it was a TX precedent being cited in a CT court) district court precedent. To do this, the court bypasses dozens of more recentand more thoughtfulcases, including the multiple Ripoff Report cases that have expressly and implicitly rejected the MCW case. A more natural citation would have been the Roommates.com case, which also referenced legal distinctions between active/passive websites similar to the legal standard quoted above. However, if the court had followed Roommates.com, it almost certainly would have ruled for the defense, as Quiznos didn't require illegality or even channel users towards illegality. (Rebecca makes the same point). Therefore, I'm baffled how the court got to this legal standard citing this legal precedent.

Using this odd legal standard, the court says it's up to the jury to decide if Quiznos just exercised traditional editorial control or impermissibly "actively participated in creating or developing the third-party content submitted to the Contest website."

Unquestionably, sending this case to a jury is a 230 loss, but how bad is unclear. We'll never find out what the jury would do with the case because the parties promptly settled the case after this ruling. However, a plaintiff's ability to hold a case open through trial, rather than having it disposed of earlier in the proceedings, would itself represent a significant win for plaintiffs--it would mean plaintiffs can get discovery to fish for embarrassing facts, force the defense to incur lots of litigation costs, and get a chance to tell their sob story before a jury. (FWIW, I am not aware of any 230 case that has ever reached a juryam I forgetting something?) Nevertheless, I think very few courts will follow this precedent given the plethora of more persuasive precedents and the fact that Quiznos' crowdsourced ads were just one part of Quiznos' larger allegedly false ad campaign. Therefore, I don't expect this 230 loss to spread to many other cases.

I also don't think this case shines much light on the legitimacy of crowdsourcing ads. There's no reason to believe that crowdsourced ads are per se problematic. At the same time, if the advertiser uses the ads offline, clearly the advertiser "adopts" the ad and takes full responsibility for its contents. If the advertiser only publishes the ad online, 230 might be available but the advertiser still might tread cautiously due to the FTC Endorsement and Testimonial Guidelines, which basically ignores 230 and holds advertisers liable for certain types of third party advertisements anyway. I think 230 may nullify this part of the FTC guidelines, but most advertisers would rather not tangle with the FTC to establish the deficiencies in the FTC's thinking. As a result, I expect most advertisers will vet most crowdsourced ads, even if they only publish them only, as if the advertiser is legally responsible for the ads and not protected by 230.

BTW, the Subway v. Quiznos lawsuit isn't the only litigation over subway restaurants' claims of double meat. In an apparently unrelated lawsuit, last month a class action suit was filed over Blimpie's "Super Stacked" sandwich for overclaiming that it had double meat.

I confess some schadenfreude when I see lawsuits against meat pushers for overhyping meat quantities. I would not shed a tear if the meat pushers lock up each other in litigation death struggles and sue each other to oblivion. Of course, consumers can facilitate that outcome by refusing to patronize vendors who "compete" with each other by encouraging us to overconsume the Earth's resources.

Today, Rescuecom issued a press release declaring victory in its litigation against Google. But it's an odd definition of "victory" given that Rescuecom has apparently voluntarily abandoned its 6 year litigation effort without any new concessions from Google. The dismissal notice.

This development reminds me a lot of the American Blinds v. Google denouement, where American Blinds also simply gave up and dropped its multi-year lawsuit without any concessions from Google. Note to future plaintiffs: if you're going to threaten Google's $20B/year cash cow, chances are pretty good that they have the resources to outlast you.

Why did Rescuecom give up? According to Rescuecom's press release, "Google has recently confirmed to Rescuecom that it has removed Rescuecom's trademark from its Keyword Suggestion Tool." That, plus the fact that Google blocks trademark references in ad copy, means that Rescuecom feels it has "obtained two of the three things we initially sought in our complaint against Google." And if two out of three is good enough for Meat Loaf, apparently it's good enough for Rescuecom. At minimum, having low standards makes it a lot easier to declare victory when you give up.

However, this explanation is pretty hollow. Although the press release treats Google's removal of Rescuecom from the keyword suggestion tool as a new development, it appears that Google made this change IN 2005. Wendy Davis reports:

[Rescuecom CEO] Milman says he only learned last week that Google had stopped suggesting Rescuecom as a keyword. "Who knows what would have happened if they had told us back in 2005 that they had taken our name out of their keyword tool?" he said.

Hmm...I think I know the answer to that question! Then again, if getting out of the keyword suggestion tool really was one of Rescuecom's Big Three objectives all along, maybe they might have asked Google about it in 2005...or 2006...or 2007...or, well, you get the point. Spin it however they want, it's hard for Rescuecom to look good while dropping a lawsuit based on a 5 year old fact.

Nevertheless, I'm interested in knowing more about this removal. Does Google have a way for trademark owners to "opt out" of having their trademarks in its keyword suggestion tool? I would expect that option to become very popular if it were well-known. If anyone has information about how trademark owners can make an election with Google, please share it.

Given the completely disingenuous nature of declaring victory based on getting out of the keyword suggestion tool, there may be a better--and more self-interested reason--for Rescuecom to give up. Rescuecom is defending a trademark lawsuit brought by Best Buy over Rescuecom's competitive AdWords purchases of the "geek squad" trademark. Rescuecom was caught in the duplicitous position of making plaintiff-side arguments against Google while making highly contradictory defense-side arguments against Best Buy. As a result, every positive step in its Google case had the potential to degrade its position in the Best Buy case. By abandoning the Google fight, Rescuecom avoids this difficult dilemma.

As an odd byproduct of this development, Google and Rescuecom are now aligned in advancing the arguments that competitive keyword advertising in AdWords is legitimate. Isn't there a passage in the Bible about the lion and the lamb lying down together?

The roster of pending AdWords cases (I most recently double-checked the status of these cases on February 20, 2010):

* Ezzo v. Google
* Rescuecom v. Google
* FPX v. Google
* John Beck Amazing Profits v. Google and the companion Google v. John Beck Amazing Profits
* Stratton Faxon v. Google (not initially a trademark case). Check the status.
* Soaring Helmet v. Bill Me
* Ascentive v. Google
* Jurin v. Google 1.0 (voluntarily dismissed), succeeded by Jurin v. Google 2.0
* Rosetta Stone v. Google
* Flowbee v. Google
* Parts Geek v. US Auto Parts
* Dazzlesmile v. Epic

140proof, which is based in San Francisco and backed by a $2-million investment raised last summer from Blue Run Ventures and Founders Fund, said that its algorithm aims ads at users based on their profiles and other public data. Other Twitter advertising services include Ad.ly, which has gotten some press attention for paying celebrities such as Kim Kardashian thousands of dollars to endorse products to their followers, as well as Magpie, Assetize and IZEA.

The question all of these services will inevitably confront including Twitter itself, once it launches its own platform is how users will react to a wave of advertising in what was once an ad-free social network (in the case of 140proof, of course, you can simply not use HootSuite's mobile apps and you won't see them). Many of these services are only just ramping up in what will undoubtedly become a much bigger campaign to bring ads to the Twittersphere. So what will you do when ads start appearing in your Twitter stream?

Related content from GigaOm Pro (sub req'd):

How Human Users Are Holding Twitter Back

First, let me inventory the raw materials that got me thinking this way. Recently JC Hutchins posted that he had been dropped as an author by St. Martins Press and that they would not be publishing the 7th Son sequels. The post lives between a gut-check and a crisis of faith from one of the pioneering new media creator/ novelist hybrid guys. He also posted about monetary realities of writers pubishing via ebooks. Not that long before this, I had listened to JC's Hey Everybody interview with Pablo Defendini and Ami Greko from The New Sleekness blog. It's a really interesting discussion about the future of book publishing by industry professionals young enough in their careers to be less invested in the status quo and more willing to help a new future emerge. (Side note 1: I met Pablo and Ami at last year's Dragon*Con in the classic SF con fashion I wanted to meet them, saw them in a hotel bar, asked if I could sit with them, introduced myself and hung out for an hour. Try it, it works! ) Much in my thinking was informed over the last month by the Amazon/Macmillan ebook pricing wars of far too large a trail to link to anything. In that debate I did first run across Joe Konrath, his fiction and some of his posts with amazingly open and detailed statistics of what he sells and what he makes from digital publishing. (Side note 2: I bought, read and enjoyed his book Whiskey Sour as fallout from the debate).

There are many other bits of thought in the mix, such as my feelings about beginning my own novel during NaNoWriMo and thinking about hiring my friends at Sterling Editing to work on it and what I might choose to do with such a book when)it is finished. That's enough of a prelude, though. Time to hit it.

JC Hutchins struck a nerve when he basically waved the white flag on his current way of working.

Creating podcast fiction does does not generate direct revenue for me. Based on anecdotal and statistical data, very few people are willing to pay for general podcast content, much less podcast fiction. Since my goal is to make a living wage with my words, the current monetization models including in-show advertisements will not deliver this. Dedicating time and effort to my non-fiction podcast projects will deliver equally underwhelming monetary results.

It is also apparent to me that using the Free model to promote a tangible product, such as I did with 7th Son: Descent and Personal Effects: Dark Art, does not deliver sustainable sales results. I have friends some of whom are my best friends, the most talented people I've had the privilege to know and work with who have absolute faith in this model. I treasure their trailblazing efforts and enthusiasm. My faith, however, has been fundamentally rattled.

Put simply: The new media model viably supports only the most blessed and talented of authors. The time, effort and money I invest in entertaining you for free pulls my attention and talent away from projects that can generate revenue. While podcasting, podcast fiction, and most importantly your support and evangelism has positively impacted my life and career in ways I'll never be able to fully express, I cannot continue to release free audiofiction if I wish to make a living wage with my words.

This is pretty big stuff in the world of podcast fiction. Hutch was one of the pioneers of the form and his getting picked up by St. Martins was considered a watershed and a validation for the medium. So if he can't make it in this world, what does that say about all the other podcast novelists who are less engaged, have less of a fan base, less sheer horsepower? Does it mean this medium is screwed?

I am positing that Hutch had a terrible misfortune of timing, that he arose as a viable author at exactly the wrong moment in publishing history. As he started down his path it seemed like the end game was to get a book deal with a major publisher. For writers of the last 100 years, this was the reasonable career success path for authors, and practically the only one. In the last few years though a sea change has happened so rapidly and thoroughly to flip that Hutch got his boat capsized in the process and he will be far from the only one. As crazy as it may sound, for a certain kind of author at this point I think a major publishing contract may seem like winning the game but is in fact losing it.

The red flags I got from the JC Hutchins post started here:

Examining the lead up to, and release of, the novel, I cannot see how I could have promoted it any better than I did. I literally went broke promoting this book and Personal Effects: Dark Art (another novel that will not have a sequel; it also underperformed). I conceived numerous brand-new online marketing campaigns that dazzled you and others. I asked you to purchase the novel, and many of you did.

If JC is literally going broke promoting 7th Son and Personal Effects book, I think a reasonable question to ask is What is St. Martins Press' role in this? If JC is willing and able to put so much of his own time and money into the promotion of the books, what value is he getting from the big publisher that is worth giving away 90% of the sale of the book to them? 50 years ago, and 20 years ago and 2 years ago, this made sense. It was pretty much impossible to get a book published and into the hands of the world in any significant way especially in a way that a writer could make a full-time living without a major publisher contract, especially one paying advances at a level to be a livable wage. Nowadays, especially due to the markeplace enabled by the Kindle, Nook, Sony Reader et al, that's a different equation.

Joe Konrath's post about the money he makes from the Kindle store shows a really clear pattern that he summarizes with:

My five Hyperion ebooks (the sixth one came out in July so no royalties yet) each earn an average of $803 per year on Kindle.

My four self-pubbed Kindle novels each earn an average of $3430 per year.

If I had the rights to all six of my Hyperion books, and sold them on Kindle for $1.99, I'd be making $20,580 per year off of them, total, rather than $4818 a year off of them, total.

So, in other words, because Hyperion has my ebook rights, I'm losing $15,762 per year.

For a writer with an engaged audience, like JA Konrath has and like JC Hutchins has, there may well be more money in their books self-published primarily through the Kindle and other ebook stores. An interesting bit from the Konrath numbers above, that's from making 35% of the sales price for his direct books. When it changes to 70%, he'll be making twice as much per book as he posted above for the self-published ones.

