Author: Jeff John Roberts

A new profile of the Financial Times is the latest piece to hold up the company as a model for traditional publishers that want to create a digital-era business. It sounds great, but it’s not very realistic.

The piece in question is by media analyst Ken Doctor who notes the FT is the first newspaper to have “crossed over” by amassing more digital subscribers than print ones. As of February, the respective numbers were  316,000 to 286,000; the feat fulfills the FT’s prediction at paidContent 2012 that the cross-over would occur in 2013. (You’ll be able to hear more digital-media industry predictions at paidContent Live on April 17).

As Doctor explains, the accomplishment results from shrewd business decisions such as persuading companies to buy individual subscriptions for their employees: “Rather than leaving B2B customer sales relationships to aggregators like Lexis Nexis and News Corp.’s Factiva, the FT began converting corporate FT buyers to direct relationships.”

Doctor acknowledges that daily newspapers don’t have the same corporate opportunities, but says that they can follow the FT and Politico in creating a valuable niche: “If dailies’ news and information are as critical locally as the FT’s is to a global business clientele, why not test a new model? .. [Politico] Pro works several niches. Mr. and Ms. Publishers, what’s your niche?”

If a publisher can come to occupy such a niche, they may enjoy the same virtuous cycle as the FT where margins rise with digital revenue while distribution costs stay nearly fixed.

But it’s hard to see how the FT case study can apply to anyone other than the FT. Recall that even the New York Times is struggling to “cross over;” its digital revenues are rising but, overall, the paper’s overall operations are shrinking. The Wall Street Journal, with a similar global business niche, may be the only other publisher with a hope of crossing over this year.

Doctor also cites the FT’s 30-person data and analytics team as integral to the company’s digital transition. He points out that such teams can supply critical intelligence about customer targeting and revenue optimization. But do other publications, which can no longer afford copy editors, have the means to hire dozens of data scientists? Probably not.

How many other newspaper and magazine brands can you name that even stand a chance of making this crossover?

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A federal appeals court has allowed the New York Times and other media outlets to argue against sealing documents in the “patent trial of the century” between Apple and Samsung that took place last summer.

In a short order issued on Thursday, the Court of Appeals for the Federal Circuit granted the media groups fifteen minutes to participate in a hearing scheduled for March 26. The groups also include Bloomberg, the Washington Post, Dow Jones and the First Amendment Coalition.

At the hearing, the tech companies will ask the Federal Circuit to overrule a lower court’s order that granted the media companies’ initial request to unseal various filings in the patent dispute. The documents are significant because they are likely to disclose sales and revenue figures that Apple and Samsung would prefer to keep secret while they hash out damages figures related to a massive $1 billion jury verdict.

Although court filings are public, companies sometimes ask to file confidential information under seal. In recent years, however, Apple has asked to seal documents on a nearly routine basis, which led the Reuters news agency to mount a successful court challenge this summer.

The controversy over the sealed documents has led other news agencies to take an interest in the issue. The media outlets’ participation at the upcoming hearing is likely to draw more attention to the Apple-Samsung documents, an unwelcome development for the companies.

This week’s order is below. Here’s the full list of media outlets who signed the application to attend the hearing: the New York Times, Bloomberg, the Washington Post, Gannett Co., Dow Jones, the First Amendment Coalition, Reporters Committee for the Freedom of the Press, the Society of Professional Journalists, and the American Society of News Editors. The filing was first spotted by Reuters.

Fed Circuit Grants NYT Permission to Intervene in Apple Samsung

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Google created a minor shockwave last April when it introduced a new tool that caused millions of websites to tumble in its search listings. The tool, known as the Penguin algorithm, punishes sites that attempt to use dubious linking tactics  in order to increase their visibility. Now, a new report suggests that the company is applying the punishments with increasing severity.

