Craigslist to Top $100 Million?

As newspapers struggle with declining ad revenues online classified ad site Craigslist is forecast to exceed $100 million revenues this year. That’s a whopping 23% increase of last year and its bottom-line is likely to be even healthier. First launched in ’95 as a email list the company was quick to undercut newspapers and appeal to a wider audience. Newsprint still dominates but over the last decade has seen its revenues drop 50% from $20 billion in 2000 to $10 billion last year.

Employment advertising, once the a mainstay of the newpapers is expected to account for some 85% of Craigslists revenues which leaves significant potential for future growth in other areas. It is also worth noting that 40% of their revenues comes listing in just three major cities; New York, San Francisco and Los Angeles. Again this leaves significant opportunities for further growth.

Craigslist employs just 30 people!

Hulu Captures Disney

Hulu, the video streaming site, has now secured Disney, and with it comes ABC. With some 42 million visitors a month Hulu has , in the last 18 months, become the third most popular video site on the Web, behind YouTube and Fox Interactive Media. The only major U.S. TV network not yet in the Hulu loop is CBS, which have ties with Google's YouTube.

Hulu has partnered with 35 sites, including AOL, MSN, MySpace and Yahoo. It gets content from nearly 150 companies, such as Fox, NBC, Comedy Central, Lionsgate, MGM, MTV Networks, National Geographic, Paramount, PBS, Sony Pictures Television and Warner Brothers Television Group.

ABC will give Hulu an exclusive license to distribute its shows on Hulu.com and across the Web on Hulu’s partner sites, like MySpace and AOL .com. Disney will take a 28% stake in Hulu.com, and as part of the deal, NBC and the News Corporation also renewed their commitments to provide their shows exclusively to Hulu for an additional two years.

Hearst to Move Onto eInk?

It is unclear as to whether individual media companies will follow the Amazon route and build their own devices and try and control their own channels or whether they will adopt a more open and inclusive approach to the market.

Hearst Corporation, the giant media conglomerate, announced it will launch an e-reader of its own by the end of the year. Hearst’s magazine and news papers include SmartMoney, Esquire, Oprah Winfrey's O Good Housekeeping, Cosmopolitan, Popular Mechanics, Seventeen 16 daily and 49 weekly newspapers including San Francisco Chronicle and the Seattle Post-Intelligencer both of which Hearst has put up for sale.

The first unkown is the device which is almost certain to be based on eink with Hearst Interactive Media being among a group of strategic investors that have together poured more than $150 million into E Ink’s technology. Will they use Plastic Logic device or opt for their own? What is becoming clear is that the Hearst e-reader will almost certainly be larger and wireless to accommodate the format of newspapers and magazines. This will help reproduce the more-complex layouts of print periodicals as well as letting advertisers buy spots in the sizes and format they're already used to. However for now they will have to accept greyscale which to some degree will dilute the appeal of their glossy magazines to consumers and to their advertisers. There is some speculation that Hearst is exploring making the device foldable or rollable to enhance portability.

The second unknown is the business model with many predicting that the will attempt to move from the free online to a subscription model a tricky move with only a few such as Wall Street Journal sticking ridgidly to it. However we note that Newsday has declared their intent to move to a paid model for their online edition.

The Hearst e-reader may work if readers see added value but we are now seeing the collapse of newspapers as we have known them for over 100 years. Advertising revenue, the shift of classified advertising to the likes of Craigslist, online free news, services such as Google news and the news on your mobile are all compounding to cannibalising the model.

If Facebook Where a Country?

If Facebook were a country it would be the 8th largest on the planet and would be bigger than Japan, Russia, the UK and most of the developed world. Its 54.5m unique users a day is the equivalent of everyone in the UK logging on every day.

The rise of social networks is so far the phenomena of the 21st century but where are they going next? Where is the money? Can we all subscribe to many networks or do we focus just on one? Is there room for more or are we at saturation point? When does a generalist loose appeal to a specialist networked community?

The trick is obviously to turn the eyeballs into advertising revenues, but with such a large and diverse membership, are global brands the only ones that will work? Can list management offer sales based on preferences? Individual companies can mine into the community to promote themselves but can do this without paying the service provider, so again its down to how they make money?

The one thing that is certain the consumer is unlikely to pay to be a member so the money has to come from somewhere. Unlike countries Facebook and the other networks can't nationalise the Banks or print money.

Warner Switch Off the Music

Warner Music Group has demanded that thousands of its videos be removed from YouTube. The battle is once again media companies, which expect to be paid for their online content and Google who have not matched the valuation sought by the likes of Warner and although all the major labels reached agreement some 2 years ago with YouTube on a per view fee and advertising revenue share. The debate is now about whether the labels should be paid in advance or after the videos are viewed and as the old agreement has expired, the renegotiation of a new licence.

Music videos current experience billions of hits on the service and 6 of the 10 most popular videos of all time are music. TubeMogul says musicians and record labels are responsible for over 8 billion views on YouTube. Warner reported $639 million in digital revenue for the last fiscal year but has expressed that YouTube only contribute less than 1% of this. This is obviously a problem that Warner has to solve as physical music sales continue to drop through the floor both in volume and revenues.

Digital content pricing is a difficult one to price today as tomorrow the value and price model is likely to change. The obvious key is to keep to licensing on relatively short term times and remain flexible on the model but as this also has to be acceptable to the licensee that can become a challenge as they don’t want to have to dramatically revisit costs as the service grows.

The one thing that is clearly coming home is that the old adage that the Internet is free is certainly changing at the point of consumption and that it may be free to use but you may be paying via a different business model moving forward. The big issue on advertising models is that aggregation will count and therefore players such as Google will have to upper hand as they will control the money.