Let me say it again: for a writer who is engaged with their audience and reasonably prolific (because you need new books to keep this engine turning), we may be at the turning point where a better living is available through self-publishing than a big New York publisher book deal.

There are certainly authors that this model will not work for. During my preparation for last year's Podcasting for Working Writers panel at Dragon*Con I talked to both James Patrick Kelly and Kelley Eskridge on this topic and they both raised the point that for a number of old school writers, the idea of engaging at the level of podcasting and doing large parts of their own publicity is anathema. A reasonable chunk of authors don't want to get out in the limelight and picked this career specifically so they don't have to engage. They write their books, maybe do a few conventions a year, do some bookstore events and that's it. Back to the keyboard where the serious work happens. That's fair enough and those writers will always need a publisher to do the parts of this business that would make them unhappy to pursue.

I think of the classic big publisher and big record label model as basically serving the function of the bank or maybe as VC. The manufacturing and distribution of the creative work was too capital intensive for an individual so this company would lend that money to the process, make the books or records show up in the store, do some publicity and keep most of the money. They insulate the creator from the process and from the retailers and fans. What publicity efforts exist, the big media company acts as a semi-permeable membrane to let a little of the public through, but not a lot. Ultimately in this model, the relationship with the fans of the buying public is owned mostly by the retailer and the publisher or label, very little by the writer or musician. For the author that doesn't want to feed and water that relationship, that's perfect.

For the other kind of author, a JC Hutchins or Mur Lafferty or Scott Sigler, going with a major publisher outsources to a third party a relationship with their fans that these writers are really really good at maintaining. When Hutch is paying his own money to publicize his books and his his own direct line into his own fanbase, what can the big publishers do for him? They could give him large enough advances to keep his bills paid while future books are written, but obviously they aren't willing to do that because sales aren't high enough. JC's books earn money, but not enough money to keep him in that system. For me, the real question is Did St. Martins Press do 9 times the work than JC did to get the work promoted? If not, what did they do to deserve a 90/10 split?

Last November for NaNoWriMo I began a novel that I have literally been thinking about since 1991 when I was 23. While I came nowhere near finishing it that month and am nowhere near finished now, I have a goal to finish this novel in 2010. I've already been thinking about what happens when I finish the book. Do I try to find an agent and then try to have them place it with a major publisher? Since I don't have any plans beyond that one book and thus don't necessarily have a writing career in mind, how does that affect my decision making? At the moment I'm leaning towards not bothering to place the book with any publisher at all. I'll pay Nicola and Kelley at Sterling Editing to work with me to get it publishable and hire a book designer and/or artist to hone the final product and then publish it to the Kindle store, Smashwords, the Nook store and whatever else seems reasonable at the time. I'll probably release it via Podiobooks.com at the the same time, do my publicity via that and the other usual online suspects and let it ride. The key point to me is that the energy I could spend in placing my book at a big publisher could be spent selling the book to readers and I'll probably make more money that way in the long run. This isn't the way things worked for the 19th and 20th century and it may not be the way it works in the future, but March 2010 it is the way it looks to me now. The validation of having a major publisher decide I'm their sort of writer doesn't do anything for me. I don't need the book contract to pay my living, I'd end up doing mostly my own publicity anyway so what the hell does the publisher have to offer me anymore? Rather than have them put out a $15 Kindle book that I see a buck or two from and no one buys with a print version that is on and off the shelves in head-swimming time on a death march to the warehouse remainder store, I'd rather put out a $5.99 ebook version that I see $4 from each one and more people buy. I have a whole rant on how the true function of ebook platforms is to enable impulse buys, but this current post is already too long. That must come later.

When I interviewed Cory Doctorow in 2006, one of the things he said is that the generation coming of age now is the first one to arise without a stigma attached to self-publication. Since I've been paying attention to the world of science fiction and writers in general, a giant shift has happened. When I joined GEnie in 1992, the notion of self-publishing your work meant that it was unreadable tripe and the very thought of it was risible to any serious author. Nowadays, it might well be the most rational economic choice available. If you aren't already in the system and earning livable wages from advances on your books, and you are the sort of writer and person with that drive a JC Hutchins, a Scott Sigler, a Tee Morris, a Mur Lafferty, an Alec Longstreth, someone willing to do more than thrown the manuscript over the wall and wait for finished copies to return it might be time to take the reins yourself and just do this. The costs are low which means the cost of failing is low. The traditional publishers aren't paying that much anyway so the opportunity costs are low. Just do it. Lynne Abbey, CJ Cherryh and Jane Fancher did. The writers at Book View Cafe did. I will. Don't pin your hopes on a big publisher with economic drivers that are different than yours. Just do it yourself, work the people yourself and keep as much of the money as you can.

Tags: akismet, amazon, ebooks, jakonrath, jchutchins, kindle, macmillan, publishing, sterlingediting, stmartinspress

Scherillo v. Dun & Bradstreet, Inc., 2010 WL 537805 (E.D.N.Y. Feb. 17, 2010)

I teach my Cyberspace Law students that the most effective online contract formation process is a "mandatory non-leaky clickthrough agreement":

* mandatory = the user cannot proceed to the destination without going through a screen soliciting their consent to the user agreement.
* non-leaky = there are no alternative ways the user can reach the destination. I realize this is redundant with "mandatory," but I remind students that a seemingly mandatory process can have leaks. For example, if customer support representatives will manually set up user accounts occasionally, the mandatory online process has become leaky because now a few users reached the destination without consenting to the agreement.
* clickthrough = the user manifests assent to the contract by clicking, and the user is told that the click signifies assent.

There are other ways to form online contracts (e.g., email exchanges), but if executed properly, the mandatory non-leaky clickthrough process should do very well against contract formation challenges. But even this description leaves open a number of user interaction judgments. Does likelihood of contract formation vary if:

* the agreement terms are presented on the clickthrough page itself or are only available for review by hyperlink?
* the agreement terms are presented in a scrollbox? If a scrollbox is used, must the user be forced to scroll through the scrollbox?
* the user is asked to check an additional box, such as a certification that the user has read the agreement?

In all of these cases, I believe the contract should be properly formed whether the answer to these questions is yes or no. However, I'm now a fan of adding a bonus mandatory checkbox as part of the formation process after reading today's opinion. A user mounts a sophisticated challenge to a mandatory non-leaky clickthrough process, and the bonus mandatory checkbox helps squelch the challenge. I think the court would have enforced it without the checkbox, but it sure put the user in an awkward/untenable position.

Scherillo bought a financial report about a company from Dun & Bradstreet's Small Business Solutions website. Scherillo alleges that the report painted an overly rosy picture of the company, leading him to make bad investment decisions that cost him money when the company tanked. Scherillo wants D&B to cover his investment losses.

Scherillo is almost certain to lose on the merits. Indeed, this case brought to mind one of the earliest cyberlaw cases, Daniel v. Dow Jones, 520 N.Y.S. 2d 334 (N.Y.C. Civ. Ct. Spec. Term 1987). (This case is a fun read--see how the court discusses electronic networked communications almost a quarter-century ago). That case involved Dow Jones' publication of an ambiguous report via a dial-up online service that led the plaintiff to make a bad investment decision. The court said that any tort claim for publishing inaccurate information required the plaintiff to show that it had a "special relationship" (analogous to a fiduciary relationship) with the information vendor, and an ordinary customer-vendor relationship did not qualify as a special relationship.

Interestingly, D&B would rather hear the case in NJ rather than keep it in NY and hope to benefit from substantive NY law that surely would doom Scherillo's case. (Perhaps NJ has a similar law). To move the case to NJ, D&B invoked the venue selection clause in its user agreement. Let's look at the online contract formation process. The court says:

"since 2007, the SBS website has included a page that requires users to register before purchasing a Dun and Bradstreet product ("the registration page"). On the registration page, users input information, including their e-mail address and name. The bottom quarter to third of the page contains a scrollable text box with the title "Terms and Conditions" [which contained a mandatory venue selection clause designating NJ]. Directly below this text box there is more text that reads: "I have read and AGREE to the terms and conditions shown above." Immediately adjacent to this text is a much smaller, empty box ("the terms and conditions check box"). Also at the bottom of the page is another box containing the phrase "Complete Registration" ("the Complete Registration box"). Clicking on this box completes the user's registration. McDonald testified that if a user clicks on the Complete Registration box without checking the terms and conditions check box, the user is unable to complete registration and is returned to the registration page."

Check out the page yourself as I saw it in Google Chrome on Feb. 18 (with cropping). The formation process looks pretty standard to me.

Scherillo attacked the formation process by saying he never consented to the agreement because "it was possible for him to unknowingly and involuntarily 'check' the terms and conditions check box." Not only that, he lined up Sean Chumura, "a cyberwarfare and computer forensics expert" who is also [LINK NSFW] helping Perfect 10 in its lawsuit against Google, to testify that "it was possible for plaintiff, while 'tabbing' through the registration page, to inadvertently hit the space bar and thereby 'check' the terms and conditions box."

[Snarky paragraph alert] First, this may prove the adage that you can find an expert to testify about ANYTHING. Second, Scherillo alleged $75k of investment losses. For a low-value lawsuit like that, he needs a cyberwarfare expert??? Third, I believe Chumura has a MySpace page. Really...? I wonder if he uses an AOL.com email address too. The MySpace page also reveals that its author appeared to attend the Dan Quayle school of spelling.

OK, back to the case. The judge was no more tolerant of this nonsense than I am. He resolves the factual dispute by saying:

even under plaintiff's theory--that, while "tabbing" through the fields on the registration page, he accidentally hit the space bar key and thereby "checked" the terms and conditions box--plaintiff would have seen the check mark appear in the box and then still would have had to hit the "return" key (or clicked the "complete registration" box with the mouse) to complete the registration and advance to the next screen. Plaintiff would have had an opportunity to see that he checked the box inadvertently before he then hit the return key on the "complete registration" box. Thus, to accept plaintiff's theory, the Court would have to find that plaintiff hit two keys accidentally-the space bar and the return key-and that he was then involuntarily and unexpectedly sent to the next screen where he nonetheless proceeded to enter his credit card information and complete the purchase of the report. This alleged chain of events is simply not credible.

Therefore, Scherillo's click on the "Complete Registration" box manifested Scherillo's assent to the terms, even if Scherillo chose not to review them. The court says that the fact that the terms were in a scrollbox is immaterial, and the fact that some sites require the user to scroll through the scrollbox before proceeding doesn't affect the effectiveness of D&B's implementation.

I believe this court would have upheld the formation process even without the bonus checkbox, but you can see how the checkbox defused the withering assault of a cyberwarfare expert. Thus, you might consider implementing the bonus checkbox to discourage similar silly attacks against your contract formation process in the future.

About twice a week I think, "Why don't I try this crazy idea and see if it works?" about some element of my career. With no label, no manager, and no inner voice of reason slow me down, I get to experiment all I want. 90% of my crazy ideas have to do with social networking -- which I spend half a lifetime doing, despite the crap I take from my family and Real Life friends. (Hey, some of us actually do bond over web comics, starship replicas, the fail whale, and photos of stuff on cats.) Mostly my nutty ideas work just a little bit. Some are epic failures. But my experimental flopping and floundering inches me closer to the day when I'll be totally financially independent as a full-time musician. Plus it's more fun than having a real job.

But every now and then a crazy idea works really really really good. Bam!

I planned to sell 20-40 of my little bootleg CD's. Silly me. I sold well over 200. My little stack of jewel cases looked so pathetic.

WholeWheatRadio.org broke every record for online listenership, CD sales, tips -- everything. The more listeners tuned in, the more tuned in, and the more money they gave, the more money they gave. The crowd online was thrilled to be breaking WWR records. I drove away from Talkeetna having earned about $4,000 in one night, with a new CD to produce in just a couple of days and an avalanche of e-mail and publicity requests to deal with. Seldom have I been so happy and so panicked.

If the acquisition of Touchco wasn't enough of an indication that Amazon is preparing for a skirmish with the Apple iPad, this should make it perfectly clear. Mike Nash, a man who has quite a history of accomplishments at Microsoft for the past two decades, is leaving the company to work on the Kindle business for Amazon.

Before leaving Microsoft, Mike was the Corporate Vice President of Windows Platform Strategy and was responsible for pieces of Windows business strategy, ecosystem engagement, consumer security, Internet Explorer, and emerging markets, according to his bio on Microsoft's Web site.