According to a study by Portent, an internet marketing firm, Google is steadily decreasing the number of manipulative links it will tolerate before it downgrades a site. When Google first introduced Penguin, the algorithm would permit 80 percent of a site’s incoming links to be spammy before it took action; that number then dropped to 65 percent and then 50 percent by the end of 2012 (which is end range of the study).

To come up with the findings, Portend examined thousands of incoming links for 50 major websites, and the effect those links had on sites’ prominence in search listings.

If the findings are correct, the upshot is that companies will have to be even more cautious about search engine optimization (SEO) tactics that rely on external links. These links are one signal that Google uses to decide if a site is popular, which has led some companies to acquire non-organic links through trade, purchase or other means. In one famous example, JC Penney used SEO tricks to appear as the top search listing for a wide range of terms, including “bedding” and “area rugs” before Google took action.

In some cases, it may be unfair for a site to be punished for outside links — particularly, if they have control over the sites that are linking to them. To prevent this, Google offers a “disavow” tool that sites can use to indicate that they don’t want particular links to considered as part of their search score.

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A grand jury has charged Matthew Keys, social media editor at international news service Reuters, with helping the hackers’ group Anonymous to break into the computer system of the publisher of the Los Angeles Times in order to alter its website.

The allegations are set out in a stunning indictment revealed by the U.S. Department of Justice on Thursday. Keys faces three federal charges: one for conspiracy and two related to sharing malicious code. The indictment (via Politico) also shows an instant messaging session in which Keys and a hacker named “sharpie” gloat over hacking the Times and commiserate that the publisher has locked Keys out of the system.

Key’s biography page at Reuters is still up for now and says he was hired in 2012 and is currently Deputy Social Media Editor, a relatively senior position that involves sharing newswire stories over platforms like Twitter and Facebook. Here’s a screenshot:

The indictment also states that Keys’ decision to supply passwords from the Tribune Company, his former employer, allowed Anonymous to alter a political story in the LA Times to say that “uber skid Chippy” take his place as head of the Senate and that Democrats should “suck it up.” The hacked version of the story stayed up for 30 minutes.

The indictment says the Anonymous communications took place in December of 2010 and describe Keys at that time as a “recently terminated employee” of radio station Fox 40.

If convicted of all the charges, Keys faces a maximum of 15 years in prison. In the event of a guilty plea, he could offer information in return about his co-conspirators in return for a shorter sentence. The indictment also states the federal government wants him to forfeit a MacBook Pro, a Toshiba hard drive and personal property.

Reuters’ Twitter account, which Keys presumably had a role in overseeing, continued to tweet regular business news on Wednesday. The Reuters Legal account has likewise so far made no mention of the hacking.

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The owners of feline internet sensation Grumpy Cat have applied for trademarks over a wide-range of merchandise such as cell phone covers, beer mugs and video games. The cat’s lawyer, however, says the owners will “try to be cool and stay righteous” about kitty-related fan art, and will only go after “dirtbags” who defiantly attempt to cash in.

The plan comes as the fame of Grumpy Cat, a Snowshoe Siamese with a perpetually dour expression, continues to grow. Last week, the cat stole the show at the tech and music festival, SXSW, where people lined up for hours to take pictures with her. Grumpy Cat was also hired by BuzzFeed but had a bad first day.

The trademark applications, which also cover hoodies and comedy videos, were filed in January on behalf of Ohio-based Grumpy Cat Incorporated. Los Angeles lawyer, Kia Kamran, confirmed by email that the company is controlled by Tabatha and Bryan Bundesen, the siblings who own the cat and helped build its fame.

Kamran, who also represents Mike Tyson, says he hasn’t filed any Grumpy Cat lawsuits yet but probably will soon in response to the “current wave of infringers that are popping up.” He adds that, while he’s sensitive to the cultural dimensions of internet memes, he’s had to take action on behalf of other clients, Nyan Cat and Keyboard Cat.