In addition to his most recent role, Nash has had a string of historic positions at Big M including a role as the first product manager on the original Windows NT marketing team; the Corporate Vice President of the Security Technology Unit; and a driver of a number of Microsoft acquisitions in the security space.

There's been no official announcement yet from Amazon so we're unsure of Nash's focus within the Amazon team.

[Mary Jo Foley, ZDNet] [Amazon Kindle]

Disclosure of Material Connection: http://dsclszr.us/5

Related articles by Zemanta

• Amazon acquires Touchco and a Microsoft exec (macworld.com)
• Another Windows exec Mike Nash is leaving Microsoft (seattletimes.nwsource.com)

Amazon Hires Mike Nash from Microsoft to Work on Kindle is a post from: Magical Tablet

News hit this Monday that Powered has acquired three social media agencies: crayon, Drillteam and StepChange. I just had a skype video conversation with Aaron Strout and Joseph Jaffe to learn more, here's my take. You can read crayon founder Joseph's take and Aaron Strout the CMO of Powered and a quick mention in NYT.

A Solution Set of Services Bolsters a Marketing Platform
I've heard of crayon, and have many conversations and even podcasts with founder Joseph Jaffe, I've also spent time with the Powered executive team last year. Stepchange is a 13 person team out of Portland focused on Facebook Apps and mobile, and Drillteam, from NY, has been around for 10 years and focuses on experitntial and advocacy marketing, such as connecting events to online like street teams, guerrilla, and ambassador programs. Powered isn't just a community platform, I learned they have other marketing features that really intent to provide a suite of offerings.

Natural Evolution Of A Growing Market:

• Consolidation happens in downturned markets. As the recession starts to show signs of it lifting, now's a great time for companies to come together and create a greater value. We saw this type of acquisition behavior from agencies during the first boom, and we should expect similar patterns here.
• Acquisition provides key services software platforms can't fill. It makes sense for Powered platform to partner up with a service(s) teams that have already been successful for some time, this improves the time to market to deployment. In addition to coming with a book of business, they can quickly deploy the Powered platform, expanding the software footprint. Joseph Jaffe has strong thought leadership, an existing marketing brand, and reach needed to the group.
• Yet, brings risk for Powered and new partners. First of all, there are some big names coming together, the real stress will be can these cultures, and their strong willed leaders, be able to jive together. Secondly, it'll be interseting to see if Crayon and services teams forces stragies on their clients that involve the Powered platform. I asked if there are any layoffs coming from consolidation, they haven't made any plans, but when you have 4 companies coming together expect redundancy.

Impacts To Customers, Partners and Competitors:

• Social Agencies should rekindle and bolster relationships. This impacts other social agencies like Stage Two Consulting, Social Media Group, AdHoc, Ant's Eye View, ForumOne, Community Roundtable, Shift Communications, Dachis, FutureWorks, New Marketing Labs, who may be at medium and small tier, they should quickly partner up with other firms to increase their value.
• Customers of crayon, Drillteam, and Stepchange should request agnostic recommendations. Any client of these three agencies should make sure that the strategy they are being offered includes other vendors and platforms not just the Powered platform and Facebook platform. Remember, first find out where your customers are online before choosing the tools to use.
• This is competition for larger agencies yet savvy agencies will partner. This is a threat to large agencies like Organic, Razorfish, Ogilvy, and Edelman. Yet the smart agencies won't get defensive, they should partner with this team, and figure out what offerings they can offer that they don't have in their portfolio.

Congrats to the Powered, crayon, Drilldteam and Stepchange team for this merger, I'm excited to see the industry emerge from small disparate startups to a larger entity going forward.

Dallas Lawrence is Chair of the Social and Digital Media Practice at Levick Strategic Communications, the nation's top crisis communications firm. He blogs on emerging digital media trends and best practices for social media engagement on Bulletproof Blog. Connect with him on Twitter @dallaslawrence.

Social networks have truly come of age in the last year. No longer viewed as lonely outposts for youthful college slackers, the reach of these platforms has grown exponentially. Today, more than two-thirds of the world's Internet users visit the social networking sites that reel in billions of eyeballs every 24 hours.

Yet, despite the staggering growth of social networking, determining how to monetize social media platforms remains a tough code to crack for even the savviest of companies. As such, identifying new revenue models will be instrumental in kicking off the next cycle of the social networking phenomenon in 2010.

If Anyone Can Do It, Facebook Can

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Facebook, social networking's acknowledged leader, has surpassed every platform on the market today, corralling more than 350 million unique users globally. If any social network is poised to design a winning formula for successful revenue streams in 2010, it's Facebook. CEO Mark Zuckerberg has set an aggressive agenda for the company, publically stating that he expects social networks to become as essential as web browsers and operating systems, and he has set the lofty yet entirely realistic goal of 1 billion users worldwide.

In the less than five years since it expanded beyond scholastic audiences, Facebook has not only grabbed the lion's share of users, it has engaged them like no other platform on the Internet. The average Facebook user visits the site at least once a day and spends an astounding 55 minutes engaging friends and family - statistics that another Zucker (Jeff) would probably kill for over at NBC.

While translating such popularity into dollars and cents isn't easy - especially in an industry whose users have grown accustomed to getting something for nothing - Facebook could potentially provide a monetization template that would revolutionize social networking as we know it.

The Next Level of Advertising Revenue

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Advertising has traditionally provided the simplest means of generating revenue. PricewaterhouseCoopers reported in October that Internet advertising revenues totaled $10.9 billion for the first half of 2009. It's been estimated that Facebook alone took in $435 million of that total. But for a site with nearly half a billion users, a quarter of which spend more time within the network than watching television, these numbers represent just the beginning potential.

First, Facebook needs to admit to itself that it is in the business of selling ads. By better managing its advertising network, intelligently expanding its marketing options, and developing workable social ads that leverage the branding power of friends and connections, Facebook can begin to capture its rightful share of online ad revenues. The final piece is to increase awareness and understanding of Facebook ads among corporate decision makers.

For example, every executive in America today understands the value of purchasing Google ads - and that didn't happen by accident. Google understood that what caused it to dominate online search wasn't going to ultimately position the company as a global corporate powerhouse valued at nearly $200 billion. Google's aggressive marketing, communications, and lobbying shops have worked to ensure every ad buyer, political campaign, marketing executive, and public relations flack knows the value of the service and has direct and easy access to account executives who explain the much worshiped ROI Google ads provide.

Today, Facebook stands on the precipice Google inhabited just before it became a top money-maker. By taking a page from the Google playbook, and aggressively marketing and explaining its power to influence buying decisions, Facebook ads could become as essential to 21st Century marketing as the yellow pages were in the 20th Century.

E-Commerce Stop Sending Customers Away

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The launch of Facebook as a true e-commerce site holds immense potential as a business solution and could forever change the way we shop. Online purchases through the first three quarters of 2009 totaled $98.3 billion according to the Department of Commerce. For the majority of companies selling products online who are also engaged on Facebook, opening Facebook fully to direct e-commerce transactions will dramatically change how businesses advertise and how consumers buy goods online.

Consumers and companies would flock to a Facebook storefront for one simple reason: We do everything else there. Imagine an integrated, one-click solution whereby your friends see your recent purchases (because you were incentivized by the brand to share your information) in their feed and are able to simply point, click, and purchase the same item.

With a few adjustments, companies can make timely offers of birthday gifts for friends, travel arrangements for event items, or the latest music from favorite artists - and make the sale without forcing the user to leave Facebook or put in new login information.

Rather than driving their 350 million users away from the platform to close the deal with retailers and purchase the item on an external platform, Facebook could benefit financially by charging companies a percentage of sales, a fixed rate to have a storefront, or from increased advertising opportunities.

Premium Subscription Options

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Finally, whether users like it or not, Facebook will do itself a long term disservice if it does not consider premium subscription options. Users (whether they are corporations or teenagers) are amenable to paying for even the simplest features and functionality, as evidenced by the success of Facebook gifts.

Nothing good in life is free. It's a stark, mature reality that Facebook (and its users) need to face in 2010. By leveraging economies of scale, Facebook can churn a sizable profit without alienating users. Would you pay one dollar a month to share higher-resolution photos or upload higher-quality or longer videos? Last month, 2.5 billion photos were uploaded to Facebook. Even if only a quarter of the site's active users opted for premium options, this one change would generate more than $1 billion in annual revenues.

Improving advertising, developing an e-commerce platform, and adding subscription services will not only generate the revenue necessary to make the transition from highly adopted to highly profitable, it will open revenue streams as Google did before for the next generation of digital developments.

More business resources from Mashable:

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- Social Media Marketing: How Pepsi Got It Right
- 5 Ways Small Businesses Can Avoid Social Media Panic
- HOW TO: Take Advantage of Social Media in Your E-mail Marketing
- HOW TO: Implement a Social Media Business Strategy
- 18 Online Productivity Tools for Your Business

Image courtesy of iStockphoto, peterspiro

Tags: advertising, business, e-commerce, facebook, MARKETING, monetization, monetizing, money, social media, social networks

The iPad And The World Of Tomorrow

For those who spent yesterday glued to the State of the Union address instead of tech news feeds, Gizmodo has a terrific summary of Apple's new device. To break it down: The iPad looks basically like an iPhone, but with a 9.7 inch screen. It runs the same software as the iPhone, can connect to the internet, and seems to work nicely for reading books, newspapers and magazines, watching video, checking Google maps, reading your email, surfing the web, and casual gaming. Like the iPhone, it has no keyboard - you can touch-type on the screen.

Why is this outsize version of the iPhone so important that the internet basically exploded over it yesterday? Mostly because Apple's last two new mobile devices - the iPod and the iPhone - changed the way people think about computers. They really did change the future, by making it glaringly obvious that computing devices are not all desktop PCs - they can be specialized music players, or telephone/internet toys that put the web in your pocket. They are the beautiful, cool poster gadgets for the mobile computer generation; they are what we imagine when we think of tomorrow's machines.

The Mythical Convergence Device

The iPad promises to be just as revolutionary as its predecessors, for one reason. It embodies, as much as possible, the mythical convergence device that technophiles have been craving for almost two decades. The convergence device, which people began to discuss seriously in the 1990s, would be a unified gadget where you could consume many kinds of media, especially TV and the web, with the same gadget.

This is exactly what the iPad does, helped along by the fact that so much television is available online already. And you can add books to this convergence, too (the iPad even has a Kindle app). The iPad is also the perfect shape for a convergence box. Its screen is about the size of a quality paperback or small television set. There's none of that scrunching your forehead as you peer into the teeny screen of the iPhone to read a book or watch YouTube.

What I'm saying is that the iPad appeals to a very deep and longlived fantasy in the consumer electronics world: A device that does it all. At least, if all you want to do is consume media.

And there's the problem.

Reinventing The Television

Apple is marketing the iPad as a computer, when really it's nothing more than a media-consumption device - a convergence television, if you will. Think of it this way: One of the fundamental attributes of computers is that they are interactive and reconfigurable. You can change the way a computer behaves at a very deep level. Interactivity on the iPad consists of touching icons on the screen to change which application you're using. Hardly more interactive than changing channels on a TV. Sure, you can compose a short email or text message; you can use the Brushes app to draw a sketch. But those activities are not the same thing as programming the device to do something new. Unlike a computer, the iPad is simply not reconfigurable.

The iPad emulates television in another way, too: You can channel surf through the Apps Store, but you can't change what's playing. Every single app that's available for the iPad has to be approved by Apple first, just like apps for iPhones. That means censorship of "offensive" apps, no apps that compete with Apple (i.e., no Google Voice), and no random app you wrote to do whatever obscure shit you want to do. So you've got thousands of channels and nothing on. And because you can't reconfigure the iPad, you can't change that. You can only keep flipping through the channels, hoping in vain to see something other than reruns of Cheaters and Alf.

As futurist Jamais Cascio told io9:

This is Apple's big push of its top-down control over applications into the general-purpose computing world. The only applications that will work with the iPad are those approved by Apple, under very opaque conditions. On a phone, that's borderline acceptable, but it's not for something that is positioned to overlap with regular computers.

The iPad has all the problems of television, with none of the benefits of computers.