Standing up for the feline will be a challenge, however, since Grumpy Cat is a cat not a person. Unlike human celebrities, animals can’t invoke “personality rights” which let them control their image. The Bundesens, if their application is successful, will nonetheless be able to control the commercial use of the phrase “grumpy cat” and photographs they own of the cat.

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As March Madness, one of the biggest under-the-table gambling event in American sports, approaches, sports site Fanhood is trying to tempt users and their friends into placing tournament pics and other casual wagers online. The site is one of a growing number of “social casinos” like Zynga Poker that offer casual play — but that are also crossing their fingers for a big windfall as states loosen online gambling restrictions.

According to CEO Brandon Ramsey, a former engineer at Yahoo and Zynga, Fanhood is aimed at the millions of Americans who make casual sports bets with friends for fun and bragging rights. He claims the site, which relies on Facebook’s platform, has 50,000 active users who can use virtual currency tokens to bet on everything from the Superbowl to NHL hockey games.

“It’s the same kind of psychology as taking $5 from a friend,” said Ramsey, claiming that Fanhood’s message boards and ongoing tallies of bet outcomes will keep users coming back. He adds virtual currency sales can sustain Fanhood because, unlike social games like Farmville, it doesn’t need fresh content — the sports matches supply that.

While Fanhood may succeed with virtual betting and sports chatter (much like the thriving fantasy sports industry), a big payoff would come through real money betting — a New York Times report pegged online betting as worth between $6 and $100 billion. But, for sports, this is a longshot at best.

Like Zynga Poker, Fanhood is only legal because players can’t cash out. If they could, these sites would be violating federal laws that forbid online betting unless states permit it.

In recent months, the prospects for social gaming companies have brightened as Nevada, New Jersey and Delaware have legalized online gambling. The process, however, is far from smooth sailing. Companies still must navigate established casino interests and, in the case of poker, assemble a critical mass of players (you can only gamble across state lines if all states involved permit it).

The legal challenge is even bigger when it comes to sports betting. According to Jim Gatto, a lawyer who specializes in gambling issues, the federal government deliberately excluded sports when they loosened online gambling rules in 2011. The reason, he said, is that sports depend on human action for the result — meaning there is an incentive to fix the results when there’s money on the outcome (history, including the NBA, shows he’s right).

This means Fanhood and other social sports betting sites will have to be content with virtual currency for the foreseeable future. There is also a chance too, of course, that a casino or other large gambling company will acquire them in the hopes of luring casual sports betters to a gambling site.

(Image by Jerry Sharp via Shutterstock)

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History shows that scientific breakthroughs often occur during wartime when countries approach hard problems with a rare mix of urgency and unfettered creativity. War, for instance, has often led to rapid advances in cartography, cryptography and physics. But is it possible to replicate this type of wartime-style problem solving in times of peace?

Google thinks so and claims that its hush-hush ideas lab known as Google X is designed to do just this. Speaking at Austin’s SXSW festival Tuesday, Google’s Astro Teller, the man who holds the title “Captain of Moonshots” shared some details about how the lab thinks and works.

According to Teller, who is the grandson of H-bomb inventor Edward Teller, Google X believes that the process for solving huge and difficult problems is unlike that for solving incremental ones. “Moonshot thinking,” he said, requires overcoming society’s prescriptions for caution and embracing both audacious ideas and failures.

“You have to have a group of people dedicated to throwing almost everything away,” Teller said.

To this end, Google X generates hundreds of ideas a year and even develops many of them into prototypes or white papers. Ultimately, though, the lab selects only one or a two a year to turn into a reality — Google’s driverless cars and computer glasses are among those that have been selected. Another recent product is the blue dot on Google Maps that reveals where you are inside a building.

Google X’s culture of creativity is about exploring any ideas but also getting the successful ideas out of the lab before they’re done. Teller said this ensures that commercialization doesn’t undercut the “Peter Panishness” of the place.

So what’s next from Google X? Teller said the lab expected to announce another discovery in the coming month but refuted reports that Google is building some type of space elevator.