Back To The Shopping Mall

So if it's not a computer, what exactly is the iPad? It could be just a really tarted-up ebook reader, which would make sense if you consider that the iPad is competing with Amazon's Kindle. So it's a reinvention of the book, a fairly old technology, but in a gleaming new package. Except that package isn't even very new, as futurist and science fiction author Karl Schroeder pointed out. He told io9 that the iPad isn't about brilliant hardware innovation, and that in fact the device doesn't even use state-of-the-art ebook tech like e-ink.

Speaking to us via email, Schroeder said:

What Apple has done (again) is seize the moment with a combination of a device and a business model . . . even if e-ink provides a better reading experience for books (reading on an iPad will continue to literally mean staring into a lamp, just like reading on a computer screen), it doesn't matter because it's the total package of iTunes, iBookstore, 3G, games, apps etc. that will pull ebook readers along with it. Consider that the iPad is a closed platform that doesn't even multitask; if the technology mattered, those would be major considerations for the buyer. But they won't be, because when you buy an iPad, you buy access to the whole Apple business ecology.

Looked at from this angle, the iPad isn't so much new technology as it is a shiny, pretty doorway to a mall where you can buy everything from books to movies.

The iPad hasn't brought us forward into the future. It's taken us backward to a world of strip malls and televisions.

Another Vision Of The Future

So the iPad takes us back to the 1980s, or maybe even the 1950s. It's likely to be a device that changes our future, but what that means is we're facing a tomorrow where true innovation is sidelined by a device that represents a convergence of old media and shopping.

But as John Connor would say, we can change the future. That might be as simple as pushing Apple to change its App Store policies to make iPads less like TVs and more like computers. As Lifehacker's Adam Pash put it, "The App Store isn't exactly the problem-it's the way Apple runs and limits the App Store." He suggests that Apple could create a special "Restricted section" for its App Store. He continues:

Rather than reject applications that it feels may confuse the user (like they claimed Google Voice or Google Latitude might), or applications that allow users to access naughty pictures, or even applications that it hasn't had time to vet for the App Store proper, [Apple] put those applications in the Restricted section. Before a user is able to install applications from the Restricted section, that user has to agree that the application may confuse their feeble minds, offend their delicate sensibilities, or even slow down their device. Is this such a problem? . . . Even better, [the iPad] could work like the package manager it actually is and allow users to add their own trusted repositories as sources for other applications . . . The point is, users should at least be allowed to flip some switch, somewhere on the machine, that says, "Hey computer, I'm an adult, and I take responsibility over how I use this machine."

A convergence device that can also be reprogrammed the way computers can? Now we're in the twenty-first century.

Another possibility would be for developers and investors to focus on hardware that truly is innovative and futuristic. Schroeder says:

There's really nothing in the iPad that's new; if you want truly new, disruptive tech that would be at a similar price point if commercialized, look at Pranav Mistry's SixthSense and related projects.

SixthSense is a gesture-controlled mobile device with a projector - you can see its telephone app at work above. You project the phone onto your hand and press the buttons. You can also use gestures to take pictures. This is truly the next step in mobile computing, and will likely revolutionize computer networks in ways we can't yet imagine.

What Is To Be Done?

I know a lot of otherwise-savvy consumers and hackers who are already drooling over the iPad and putting in their orders. They hate the idea of a restricted device, but they love the shiny-shiny. I'm not saying that they should deprive themselves of this pretty new toy. What I am saying is that this toy represents a crappy, pathetic future. It is no more revolutionary than those expensive, hot boots I bought at Fluevog, and only slightly more useful.

The only way iPads can truly become futuristic devices is if we hack them so that we can pour whatever operating system we want inside. We need to jailbreak these media boxes so we can install the apps we want, not the ones provided by the Apple shopping mall.

Do not be content with a television when you can have a computer.

Do not be content with yesterday's machines, because the future is before you. Ready to be hacked.

I will do a more comprehensive year in review for Cyberlaw generally, but I thought it would be fun to take a close look at how 47 USC 230 fared in 2009. This is the first full calendar year following the Ninth Circuit's en banc Roommates.com opinion, and many of us initially feared that the case would create a huge hole in 230's otherwise solid immunity. As it turns out, those concerns have not come to pass. If anything, 2009 shows us just how strong the immunity remains.

I blogged on a total of 22 cases issued in 2009 that discussed the statute. (I blog on every case I see that substantively discusses 47 USC 230). I blogged on other cases in 2009 that were decided before 2009, such as the Woodhull v. Meinel case from October 2008 and DC v. Harvard-Westlake, a 2007 arbitrator's dismissal that came to light in 2009.

Of the 22 calendar year 2009 cases, I would classify 14 of them (63%) as easy defense wins, frequently on a 12(b)(6) motion to dismiss or state law equivalent. Even many of the remaining 8 cases contained good news for defendants. For example, in Shiamili, the defense inexplicably lost at the district court level but got an easy reversal on appeal. The Stayart court granted Yahoo an easy defense win, although co-defendant Various didn't get the 230 ruling. Similarly, the Barnes case granted the defense an easy 230 win on one theory (negligent undertaking) but denied 230 for a different one (promissory estoppel). The Certain Approval Process case said 230 did not prevent the plaintiff from amending the complaint to add a cause of action, but once added, the court instantly zapped the claim on other grounds.

This leaves four unambiguous 230 defense losses in 2009. The leading 230 defense loss was the Tenth Circuit FTC v. Accusearch case, which held a retailer liable for reselling illicit phone records. The other major 230 defense loss was the NPS v. StubHub case, which held that 230 may not apply to a lawsuit over the alleged illegal ticket scalping by StubHub's sellers. Both of these cases involve the retailing of illegal items, suggesting that 230's boundaries may not reach that far.

The other two defense losses are less consequential. The Project Playlist held that 230 does not preempt state IP law claims, a conclusion that deserves note only because the Ninth Circuit held otherwise in the 2007 ccBill case. I believe that no other courts will follow the Ninth Circuit's rule that 230 preempts state IP laws, making the Project Playlist ruling unsurprising.

In People v. Gourlay, a web host was denied a 230 defense to a criminal prosecution for child molestation- and child pornography-related claims. This case turns mostly on the web host's active role creating the child pornography (as well as the host's molestation of the child actor); with that context, this case may have little influence on other cases. Indeed, the court made clear that web hosts providing standard web hosting services could fully qualify for 230 protection against a state criminal prosecution of child pornography dissemination.

In reverse chronological order, a brief overview of the 230 cases from 2009:

Nemet Chevrolet v. ConsumerAffairs.com (4th Cir. Dec. 29, 2009). One of three federal appellate court 230(c)(1) rulings in 2009 (Barnes and Accusearch are the others). A solid defense win for a consumer review website. The plaintiff's claims that the website contributed to the reviews' development and fabricated reviews were tossed on a 12(b)(6) motion to dismiss.

Shiamili v. Real Estate Group (N.Y. App. Div. Dec. 17, 2009). In an unpublicized January 2009 decision, the trial court denied a website's 230 dismissal request for claims based on user-supplied comments. In December, this error was fixed on appeal despite allegations that the website chooses and administers the user content.

Dart v. Craigslist (N.D. Ill. Oct. 20, 2009). Craigslist got a big win in its ongoing battles with various government agencies over prostitution ads on Craigslist when the court held it wasn't liable for those ads.

Riggs v. MySpace (C.D. Cal. Sept. 17, 2009). A goofy case. The court holds that MySpace's deletion of Riggs' account was protected by 230(c)(1) on the apparent theory that Riggs (the plaintiff) was the third party supplier of the deleted content. This case would make more sense as a 230(c)(2) case.

Finkel v. Facebook (N.Y. Sup. Ct. Sept. 15, 2009). Facebook wasn't liable for the contents of a user's private group even though Facebook placed a copyright notice on the page.

Intellect Art v. Milewski (N.Y. Sup. Ct. Sept. 15, 2009). Ripoff Report wins again.

Stayart v. Yahoo (E.D. Wis. Aug. 28, 2009). An convoluted, and possibly confused, ruling that Yahoo wasn't liable for search results snippets. However, Various was denied 230 because it may have originated the content in question.

Cornelius v. DeLuca (E.D. Mo. Aug. 18, 2009). An online retailer wasn't liable for user-supplied comments despite a conspiracy allegation.

Goddard v. Google (N.D. Cal. July 30, 2009). This is a follow-on ruling to an important December 2008 ruling in this case, which dismissed the plaintiff's complaints but gave the plaintiffs another chance. The December 2008 ruling is one of the most interesting and important decisions interpreting Roommates.com. In the July ruling, the judge again found that 230 insulates Google from liability due to allegedly fraudulent ads run through its network and granted a final dismissal.

Doe II v. MySpace (Cal. App. Ct. June 30, 2009). MySpace isn't liable for users' sexual assaults on other users.

FTC v. Accusearch (10th Cir. June 29, 2009). The second of three federal appellate court rulings on 230(c)(1). The defendant was an online retailer of illegal phone records. The retailer claimed that the phone records came from third party suppliers and therefore 230 immunized the retailer from liability associated with the records. The court echoed the Ninth Circuit's Roommates.com decision, effectively extending that case to the Tenth Circuit, and said that the retailer was responsible for selling the illicit phone records despite 230.

Zango v. Kaspersky (9th Cir. June 25, 2009). This is the only 2009 ruling addressing 47 USC 230(c)(2), the overshadowed and frequently overlooked sibling of 230(c)(1). Despite the rarity of 230(c)(2) cases, this case could be fairly influential. The Ninth Circuit held that 230(c)(2) protected an anti-spyware software vendor's decision to classify software as a threat. If you missed it, you might want to take a look at my presentation slides on 230(c)(2), which distill my deep look at 230(c)(2) this summer.

Gibson v. Craigslist (S.D.N.Y. June 15, 2009). Craigslist isn't liable for physical injury caused by a gun purchased via a Craigslist ad.

Doe IX v. MySpace (E.D. Tex. May 22, 2009). MySpace isn't liable for users' sexual assaults on other users.

Barnes v. Yahoo (9th Cir. May 7, 2009; amended opinion June 22, 2009). The third of three federal appellate court opinions on 230(c)(1). The Ninth Circuit held that 230 preempted a claim against a service provider for negligently delaying the removal of user content (essentially, Zeran redux), but 230 did not preempt a promissory estoppel claim based on promises the service provider made to the person requesting takedown. The initial Ninth Circuit opinion had two other unfortunate digressions: (1) it said that 230 was an affirmative defense that did not support a 12(b)(6) motion to dismiss, and (2) the opinion had ambiguous language implying that 230 preempted only state claims, not federal claims. The amended opinion helpfully eliminated both digressions.

Atlantic Records v. Project Playlist (S.D.N.Y. March 25, 2009). 230 does not preempt a state IP claimin this case, a violation of state copyright law for pre-1972 sound recordings.

Joyner v. Lazzareschi (Cal. App. Ct. March 18, 2009). A message board operator wasn't liable for user posts.

Raggi v. Las Vegas Police (D. Nev. March 10, 2009). A union wasn't liable for messages that union members posted on the union-operated message board.

Certain Approval Programs v. Xcentric Ventures (D. Ariz. March 9, 2009). 230 did not bar amending a complaint to add a new cause of action when the plaintiff also adequately alleged that the Ripoff Report contributed to the creation and development of the content at issue.

People v. Gourlay (Mich. App. Ct. March 3, 2009). This case involves the prosecution of a pornographic web host who also molested the child actor. The web host asserted a 230 defense in trying to overturn the conviction for the charges related to pornography dissemination. Although 230 can preempt state criminal prosecutions, and web hosts are protected by 230 for their ordinary web hosting activities, this web host actively participated in the site's development and therefore lost 230's protection.

NPS v. StubHub (Mass. Super. Ct. Jan. 26, 2009). In a long-running battle between the New England Patriots and season ticketholders who want to resell their tickets via StubHub, StubHub was denied summary judgment on 230 grounds. The court cites Roommates.com in saying that StubHub may have contributed to illegal ticket scalping sufficient to potentially disqualify it for 230 protection.

GW Equity v. Xcentric Ventures (N.D. Tex. Jan. 9, 2009). Ripoff Report is protected by 230 even though it offers pull-down menus and manipulates user-submitted reports.

Nemet Chevrolet Ltd. v. ConsumerAffairs.com, Inc., No. 08-2097 (4th Cir. Dec. 29, 2009)

Introduction

Citing 47 USC 230, today the Fourth Circuit upheld a 12(b)(6) dismissal of defamation and related claims against a consumer review website. This case is noteworthy because the court rejected some common allegations that plaintiffs make to evade 230, so this case may help defendants get 12(b)(6) motions to dismiss more easily.

ConsumerAffairs.com is a consumer review website with a twist: it works in conjunction with a law firm that mines the submitted complaints for potential class action lawsuits. In June 2008, I blogged about the district court's 12(b)(6) dismissal of the case.

Development of the Reviews

Nemet tried two tactics in its complaint to draft around 230. First, it alleged that ConsumerAffairs.com partially developed 20 reviews. Nemet pled:

Upon information and belief, Defendant participated in the preparation of this complaint by soliciting the complaint, steering the complaint into a specific category designed to attract attention by consumer class action lawyers, contacting the consumer to ask questions about the complaint and to help her draft or revise her complaint, and promising the consumer that she could obtain some financial recovery by joining a class action lawsuit. Defendant is therefore responsible, in whole or in part, for developing the substance and content of the false complaint . . . about the Plaintiffs.

These allegations do not survive a 12(b)(6) motion to dismiss.

* the website "structure and design" argument fails, despite Nemet's attempt to invoke Roommates.com, because ConsumerAffairs' structure was not illegal. To me, the court's discussion reinforces that Roommates.com' real holding is If you don't encourage illegal content, or design your website to require users to input illegal content, you will be immune. Chalk this case up as yet another citation of Roommates.com for the defense.

* Asking users questions about their posts does not qualify as development.

* The unsupported assertion that ConsumerAffairs edited posts did not pass the Iqbal standard. Plus, as Zeran indicated, 230 protects editorial decisions, so the allegations needed to assert some editing beyond this protected zone.

Review Fabrication

Second, Nemet alleged that ConsumerAffairs fabricated 8 reviews. Nemet pled:

Because Plaintiffs cannot confirm that the [customer] complaint . . . was even created by a Nemet Motors Customer based on the date, model of car, and first name, Plaintiffs believe that the complaint. . . was fabricated by the Defendant for the purpose of attracting other consumer complaints. By authoring the complaint . . . the Defendant was therefore responsible for the substance and content of the complaint.

This allegation has an obvious (and IMO embarrassing) logic flaw. Even if Nemet can't use its records to validate the facts in a consumer review, ConsumerAffairs.com's fabrication of the post is only one of many possible explanations. The court notes some other possible explanations: "the post could be anonymous, falsified by the consumer, or simply missed by Nemet." (I would also add the possibility of weak recordkeeping by Nemet). To try to get around this logical deficiency, Nemet marshals up some additional allegations:

(1) that Nemet has an excellent professional reputation, (2) none of the consumer complaints at issue have been reported to or acted upon by the New York City Department of Consumer Affairs, (3) Consumeraffairs.com's sole source of income is advertising and this advertising is tied to its webpage content, and (4) some of the posts on Consumeraffairs.com's website appeared online after their listed creation date

But all of these facts are non-sequiturs; none of them show that ConsumerAffairs fabricated the posts, and post-Iqbal these allegations are not enough to state a claim. The dissent disagreed with this conclusion (about the alleged fabrication) and would have allowed those claims to proceed.

230 as an Immunity Redux

In FN 4, the court notes that the Seventh Circuit questioned if 230(c)(1) was just a definitional section. Citing Zeran, which addressed this issue explicitly, the court says "Of whatever academic interest that distinction may be, our Circuit clearly views the 230 provision as an immunity:" As a result, the court "aim[s] to resolve the question of 230 immunity at the earliest possible stage of the case because that immunity protects websites not only from 'ultimate liability,' but also from 'having to fight costly and protracted legal battles.'" It looks like there could be a brewing catfight between circuits over whether 230(c)(1) is an immunity, an affirmative defense, a definitional section or something else.

Conclusion

Given that this court was bound by the Zeran precedent, it's perhaps not surprising that the court found 230 protection for a consumer review website. Nevertheless, by rejecting another plaintiff's attempt to make hay from Roommates.com and rejecting weakly supported allegations of fabrication, this court gave defendants even more support to fend off claims that are, at their core, based on third party content.

The updated census of Roommates.com citations:

Roommates.com Cited for Defense (11 cases): GW Equity v. Xcentric, Best Western v. Furber, Goddard v. Google (and second ruling) Joyner v. Lazzareschi, Atlantic Records v. Project Playlist, Barnes v. Yahoo (note: although the case was a partial loss for the defendant, the Roommates.com discussion came in the defense-favorable part), Doe IX v. MySpace, Doe II v. MySpace, Dart v. Craigslist, Shiamili v. Real Estate Group, Nemet v. ConsumerAffairs

Roommates.com Cited for Plaintiff (2 cases): NPS v. StubHub, FTC v. Accusearch

King Pharmaceuticals, Inc., v ZymoGenetics, Inc., 2009 WL 4931238 (E.D. Tenn. Dec. 10, 2009). Seattle Trademark Lawyer has some background.

This case involves the cutthroat (sorry) world of blood clotting drugs. King Pharmaceuticals sells bovine (cow) thrombin, a clotting agent. ZymoGenetics sells thrombin made from hamster ovaries and snake venom. ZymoGenetics' version has been making inroads on the thrombin market, and King isn't too pleased about that. King claims that its dropping market share is due to several bad acts on ZymoGenetics's part, including ZymoGenetics' AdWords campaign that included the King trademark "Thrombin-JM" as a keyword.

Blaming illegitimate AdWords for King's dropping market share seemed particularly implausible for two reasons. First, the product is purely B2B and has no consumer-facing side. It's used for post-surgery recuperation, so doctors/hospitals are the target customers--and for professional and liability reasons, they are pretty careful about what they prescribe to patients. So if the AdWords ads have helped facilitate doctor switching, it's more likely due to doctors learning of a new drug that doesn't have some of cow thrombin's negative side effects than any marketplace mistake over brands or other "unfair" diversion.

Second, the AdWords ads produced a trivial number of clicks. ZymoGenetics reports that it got 84 clicks on "Thrombin-JM" (and only 803 on the generic term "thrombin"). The court doesn't expressly guffaw at King for fighting over 84 clicks, but I can hear a snicker or two in the opinion. Not surprisingly given the minuscule volume of clicks, ZymoGenetics voluntarily dropped the competitive keyword purchase when it learned of King's lawsuit (it wasn't giving up much), and it agreed not to buy the keyword again. King pressed for a preliminary injunction to forcibly hold ZymoGenetics to its word, which many courts will issue in these situations, but this court decides that ZymoGenetics' promise is good enough and denied the preliminary injunction.

Now, King was going to court to redress ZymoGenetics' perceived transgressions no matter what, so it would be a little unfair to beat up on them for litigating over 84 clicks. However, this case is yet another example of how competitive AdWord lawsuits often are ridiculous overkill given the economic value at issue. (Related examples are 1-800 JR Cigar, which involved $345 of revenue, and Storus, which involved 1,374 clicks over an 11 month period). It's a good reminder to trademark owners to be smart with their litigation dollars!

The week before Thanksgiving, I attended an unusual symposium sponsored by the University of Denver Law Review entitled Cyber Civil Rights: New Challenges for Civil Rights and Civil Liberties in our Networked Age. The symposium covered standard Cyberlaw topics, but the raison d'tre was University of Maryland law professor Danielle Citron's two recent articles on online harassment of women: "Law's Expressive Value in Combating Cyber Gender Harassment" (Michigan Law Review) and "Cyber Civil Rights" (Boston University Law Review). It is unusual for a law school to celebrate another school's professor and her research, especially when the professor is fairly junior. Nevertheless, Danielle's participation brought together academics from both the Cyberlaw and civil rights communities, which provided a rare and interesting mix of folks..

First Panel

Danielle Citron started off by recapping her two papers. Online participation, such as blogging, is essential to professional standing, and employers are reviewing online profiles of prospective employees as part of their hiring considerations. However, women are being targeted for abuse online. These attacks are harming women by changing their online and offline activities, reducing their job opportunities, and causing women to change their gender representations online. Further, folks are trivializing these problems. Women are underreporting the attacks, and law enforcement only intervenes when there are offline harms. New laws can serve an expressive function to communicate that online attacks against women are socially unacceptable. The new laws can validate women's feelings that they have been harmed and encourage law enforcement to pursue more cases.

Commenting on the papers, Robert Kaczorowski of Fordham Law (and Danielle's stepdad) made an extended analogy between the Ku Klux Klan and cybermobs.

Wendy Seltzer asked if we could deemphasize the effect of words rather than prohibit them. Danielle responded that we don't know how seriously to take any particular threat.

An audience member asked if is there a difference between mobs and individual actors who are just taking advantage of being anonymous. Danielle answered that groups can become more extreme online. I think this point deserves more exploration: a series of uncoordinated individual decisions to pile on to an attack can look like a coordinated attack to the victim. This is part of why I thought the KKK references were puzzlingKKK activities are clearly coordinated, while online attacks against women can succeed without any coordination or ongoing connection between the attackers.

Paul Ohm argued that that legal solutions are better for cyber civil rights problems than technological solutions. Paul discussed what he labeled Felten's Third Law. (He doesn't know of two earlier laws named for Ed Felten; he just assumes they exist given Ed's impressive and influential oeuvre). As articulated by Paul, Felten's Third Law is that in Cyberlaw conflicts, lawyers love technical solutions and technologists love legal solutions. In other words, we love the solution we don't know because we assume it has to be better than the one we do. As both a law professor and technologist, Paul picks law over technology for these problems.

Paul categorically rejects any technical solution that would create a fully identified Internet. For example, we should not mandate server log retention because we know the logs will be co-opted to regulate other forms of unwanted content, not just online harassment.

Wendy Seltzer discussed the unintended consequences of legal intervention. For example, mandatory Internet filtering in school libraries hasn't stopped kids from bypassing the filters, but it has facilitated a marketplace for improving filtering technologies that has benefited repressive regimes. Another example: anti-circumvention technology fails to restrict copying but has reduced innovation around DRMed content. Wendy also noted how norms can help curb abuses. For example, while there are online cesspools, she praised Wikipedia's evolving guidelines for living people's biographies.

In response, Danielle admitted that her solutions need to be more surgical. She said she might consider moving from a notice-and-takedown model to a notice-and-preserve model for intermediaries.

Second Panel

This panel was composed of three women academics from the civil rights community, so it was a noticeable shift from the typical Cyberlaw academic discussion.

Mary Anne Franks is a University of Chicago Bigelow Fellow and soon-to-be full-time law professor. She expresses our collective disappointment that cyberspace isn't a utopia that allows people to escape offline discrimination and harassment. She laments that women can lose control of their identities online, such as when someone creates a fake online profile in their names.

She then addressed how cyberspace is unique/special/different with respect to gender harassment. Many commentators try to duck cyberspace exceptionalism, so it was refreshing to see her tackle the issue squarely. Existing offline discrimination/harassment laws assume interactions between repeat players at work and school; online harassment can be divorced totally from any existing social networks. However, because the online activities still harm targeted individuals at work and school, we should treat the harms the same. Offline, there are switching costs to changing jobs or school; online, search engines' consolidation of results for search on a person's name creates a different type of switching cost. In terms of supervisory power, she thinks web operators have analogous control to employers or school administrators. Thus, when web operators receive notice of online harassment, they should have a duty to do something about it. Offline, employers can develop a variety of responses and policies to combat workplace harassment. Web operators should have similar latitude; for example, they can delete offending posts or suspend/ban accounts.

Helen Norton, a University of Colorado law professor, did not share Danielle's optimism (expressed in her first article) that existing discrimination laws can curb online harassment. Instead, Helen thinks a new civil rights statute is needed, but she might limit its remedies to exclude money damages. Helen is pessimistic that there will be regulation any time soon, noting that it can take years to enact civil rights legislation. Helen would also like to see more precise definitions of the exact harms that women are experiencing only online.

Nancy Ehrenreich, a Denver University law professor, began her talk by saying that we should not overstate the Internet's benefits. She then clarified that we should not assume that disadvantaged folks can overcome barriers online. For example, we impose cultural categories on people in every interaction, so even if people try to mask their identity online, they can't really escape. She wondered why we aren't talking about an anti-discrimination law for the web. Her concern is that discrimination denies individuals access to the Internet.