Overall, Teller’s talk was an inspiring testament to the power of thinking big and what can happen when people explore without fear of failure. But it also had some of the drive-by ephemera of a TED talk — profound for a second and then forgotten the next day.

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The New York Times Company last year unveiled an ad tool called Ricochet that allows brands to staple their online ads to stories as they move across the internet and social media. Now, other prominent publications like The New Yorker and Forbes have signed up to use the tool too.

If you’re unfamiliar, here’s how Ricochet works: a brand pays the New York Times for special versions of its story links in which a certain ad will always appear next to a given story. The brand can then distribute those stories on its website and on social media in the hopes of generating buzz. In practice, this might involve a blueberry seller paying for its ads to appear beside Times’ stories that discuss antioxidants or healthy eating.

The ad tools appear to have proved popular as, in a Wednesday news release, the Times said that Forbes, Condé Nast, AdAge and People will begin to use Ricochet too.

For the publishers, Ricochet offers a way to make money from long-tail content. Meanwhile, the tool offers brands a way to use content marketing to spread the word about a topic in the news or about one of their own products.

Michael Zimbalist, VP of R&D operations at the New York Times Company, told paidContent last year that Ricochet is a “very simple product” that clients will be able to use in an off-the-shelf fashion.

Content from the new titles, which also include sites like Ars Technica and Vanity Fair, will be available on Ricochet as of May 1.

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The Federal Trade Commission issued new guidelines on Tuesday to encourage better disclosures in online ads. The rules, intended to protect consumers from confusion, come at a time when so-called “content marketing” and “native advertising” are soaring in popularity.

The FTC announced the rules in a release stating the agency has updated its 2000 guide, “Dotcom Dislosures,” in order to take account of smaller media screens and the rise of social marketing.

The agency emphasized that traditional disclosure rules, which cover media like radio and television, apply to all forms of the online space as well. These longstanding rules prevent marketers from hiding key terms of an offer and require them to reveal if someone has been paid to endorse a product.

The new FTC report contains 22 examples at the end that illustrate how marketers can fall afoul of the rules in the mobile and social media context. Many of these refer to display ads in which a user must zoom or scroll down to see information that reveals, for instance, that a diamond may not weigh as much as the ad says.

The most intriguing examples, however, include one that appears aimed clearly at Twitter marketers. Although the agency does not cite Twitter by name, it refers to “space constrained ads” and includes pictures that appear near-identical to a Twitter feed:

The social media guidelines recommend small space advertisers place the word “Ad” before messages or make other obvious disclosures. Twitter itself has long clearly flagged sponsored posts; in reply to an email, a company spokesperson referred to Twitter’s sponsorship policy.

The guidelines also take aim at bloggers who provide information or reviews in exchange for products or services. In one example, the FTC shows a blog post about house paint in which the writer states at the end that she received a free can of paint. According to the agency, such disclosures must be clear and conspicuous and not tucked away after a series of links or other distractions. The new guidelines may affect companies like Microsoft that have paid bloggers to”astroturf” on their behalf.

More generally, the new rules may also be a caution for advocates of “native advertising.” This type of advertising, in which an ad mimics the format of surrounding content, is hardly new but has become a buzzword in recent months as marketers turn to “sponsored posts” and other forms of branded content in the hopes of attracting more attention.

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Music subscriptions services, which provide an alternative to purchasing songs on sites like iTunes, continue to gain in popularity. One example is Sweden-based Spotify, which is expanding rapidly across the globe and has now added another 1 million paid subscribers in the last three months.

According to figures reported by CNET and confirmed by Spotify, the company now has 24 million active users and 6 million paying subscribers across the world. Spotify is also growing rapidly in the United States, where it arrived in July 0f 2011 and is this week hosting musicians at its “Spotify House” at the SXSW festival in Austin, Texas.