In Q&A, Paul Ohm observed that civil rights scholars often invoke free speech as the countervailing concern to their desired regulations, but Cyberlaw scholars are often more interested in other generative effects of the Internet, such as new business models, new labor models and new modes of production.

Panel 3

James Grimmelmann (see his slides) started with the Skanks in NYC case. In that case, the defendant criticized someone else in her social network on a blog, calling the plaintiff (among other unflattering things) a skank. The plaintiff sued to obtain the blogger's identity. After a successful unmasking, the plaintiff dropped the lawsuit, having successfully publicly shamed the blogger.

James hypothesized that this unmasking and shaming was an appropriate remedythe blogger got shamed (like an eye for an eye), and unmasking is a better outcome than other legal remedies like damage suits. James then posited a thought exercise that provided plaintiffs with an expedited unmasking procedure if they drop any damages claim. This would have a number of benefits. Unmasking curbs online harassment is especially effective at busting online mobs. Also, an unmasking remedy avoids messy debates over the First Amendment's scope, and it may be more desirable than trying to hold online providers liable.

Having advanced his own strawman, James then cut it down. In some cases, defamation remedies may be more desirable, and plaintiffs may not know that until they learn the putative wrongdoer's identity. In other cases, plaintiffs who just want unmasking would appreciate a lower legal hurdle. Also, we provide legal protection for anonymity for good reasons.

James' lessons from the thought exercise: we should consider ways to decouple an unmasking remedy from litigation. At the same time, we need to protect defendants from pretextual unmasking; in some cases, retaliation is a big concern, and we should incorporate this concern into the unmasking decision.

From Chris Wolf's talk (see his full remarks), the most interesting thing I learned is that 18 states have laws banning wearing masks in public, enacted to suppress KKK activities. This was the second speaker's KKK reference of the day, and it made me wonder if we were experiencing some variation of Godwin's Law.

Panel 4

Viva Moffat observed that secondary liability issues generate the most heat in online harassment discussions. She expressed concern that imposing legal duties on third parties may not help law's norm-shaping effect, and it's not appropriate to impose liability just because the provider has deeper pockets or the direct actor can't be found. She also suggested that imposing liability on third parties creates a greater risk of collateral damage than direct liability. [Note: I would like to know more about this last assertion. I suspect we cannot make a utilitarian calculation a priori]. As a result, she favors focusing more efforts on sharpening direct liability.

Ed Felten talked about identifying and anonymizing online activity. He explained the usual sequence of events in chasing bad online content:

log file => IP address => identity => justice

But the IP address => identity step breaks down when users use an anonymizing proxy or the user's network uses network address translation (used by home wireless routers or in coffee shops) and all connected devices' requests share a single IP address. He said that a majority of Internet connections use NAT.

Because IP address tracebacks can dead-end at the intermediary, an IP address can reveal too little information. However, even when users aren't investigatory targets, IP addresses can reveal too much information, such as geolocation. This paradoxIP addresses simultaneously reveal both too much and too little informationreflects that the IP address system was built for routing, not identification. So could we design a better authenticating technology?

He then conducted a semi-realistic thought experiment of a new technological tag that could be used instead of IP addresses. This tag could have the following attributes:

* can be placed by any intermediary
* conveys no information about the sender unless unwrapped by the intermediary (presumably for good legal cause)
* unwrapping the tag yields the best identity information the intermediary has
* the tag's use is voluntary as a technical matter
* the tag is removable as a technical matter

I then batted clean-up. A summary of my remarks:

Today's conversation has revisited long-standing Cyberlaw issues, such as:

* anonymity v. accountability, and who should be responsible for online content and actions
* cyberspace as a physical place. See, e.g., Noah v. AOL (an online discrimination case), National Federation of the Blind v. Target (also an online discrimination case) and Estavillo v. Sony
* cyberspace exceptionalism and cyberspace utopianism (on the latter point, see my article on search engine utopianism)
* when is the optimal time to regulate rapidly evolving technology? Early, when the technology is still in its infancy, or later, when market forces and new technological evolutions may have cured the early problems?

Danielle's articles convinced me that women are experiencing serious harms online that menincluding mecould easily trivialize. Danielle's articles also convinced me that online harassment has strong parallels to the 1970s legal evolution of workplace harassment doctrines, where a big part of the battle was to get people to take the harms seriously.

While I find a lot of descriptive value in Danielle's work, the normative implications are not as clear. As usual with attempts to regulate rapidly evolving technology, there are many important but overwhelmingly hard definitional challenges, such as who is an intermediary, what are online mobs and what constitutes online harassment. For example, I do not think the Skanks in NYC incident is an online harassment case or an attack, but James Grimmelmann's talk assumed those characterizations.

While we can debate what should be the right level of regulatory intervention, we should not overlook that Congress already enacted a law squarely governing intermediary liability for online harassment: 47 USC 230. The angst that prompted this conferencebad behavior onlineis the logical consequences of 230's broad immunity. The statute enables websites to adopt policies that they will not police user content or retain server logs of user activity. These choices aren't a surprise or a per se abuse of the immunity; instead, they are the unavoidable implications of Congress' action.

We might question Congress' wisdom in adopting 230, but we should not diminish its potential importance to the Internet as we know it. [In Q&A, Chris Wolf asked about the comparative experience in countries that don't have such broad immunity. In those countries, we know that websites take down user content much more freely, and I believe that the most interesting UGC innovations are all taking place here in the US, not countries with more restrictive UGC liability.] I can, at most, only prove correlation and not causation, but I believe 230 is one of the main causal reasons why the Internet has succeeded so well.

When I speak around the country about 230, I often encounter folks who generally accept 230's immunity scope but want just one new exception, i.e., their pet topic. If everyone got their just one exception, the law would be eviscerated. (I said it would be Swiss-cheesed to death; maybe I should have said it would be overcome by a thousand duck bites). I'm not rejecting new exceptions categorically (they should be each considered on their own merits), but in aggregate 230's immunization benefits are actually quite precarious. I believe 230 works precisely because of its strength and simplicity, so adding more exceptions could significantly reduce its efficacy.

I concluded my remarks by observing that online harassment is a subspecies of bullying and incivil behavior in our society. While we can and should work to curb online harassment, I am more interested in addressing bullying and incivility in all its forms, wherever it takes place.

In this regard, I have been impressed by how my son's school is proactively addressing bullying. See more about this effort, called Project Cornerstone. The school is teaching kids not to bully or to tolerate being bullied, and the project gives bullied kids tools to go on the offensive against bullies. There's no guarantee that anti-bullying programs will work in the short or long run, but I remain hopeful that online harassment today partially reflects that many current Internet users never got any anti-bullying education. Perhaps, then, online harassment issues will naturally abate (without any regulatory intervention) as new generation of Internet users, better educated about bullying, come onto the Internet.

Following my remarks, we had more Q&A.

Paul Ohm Q: Some cyber folks argue against secondary liability because they believe that a victim can pursue a direct action, but Ed's talk suggests that user anonymity will continue to be possible.

Mary Anne Franks: civil rights isn't about individual claims because victims have to bear too high a burden to pursue claims. Instead, civil rights are about changing large-scale social norms. The goal is to achieve anti-discrimination by any means necessary. Thus, civil rights scholars have already discussed and concluded that it's appropriate to impose liability on intermediaries like employers and schools.

Danielle: intermediaries are the lowest cost avoiders.

James Grimmelmann: no, the harassers are the lowest cost avoiders. Civil rights folks would get more support from the Cyberlaw crowd if they focused their regulatory desires towards intermediaries who are in active concert with the bad actors.

Danielle's Wrap-Up

We all agree that:

* education can make a big difference
* online communities need to self-police
* there are numerous limits to using the law as a solution, including that lawsuits don't make sense and 230's immunity.

We don't agree on what to do next. There are First Amendment limits, and technology doesn't offer any panaceas.

The Florida Judicial Ethics Advisory Committee issued an (advisory) opinion [link] which included the following question and answer:

[May] a judge may add lawyers who may appear before the judge as "friends" on a social networking site, and permit such lawyers to add the judge as their "friend."

ANSWER: No.

[h/t WSJ Law Blog] I thought this conclusion was off base, even after you discount for the fact that Florida has some wacky rules governing advertising by lawyers. My question to the advisory committee is whether this means that it's now inappropriate for a judge to have lunch with a lawyer friend, or engage in email banter with lawyer friends? Is attending the same party now off limits? I assume these actions would still be viewed as appropriate, given that lawyers and judges interact socially (and publicly) all the time. What's so special about Facebook friendship? In the end, the advisory committee should heed the words of one district court

[T]he Court assigns no significance to the Facebook "friends" reference. Facebook reportedly has more than 200 million active users, and the average user has 120 "friends" on the site. . . . Indeed, "friendships" on Facebook may be as fleeting as the flick of a delete button.

Quigley Corp. v. Karkus, No. 09-1725, 2009 U.S. Dist. LEXIS 41296, at *16, n.3 (E.D. Pa. May 19, 2009) (mentioned here and here). With this said, judges and lawyers may want to be careful (driven by common sense), and in any event, minimize their Facebook friending activity while a case is ongoing. [See Techdirt's discussion of a judge-lawyer Facebook friending snafu here.]

[Added: see additional coverage in Silicon Alley's Business Insider: "Florida Judges May not Friend Local Lawyers on Facebook".]

This short list is a way to gain site traffic beyond SEO. I should also say beyond PPC, affiliate marketing or hiring a social media expert.

It hurt me to type those last three words.

As Nick Cave said in his Grinderman role, Get it on.

In no particular order . . .

1. Be the first in a niche

Take the thought about that next great business and simply flesh it out on paper. Then implement. Even in the simplest form if you are first in a niche you will get the rank and community support to grow. It will start out small but over time if it is the right idea and execution traffic will grow.

2. Insightful content

Being first is awesome but if you aren't first, ahem, which you most likely aren't, you'll need to deliver insightful content. Regardless of whether it is video, audio, text or non-digital products the content around the item needs to add value.

3. Controversy

If you're doing it right it will find you. On accident you will step on some toes of competitors or even your own users. Remember this isn't always about always being right, it is about the battle that you can win. And if you lose, be gracious and admit the defeat. If you despise confrontation maybe this one isn't for you but it sure can help in promoting your wares.

4. Offer more

Much more than your competitors. Give visitors a reason to come back. If you nearest competitor offers a message board then offer a message board and live chat . . . and standard 3rd party social tools like Twitter or Facebook. Take the time to review your road map and go off the reservation with brainstorming. Get crazy with ideas and you'll find a solution that you didn't know was there to differentiate you from the competitor. In other words, innovate.

5. Celebrity love

This isn't the layup that it seems. The site doesn't have to be flashy and filled with paid celebrity users. One engaged celebrity user would do. Hell, that engaged celebrity could come from the site community and simply need the spotlight to shine themselves. Offer your users the chance to become the rock star of their dreams.

Conclusion

Be a grinder and get it on. Stop languishing as competitors in your space pass you by. Maybe you are already in the lead and feel that you are not meeting your goals grind it out.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

Top 5 Ways to Gain Traffic Beyond SEO is a post from: TechStartups.com

As the war of words ramps up between Google and some news publishers, the latest spin seems to be how worthless the traffic is that Google sends. In reality, the traffic probably does have value, but the newspapers are likely doing a terrible job of monetizing it.

I'll give some examples in a minute, but how about an imaginary story to illustrate the problem?

Let's say a newspaper executive opens a store. They put some story headlines up in their shop window.

Now one of those old fashioned newskids comes along. You know, the type that you'd see in movies selling papers on the street. Let's call the kid Google.

Google reads the headlines and then scampers off down the street, shouting out to people things like Senate's debating health care! or 1 out of 4 homeowners are in the red!

Some of these people are interested. They ask this Google kid for more information, and Google sends them back to the news store.

At the store, the news exec owner greets visitors by asking them what the hell they want. Perplexed, they visitors say they heard about these stories and wanted to know more. The exec shouts at them. Get the hell out of my store, you freeloader! This is for members-only. We don't need riff-raff like you in here.

That's a hell of a way to run a business, don't you think? But it's pretty much how News Corporation execs seem to view the world. Consider what News Corp digital chief Jonathan Miller said earlier this month:

The traffic which comes in from Google brings a consumer who more often than not read one article and then leaves the site. That is the least valuable of traffic to us the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.

Today, we got similar remarks from James Moroney, executive vice president of A.H. Belo, which publishes the Dallas Morning News and other papers:

This is traffic that's not being monetized to any great degree, Moroney said. It's akin to a person who drops into town, buys one copy of your newspaper and leaves town again and yet you spend a whole bunch of time building your business around that type of customer.

Let's be clear about one reason why these statements are coming out. This is round two against Google. In round one, some publishers said Google steals our content. Google's response was that it sends them millions of visitors for free. So in round two, it's time to make out like those visitors aren't worth much. That's especially important if you're an executive who, after floating the idea of dropping Google, comes under attack as stupidly cutting your own throat.

Me, I see visitors as opportunities. This is the internet, where you can tell far more about a visitor to your web site than you can in print. You can tell:

• They're visiting for the first time or on a repeat basis
• They came from Google
• They came from a specific page, or using specific search terms
• The geographic area they're located in

And the visitor who buys your paper printed on a dead tree out of a newsstand? You can tell you sold a copy. And that's it. That regular subscriber? You know they live in a particular area, maybe some demographic info, but you can't custom your dead tree version in any way to target for that.

Can you imagine what would happen if the Wall Street Journal did a one time promotion where for a day, they gave away 1 million copies of their paper? Since there's a real cost to doing so, don't you think they'd figure out a way to make that promotion count? They'd sell special ads? They'd have a super attractive subscription offer?

But on the internet, where they're not paying anything for all that traffic flowing from Google, there just doesn't seem to be any effort. Millions of people are just written off as worthless. If they're watching The Simpsons on Murdoch's Fox TV network, they're valuable (see Free Isn't A Four-Letter Word Offline, So Why Does The Media Hate It Online?). Put the exact same people on the internet, and suddenly they're net neaderthals.

The problem isn't with the people. They didn't suddenly change when sitting in front of a computer keyboard. They don't suddenly have less money. They aren't suddenly less attractive marketing prospects. The problem is with how you're targeting them.

Remember what Miller said? That most of these visitors read a story once and then leave? Well, clearly the WSJ has some analytics running to understand that. Someone, somewhere has churned a report to arm Miller with that information. But that same data can be used to target those visitors better.

Time for a real life example. Today, at lunch, in the hard copy of the Wall Street Journal that I pay $100 per year for, I read a story bout how 1 in 4 US homeowners are underwater or owing more than their homes are worth.

I guess I have at least $100 per year in value to the Wall Street Journal, since I'm a subscriber. But that's gross revenue. Someone's being paid to deliver the hard copy to my door. There are print costs involved with producing it. I doubt the $100 I pay per year covers all that. But the WSJ also convinces advertisers that I'm somehow valuable to them, which is why they pay to place quality ads in the WSJ like this in front of me:

Now that same story is currently being featured on Google. The minute I click from Google to read it, I'm transformed. My $100 per year value is lost. Instead, I become one of those people who Miller says that he doesn't make any money from.

Well, let's see what I get:

That's the beginning of the story. It is EXACTLY the same thing I see if I read this story by clicking through to it from a link on the WSJ's home page (they've made it free to anyone from there). It's also the same thing I see when I'm logged in using my paid account.

Why is the WSJ treating the one-time / first-time visitor the same way as a regular reader? See those two big arrows I've drawn pointing into the story? I'm pointing out that one of the top goals the WSJ would have for first time visitors is to get them to take that 2 week free offer to subscribe or to take one of the free stay connected via email or RSS options. And yet, these things are shoved off to the top and side of the page.

Place them in front of the reader! At worst, you lose nothing. But more likely, you've slightly interrupted one of those freeloaders in the same way you interrupt them when they watch News Corp TV shows and get commercials. And more of them will convert. They may buy more subscriptions, or they may register so you can do outreach marketing to them.

Meanwhile, money IS being made, even off the supposed freeloaders. There's a big ad sitting there off to the site, plus another one right above. Oh, there's too much ad inventory? Then find a way to convince your advertisers to buy more ads or pay more for them, which probably means showing that your ads perform well. And if they're not performing well, fix your problem. Why aren't they?

This is an article about mortgage owners being underwater. Can we assume some of the readers are attracted to it because they may want help with their mortgages? Are there no companies that offer this to type of service? Are there no ad execs who could figure out how to reach them?

Instead, I get served with an ad from Zurich about how to buy the right insurance for my business. Seriously? That's the ad you show me? This is targeting? Roll out one of those Get a mortgage for below 5% ads that I see offline everywhere.

Even better, here's another ad that also shows for this article:

Yeah, in an article about how people can't afford their homes, you show me an ad about buying an iconic residential masterpiece in Boca Raton. And when I don't click on that, because it has nothing to do with my interests, you call me a freeloader.

Your loss, I think. I've got money to spend. Plenty of your visitors do. You're just not figuring out how to get it from me.

That visitor from Google? Show them a completely different experience, if you want. Article and ad, perhaps embedded within the content (labeled as ads, but inline, rather than off to the side). Please, go hire someone like Jeremy Shoemaker or Jennifer Slegg, both of whom live and breathe how to make as much money out of visitors as possible.

Do something. Anything. Please. Survive. But there's one thing you shouldn't do. Blame others for sending you visitors and not figuring out how to make money off of them.

Last week at Webby Connect 2009 Steve Wax from Campfire NYC shared his knowledge of branded content and campaign development in a digital world. You know the one, where everyone is connected and online, offline worlds merge to create a hybrid that then becomes reality. Steve was able to describe it as the glorious disaster it can be.

The process of this merger is messy. It's not just messy for those trying to figure out how to make money from it with startups, boutique agencies or behemoth multinational corporations, but it is messy for those participating in the culture. Wax talked at length about a campaign that Campfire worked on where people that really wanted to participate in it were unable to. That the campaign wasn't designed as a conversation but as a Stalinesque experience to best tell the story that they had concocted about the product.

Needless to say it sounded better when the creatives were devising it that it did in production. He said that the campaign failed in certain key aspects but the brand didn't walk. They stuck around because with this campaign their was a risk, a calculated risk, but they knew it might fail.

By embracing risk and the chance that no matter how carefully planned out the campaign strategy and tactics may be that it could fail. Startups and the entrepreneurs are themselves taking a risk in putting forth an idea or a product. And what typically happens is that at some point their appetites for risk and failure acquiesce as they have a sense that there is more to lose by taking risks.

Campfire is in a unique position, one that I found myself in nearly five years ago as podcasting began to infiltrate agencies. They were telling clients left and right that they could deliver not only on production, but metrics. They couldn't.

What they could do was find a specialist like myself, a guy in Chicago working out of his basement studio, that could deliver on production, metrics and in-turn teach them the best practices of the medium. I was able to speak to the agencies and brands openly and honestly about their campaigns.

The agencies and brands that listened about taking risk with the content were the ones that succeeded. They were the brands that returned for business year after year until they had the digital capabilities and tools in house.

The current landscape for boutiques and agencies alike is currently an amalgam of that time five years ago with new technology, strategy and the integration of traditional pr, marketing and advertising. The opportunities that it presents are often missed by those less willingly to take the risks needed to stay in business.

Embracing failure to succeed is a necessity when culture and business change rapidly. There are very few times that there is solid ground under an entrepreneur's feet, so to speak. The time to stand still with a hand raised to ask questions about strategy and tactics is over. Move forward, fail, learn the lesson and apply it to the next success.

That is the story that you want to tell.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

Embracing Failure To Succeed is a post from: TechStartups.com

This holiday season Google is shelling out the marketing dollars with Virgin America so that you can stay connected at 35,000 feet going 600 miles per hour.

I guess they figure since they own your soul, which by the way isn't made of electrical ether, it's made of the data trails that you leave online through search, email, feed reading and anything else that behemoth touches, they can give you a great holiday gift.

I'm not sure what dirty secret that Google is trying to keep by buying our attention and adoration that they thought enough about us to allow us to connect to the internet on their dime, but it must be a big one. I wonder if they cheated on mom?

Either way, big daddy is planning on keeping you dialed in while you should be working on that presentation. This is a prime example of how to keep mind share up and win over a core audience when they least expect it.

But don't worry if you aren't flying the Virgin skies this holiday season, big daddy didn't forget about you. No matter what airline you are on and if you're at one of these 47 airports the Google is picking up the tab. So bust out that laptop, PSP, wifi enabled smart phone and your netbook to make sure that you fill your gut, I mean brain, with all the bits you can. Commonly referred to in the biz as bytophan, a close relative to the favorite holiday amino acid tryptophan.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

Google Making Friends at 35,000 ft is a post from: TechStartups.com

Talk to most people about ecommerce and the first thing they probably think of is Amazon.com or eBay. Many of these folks feel that Amazon has locked up ecommerce and that eBay is the only site for person-to-person sales the online equivalent of a garage sale or a collectibles fair.

What if I told you that there's still opportunity in ecommerce. That you can create a competitive, profitable business without being threatened by the behemoths? All you have to do is niche yourself. (Yes, over the past few months I've begun to use niche as a verb because finding and serving a niche is a truly active process.)

Case in point: Gluten-Free food.

My son and I were both diagnosed with an allergy to wheat a few years back. Luckily it's nothing serious, but we both feel better when we avoid wheat. Now, try to find bread or pasta without wheat what a PITA! One solution is to buy Gluten-Free products. Gluten is found in wheat and typically if something is Gluten-Free, it's wheat-free. (Note: this is not always the case, but it helps you zero-in on wheat-free products.)

Our local Whole Foods Market has begun to carry lots of wheat-free, gluten-free products but sometimes without warning or an explanation, they'll stop carrying a product. Over the past few months, they've stopped carrying the only pancake mix that didn't taste like cardboard and we haven't been able to find it anywhere on a consistent basis at any of the local markets.

I found it online at glutenfree.com.

See, as more people in the United States have discovered that they have a wheat or gluten allergy, demand has grown. Realizing that it makes less economic sense for your local grocer to carry these products, this enterprising company started selling them online.

Sure, you have to tack on the cost of shipping, but it's better than eating cardboard for breakfast.

And they're not alone. The number of sites that appear in Google search results for Gluten Free and Wheat Free has grown exponentially in the three years since we discovered our allergy.

So, that begs the question: what other trends are we missing that the big e-tailers haven't tackled yet? What untapped niches are available for entrepreneurs to jump into and dominate before that trend reaches its tipping point and the big guys jump in?

Because then, it will be too late.

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There's Riches in the Ecommerce Niches is a post from: TechStartups.com

What I am about to say is because I have been a long time member of the eBay affiliate program, now called eBay Partner Network. It is also of value to anyone that is starting or currently responsible for managing an affiliate program for a company.

My affinity for their brand is the result of being a partner for over three years, my wife being a seller on eBay for nearly ten years, API ease of use and the ability to earn revenue consistently for three years as part of the partner network.

But try as they might, eBay has not driven me away from the partner network . . . yet. They transitioned the program from Commission Junction to an internal program two years ago. The metrics and other monitoring tools suffered as eBay had to get their affiliate legs underneath them. No longer could an affiliate view the extensive reports for click monitoring, referrals, purchases, week to week comps, etc.

Then eBay transformed the program most recently from their CPA (where a partner was paid if their link resulted in a sale) program to a CPC program. This isn't your average CPC program with prices set per click it is based on an algorithm that calculates the quality of the clicks from a given link on a 24 hour basis and assigns them a monetary value.

With this most recent transition to CPC and a program controlled by an algorithm (see: bot) eBay developed a Transparency Team. This team has the task of reaching out to partners that have links that aren't performing in a manner that matches the eBay partner agreement (see: fraudulent).

This is a great idea in theory. However, this team wouldn't need to exist if the eBay partner network returned to the same type of reports that Commission Junction used. Instead, when reinventing the wheel, eBay eliminated any useful monitoring for partners. Thus making participating in their program as opaque as it can be. Metrics that provide a payout, ranking or trip the algorithm to send an automated email stating that a partner is somehow engaged in fraudulent activity are nonexistent.

Ebay has removed any substantive accounting for themselves in the process of monitoring or payouts, the crux of a developer or user becoming an affiliate. Hiding reports from users that are accustomed to them as part of other vendor programs.