Despite the hype, the underlying economics of Spotify’s business model remain uncertain. The service is beholden to musicians and studios, which request a 70 percent cut, and it must contend with a growing list of competitors that include Pandora, Rdio and SoundCloud. Meanwhile, YouTube is expected to launch a subscription service of its own in coming months and even Apple is expected to get into the streaming game too.

This competition validates the underlying premise of Spotify — that people want access to a giant catalog of music instead of buying it piecemeal through iTunes — but the arrival of deep-pocketed rivals may hurt Spotify’s ability to compete in the longterm.

 

 

 

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Unlike countries where people stop to have a nice meal in the workday, Americans have a little noon ritual of their own — sitting alone to chomp over the very same keyboard where they spent the rest of the day. According to Sad Desk Lunch, a site to share your lonely workplace sandwiches or microwave meal, 62 percent of Americans eat where they work.

If you find this depressing, take heart: Help may be on the way, thanks to big data study that showed that workers are happier and more productive when they eat with others and socialize during the work day.

According to a Wall Street Journal report, Bank of America used data to discover its employees were 10 percent more productive when the company replaced solo breaks with group ones. Meanwhile, data experiments at other firms led them to make a cheerier, more social work place:

The company decided to make its once-dingy cafeteria more inviting, improving the lighting and offering better food, to encourage workers to lunch together, instead of at their desks.

Sound good? Don’t leap up from your sad little desk and pin the Journal article to your boss’s door just yet. There’s a catch. The employers in the article came to the conclusions they did only by sticking sensors on their workers:

Sensors, worn on lanyards or placed on office furniture, record how often staffers get up from their desks, consult other teams and hold meetings [..]  company employees wore iPhone-size badges.. that collected data on their motions, whereabouts, voice levels and conversational patterns.

The Journal report also notes that “bathroom breaks are optional” for those who are monitored and that employees who felt squeamish about the whole thing could wear dummy badges instead.

(Image by Monkey Business Images via Shutterstock)

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While it’s easy for advertisers to track people across different websites, the trail goes cold when a person turns off the computer and resumes surfing on a phone or tablet instead. That’s starting to change, however, as brands deploy technology that matches identities across devices.

One example is New York ad company Tapad, which claims its “Device Graph” uses 2 billion data points to find people on whatever screen they’re using. This means, for example, that a shoe company can identify a potential customer and hit them with a succession of ads — one on their work computer, another on their phone as they walk home and yet another as they look at a tablet on their couch.

In a recent interview, CEO Are Traasdahl said about 100 clients are using Tapad’s technology, including Dell and major electronics and finance firms. The appeal, he says, is that ad campaigns are more efficient if marketers know that an ad viewer on a computer and a smartphone is the same person.

Tapad’s technology may provide a boon to marketers but it also raises some obvious questions. First, how do we know it works? Mobile marketing is tricky in the first place because smartphones and tablets generate fewer cookies (the bits of computer code that indicate you’ve visited a given website); for example, Apple limits cookie collection by its Safari iPhone browser and by third party apps. This makes it difficult for brands to use so-called “retargeting” (showing an ad to someone based on what they done in the past) on a mobile device; identifying that same person across multiple devices would seem even more difficult.

According to Traasdahl, Tapad uses a sliding scale to guess whether a computer and phone user is the same person. Like all advertising, he says, there is an inherent degree of uncertainty. But he adds that, for brands, the proof is the pudding — they can look at whether multidevice targeting produced a lift in response or sales.

There is also the question of just how Tapad is tracking people. Like other companies in the mobile marketing space, such as Google Ventures-backed Adelphic, Tapad is tight-lipped about its techniques. Traasdahl did, however, say the company uses data sources like publishers’ log-in information, Wi-Fi locations and zip codes as some of the sources for its billions of data points. This is an example of what a recent MIT Technology Review article described as “reverse-engineering” our online identities.

Finally, in addition to the technology dimensions, there is the creepy factor. While companies like Tapad may provide more efficient advertising, some are going to bristle at its efforts to track them wherever they go. Tapad, like others in the advertising industry, protects “PII” — personally identifiable information — which means the “identity” that marketers see is just a random number, not your name or address. Still, there is growing concern in the media about tracking (see this week’s “Technology Turns to Tracking People Offline” in the New York Times) and in Congress where there are regular mutterings about Do Not Track legislation.

For now, the likes of Tapad and its investors (who include FirstMark Capital and Avalon) are counting on a light regulatory hand as they fine tune the online marketing machine.

(Image by Alexey Fursov via Shutterstock)

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As the process to roll out hundreds of new top-level domain names, which will join familiar ones like “.org” and “.com,” grinds forward, the head of the largest domain registrar predicted the public will be able to buy them by June.

GoDaddy CEO Blake Irving, attending a large scale meeting of current and future domain registries this week, said by phone that no one knows exactly when the first batch of new names will be available but that the “over/under” consensus among the sellers is three months from now.

Under the process, the new names — which include suffixes like “.party,” “.dog” and “.mormon” — are expected to be rolled out in batches of 20 at a time. The impending sales will deliver millions of dollars to the domain name industry which makes major money off registration fees and in the secondary market for internet names.

The industry has been touting the addition of the approximately 2000 new suffixes as a “land rush” and a “gold rush.” Critics, however, have warned the process will mean a surge in cyber-squatting and trademark infringement. Companies, which have likened it to a shakedown, are already exasperated at having to pay for new names like “.xxx” they don’t need or want but feel obliged to obtain lest someone abuse them. This could occur, for example, if someone who is not Disney bought the name “www.disney.dog”.

The domain name sales have also been characterized as a brazen act of self-dealing by ICANN, an unaccountable agency that overseas the naming process for the internet.

GoDaddy’s Irvine defends the process, saying “free market economics allow people to buy the names they want.” He added that the potential for abuse is lower since so-called domain parking (sitting on a name but using it just for ads) is not as big of a business as it once was.

The first of the new names to go on sale are likely to be non-Roman scripts like Chinese or Russian. These were given high priority by ICANN and the order of others was determined by lottery; other names tapped to go early are “.wedding” and “.buy.” (You can see the priority list here).

GoDaddy, anticipating a sizable amount of new business, said it is making its website easier to navigate in response. The company this week also dropped its own application to manage “.casa” and “.home” in order not to be perceived as competing with the names it sells on behalf of others.

(Image by  d3images via Shutterstock)

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Media companies live a fraught existence but, even by that standard, AOL walked closer to the valley of death than most. A year ago, most observers (including us) believed AOL was in permanent decline and that its content empire — including its money-losing local sites — was an incoherent mess.

Today, AOL has mostly bounced back and its CEO Tim Armstrong, who survived an ugly proxy fight last year, seems to feel vindicated. At the Paley Center for Media in New York on Thursday morning, he explained why he bet on a content strategy to turn the company around.

“Silicon Valley is a pig pile ..  Everyone is putting out the same services, the devices have become more commoditized and the platforms are the same,” said Armstrong. He added that, over time, content is what will differentiate the platforms and that AOL’s strategy is to be the content “arms dealer to Silicon Valley.”

To achieve this, AOL is pushing forward with an expensive video strategy that involves, in large part, turning the Huffington Post Live into a new type of cable channel. Armstrong says he sees AOL’s video ambitions as a “Clay Christensen type disruption” and that its potential will only expand as mobile technology improves. He added that AOL will also rely on its cable partnerships to feed the appetite for content.

Armstrong also addressed the future of Patch, AOL’s network of hyper-local sites that have lost a spectacular amount of money and been a punching bag for shareholders and media pundits. He acknowledged that “there’s a lot of dead soldiers on the local hill” and that other efforts, like NBC’s EveryBlock, have flamed out. But he thinks Patch still has a chance.