The problem is a that is a basic customer service issue that has not been addressed by eBay. Reporting, prompt replies and useful feedback data would allow partners to build better programs that meet eBay's standards and can be crafted to drive more quality traffic to eBay.

This example says it all:

Two months ago I was contacted by the eBay Partner Network Transparency Team (see: bot generated email) stating that in their quest to be transparent I should do the same and that I was failing as a large percentage of my links weren't sending referrer data. Meaning that they don't have a record from these links of the website where the link was displayed and clicked on.

Fair enough to ask me about the links. Not fair or right, accusing someone of not being transparent when all of the click data is hidden away. Not fair is waiting two months to reply back with meaningless data stating that eBay is right. See below:

Ebay sure is right that I have a high non-referrer rate and that bots are removed. I guess I should stop questioning their authority . . . sure. I'd do that if I knew what the criteria were or what bots are being removed. Because for nearly two years they didn't remove a single bot from click data.

I've requested more data from the Transparency Team like IP addresses and user-agents of those clicks. Since I can't track the click that is actually going to eBay without breaking the user-agreement with eBay I will be at their mercy to figure out if the clicks are coming from mobile devices or and some proxy bot that has a lust for finding its way to eBay auctions. Maybe the bot master was blocked by eBay for not being transparent enough when scraping their auctions.

Ebay, this isn't how to be transparent or run a valued affiliate program. If my experience hadn't begun with your program on Commission Junction I wouldn't have such high hopes for how the current partner network could operate. As an affiliate, I want to make money, but I also want eBay to succeed.

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Ebay Partner Network and Transparency is a post from: TechStartups.com

One of the great speakers, or swimmers, from the Audience Conference was Melanie Notkin. She is the founder of Savvy Auntie. A website dedicated to the cool aunts, great aunts, great mothers and all women who love kids, with a special focus on those that don't have children themselves.

Before this event I hadn't ever come across the site and it was missing from the conversations that I have those that needed a good shave. The niche that Notkin built her site for was the driven career woman that loves her neices and nephews but, like her core demo, she had no idea who Dora, Diego or Yo Gaba Gaba were. She was missing a connection with the little ones that she loved dearly. She decided to fix this, not only for herself but for all women.

The site that Melanie Notkin launched, Savvy Auntie, is more of a portal than a traditional informational website. It allows users to enter channels for general information, activities, shopping and social. Each channel delivering a similar experience to the next while allowing the users to find there way back to a central point to try another channel.

General Information

This channel has information regarding nutrition, books. learning, health and more. Two interesting components of this channel are the Auntipedia and the Q&A section called Dear Savvy Auntie. The Auntipedia is, well, pretty much what the name implies. It is a knowledge base that can actually get an aunt up and running in the areas most pertinent to being a prime caregiver to the little ones.

Activities

This channel provides a ton of useful and engaging activities that can keep you on the go with the kids. From crafts all the way to family reunion activities there is something here for every type of auntie. It is such a robust list, I'll be coming back to it on my own as a bearded one with two kids of my own. I'll also be recommending it to my friends with children and without.

Shopping

That is pretty straight forward. However, the Savvy Auntie has a hook that you can't deny. It is brilliant and creative marketing that most bloggers couldn't pull off Savvy Auntie 2009 Coolest Toy Awards. With great graphic design and a clean user interface it is easy to see toys that will make you cool with the tiny set. My only gripe with this area of the site is that many functions are tab related and triggered with JavaScript interactions that don't allow for direct linking within the site or to these specific sections.

Social

I've seen this quite a bit more lately on the sites that I review. Social is becoming a larger part of sites as they try to become a destination for their faithful. In the past it was forum or comment based. Today, sites like Savvy Auntie are working to create a community of like-minded individuals that want to share their experiences as Aunties by Relation or Aunties by Choice.

These social components can be a huge success for creating loyalty and brand evangelists. They often need constant grooming but can pay huge dividends. From what I can see on Savvy Auntie, not only is it an active community but there are new sections of it under work that grooming component.

What I would love to see on Savvy Auntie is Facebook integration like StyleCaster. Holy smokes. I was effusive in my praise of StyleCaster for doing this and thing that with the power of the biggest social network behind the Savvy community it would be major growth area. One key to this growth being Facebook integration and the other being the ability to still host it on SavvyAuntie.com.

If you are looking for some inspiration on how to get a startup off the ground you need to look no further than Notkin's Savvy Auntie. This is how execution of a great idea gets done.

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Savvy Auntie For The Holidays is a post from: TechStartups.com

You can think of KRonikle as krack for designer vinyl toy collectors.

And before you go off thinking that I'm talking about something else, this is a family friendly blog most of the time.

The KRonikle is the official blog for all things Kidrobot. They cover toy news, product releases and events that are being held at their various stores. This is standard fare these days but what Kidrobot has been able to do with their blog alone is a testament to building community around a passion designer toy collecting.

Designer toy collecting is something that Kidrobot helped to make popular by introducing street artists to the public vinyl toys. Often cute figurines that were swathed vibrant colors and a counterculture that prizes individuality. Mix good marketing on top and you have a combination that leads to a viable revenue stream.

Kidrobot has been growing at a steady pace over the last three years. What the KRonikle represents is their recent entry into blogging and community building online. By creating a central point that allows them to break news on their own sought after products they have the ability to be shape the conversation about the toys and their brand. The two are inseparably tangled since they manufacture most what they sell.

This allows them control with great accuracy images and news about these items. What it also does for them is allows them to have direct contact with the artists that work with them. These artists often make in-store appearances to do signings, customs one-offs and take questions from fans and up and coming artists alike.

The KRonikle is also an entry point for newbies to get accustomed to the culture by dipping their toe in it. Hanging with regulars and advanced collectors can be intimidating as they talk about the artists, the releases and the prices which can be astronomical. Often they are not so high but for a very limited piece or a one-off from an artist, like the stereotypical art world can has a higher cost.

This blog is a good example to show clients that may come to you to help them sell products from their real world business. It is a combination of community, news and products. It represents exclusivity as much as it represents the culture that covets its heroes.

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Kidrobot Krushing with KRonikle is a post from: TechStartups.com

I wonder if they will look more their mom or dad? Which one is which in this situation?

Okay, that was lame.

Last week Focal Press, an imprint of Elsevier Books, announced that it has partnered with Variety to begin publishing books focused on the entertainment industry. What that really means is that these are books written in partnerhsip with Variety by media professionals that are now finding their way online.

This is for the record I haven't read either of these books and am strictly commenting on the press release itself.

The first two releases in the arrangement have focused on what has become the most important question in creating content today how to make money. One of the books, quite possibly has the most ambitious title filled with a bazillion keywords, The Business of Media Distribution: Monetizing Film, TV and Video Content in an Online World. I'm sure it's Amazon search hits are sky high.

Focal Press has a reputation for taking on new growth opportunities that are presented by technology. They have been very astute at following trends online and being able to cash in on them. A few years ago it was podcasting and now they have moved on to what became of the podcasting landscape the Media.

Now that Hollywood is arriving, with wise media faces and a neophytes sense of producing for the internet, they are ripe for education. You could say that they have been producing content for the internet for years and just haven't been paid for it. But let's not tell them that yet and let this illusion persist.

Collectively, with independent producers, the Hollywood crowd is helping to ease us into the next phase of Media. I'm using a capital on the word Media to make it the royal Media the one that we are all now participating in since the tools to create and distribute that media are so ubiquitous. Entertainment is simply an inherent element of this Media.

It makes sense for Variety and Focal Press to hook up and make beautiful books together. For now they will be cute and stuff. However, as they age, they'll start talking back and become insolent ne'er-do-wells that become a reckoning point in the history of media production.

So love these little babies while they have a shelf life and a twinkle of something new and shiny in their eyes. Because the Media is coming and soon enough it will take with it the idea that this newness is anything other than shifting distribution mechanisms that are no different any of the others that have caused this industry to quake in its boots.

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Variety and Focal Press Hook Up to Make Books is a post from: TechStartups.com

Startups are often in a position of being bootstrapped or strapped for cash when it comes to what is considered outside the core product roadmap.

Often in that category is the marketing of the product site online. The crew at Sitening as an ever maturing offering with Raven SEO Tools that won't hurt a startup budget and could prove a big return on a $79 monthly investment.

Raven SEO Tools is an internet marketing tool set. Designed to be a powerful tool for those in the know and accessible to newbies to manage site marketing, research SEO, monitor linking campaigns, reporting and integration with the Google Analytics API.

If there is one thing that Raven could do to improve upon this application it would be spin off components of the functionality into separate interfaces or other product offerings. Raven doesn't suffer from bloat, but it does put a lot of options for monitoring and reporting in front of a user.

Raven's interface is like opening a tool box to find the shiniest most sophisticated wrenches when you would settle for a rusty vice grip. After some time you can get to the rusty vice grip but you have to know where to find it.

The team at Sitening has begun to address with the addition of a Wizard for entering in a new site for monitoring and some social components. The social monitoring is a must for today's market in monitoring tools and a welcome addition for a startup to gauge the pulse of concerned users.

Beyond the Wizard integration there is something very interesting that Raven has that no other monitoring application I've reviewed has a content manager. Raven has a built in mini-CMS consisting of the essentials, title, keywords and body with a TinyMCE WYSIWYG wrapper that currently will connect with a WordPress blog.

The ability to blog from within a robust set of tools when a users mind is full of ideas, keywords, strategy and tactics is a powerful addition. It turns Raven into a hybrid monitoring SaaS that has the ability to help make your startup budget go further.

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Make Your Site Fly With Raven SEO Tools is a post from: TechStartups.com

In case you haven't noticed or cared, traditional agencies, the PR and Marketing types, have been contracting for the last few years. This year has been especially difficult for them with the rise of Social Media agencies. These upstarts are winning business and receiving opportunities that aren't even being pitched to their larger counterparts. This can be fixed . . . but there isn't much time.

What is a Social Media agency?

For those unaware of what a Social Media agency is it is an agency stocked with hardscrabble internet veterans and young talent steeped in the traditions of the tubes. I kid the youngsters, but they are, at this point truly digital natives. They grew up on the internet, were texting years before smart phone popularity and have been enculturated digital simply by being born. Often these agencies are small and their leadership, the aforementioned veterans, participated in the bubble of 2000 and have found a new source of revenue social media.

It didn't have to be this way

Traditional agencies should have seen this coming. This was a trend that they started over the last few years as their clients wanted to experiment with the precursors to social media, blogging and podcasting. During this time they would often offer small budgets to independent producers or find an overworked employee inhouse that knew something about the technologies. The deliverables were forced and atrocious (think astroturfing), poor strategy (if any) for syndication/consumption and zero metrics to show a client return on investment.

What was really happening was the large agencies were incubating social media agencies in the very earliest of stages. Even the social media agencies didn't know what they were yet. What they did know was that what they were producing wasn't working for the end client. And if this new stream of money was to continue coming in they would have to educate their handlers at the traditional agencies and develop their own tools to show ROI.

While budgets for blogging and podcasting began to dwindle, traditional agencies looked at them as passing trends. What they were missing is that the people they had been funding were now off creating tools like FiltrBox, Radian6 and putting their business strategies in place to harness the power of social media. They were going to fill the gap.

Not only have the new companies and agencies filled the gap, they are now taking away opportunities from traditional agencies. All the while, traditional agencies continue to lose money and talent. Much of that talent loss is due to layoffs. Agencies haven't figured out how to begin winning RFP's back and are letting the very people they need the most go. And when they go, they're shuffling off to boutiques and social media agencies to restart their careers with a fresh memory of the bureaucracy that didn't recognize their talent.

Saving themselves

Agencies have to stop thinking that they need more business development. They need solutions.

No amount of biz dev is going to save you when you have nothing to sell. It might work one time. But the client will realize it when they ask what they measurements for ROI are. No more biz dev or placement talk.

What kind of solutions do agencies need? The kind that evolve out of a strategy for engagement. The kind that evolve from a desire to meet the new requirements to participate in social media like listening. They need tools that show competency in measuring the strategy and tactics of a digital campaign.

The key to their continued existence is to prove they are needed. By creating solutions inhouse like monitoring software and metrics analysis hey will be able to monitor new trends and hopefully find themselves riding high for the next wave of competitors.

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Post from: TechStartups.com