“The journalism world pounds on Patch,” said Armstrong, but pointed out that the sites have become a fixture of hundreds of local communities and that Patch’s viability should be seen through a long lens. He added that Patch reaches nine percent of the US population but also 20 percent of the country’s commercial markets, and that the sites will be profitable by the end of the year.

In response to a query if AOL’s content appetite might include Time Warner’s magazine empire which is now for sale, Armstrong demurred. “I’m a fan of the brands,” he said, but added that the economics for such a deal wouldn’t work.

AOL’s current feel-good moment is reflected in its share price which is outpacing other media companies and the stock market as a whole (red line is the overall Dow index):

Despite Armstrong’s optimism, however, there are still plenty of reasons to be cautious about AOL. The stock’s high-flying performance is driven in part by a billion dollar patent sale and, for now, AOL still has to prove that it can make its content and ad units profitable. As Henry Blodget pointed out last month, AOL’s revenues may be growing for the first time in eight years but nearly all of its profits continue to come from selling copper wire internet connections to dial-up subscribers.

(Image by EDHAR via Shutterstock)

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Time Warner surprised the publishing world on Wednesday afternoon by announcing that it would spin off its 21 magazines, including namesake Time and Sports Illustrated, into a separate company.

The move comes on the heels of earlier news that a rumored sale of Time Warner magazines to Iowa-based Meredith has fallen through. Under the terms of that proposed deal, Meredith would have acquired lifestyle and women’s interest brands like People.

Instead, Time Warner’s magazines will be slotted into a stand-alone corporation last year. In the company’s news release, CEO Jeff Bewkes said the move would be similar to earlier spin-offs involving Time Warner Cable and AOL.

“After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc. A complete spin-off of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses, and improves our growth profile,” said Bewkes, adding that current Time Inc. CEO Laura Lang will stay on in the short term for the transition.

The spin-off is likely to mean layoffs or closures at the newly independent magazine entity. In recent years, Time Warner has reaped large profits on its TV content but the magazines, despite their iconic status, have struggled in the face of an ongoing secular decline.

The split also mirrors what took place at media giant News Corp., which last year announced plans to move its publishing assets into a separate company.

According to New York Times sources, the Meredith deal failed to come through after Time Warner could not agree on money nor on what to do with four core titles — Time, Sports Illustrated, Fortune and Money — that Meredith did not want to take on.

Time Warner has not indicated how much equity it will retain in the newly spun-off corporation nor whether it will keep the “Time” in its name in the future. Not long ago, the company was known as AOL Time Warner; now, the Warner part is all that is left.

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Upworthy, a viral media site, is less than a year old but already has more than 9 million monthly viewers. That outpaces the early days of other viral sites like BuzzFeed and Business Insider, and makes Upworthy the fastest-growing media company on the internet. It’s also one of the most unusual.

If you’re not familiar, Upworthy adds splashy headlines to photos and videos it culls from across the internet, and encourages viewers to share them on Facebook and other social media sites. This is akin to what sites like BuzzFeed do but with two major differences: Upworthy doesn’t have advertising and it focuses exclusively on political and social issues like gender equality and climate change.

So far, the site has made a splash with fare like “If this video makes you uncomfortable, then you make me uncomfortable” (advocating for gay marriage) and “Bully Calls News Anchor Fat, News Anchor Destroys Him On Live TV.” Upworthy also stands out for its editorial process: curators prepare 25 versions of each headline and engages in extensive A/B testing to find out which version is most likely to go viral.

“When we look at the media landscape, we see there being more of a demand problem than a supply problem – how do you get people to care about important stuff amidst the avalanche of content we all face each day?” said co-founder Peter Koechley.

So far, Upworthy is off to a roaring start and not just thanks to its millions of visitors. The press has praised Upworthy for using viral tricks to promote content unrelated to cats, while high-profile media figures like Jonah Peretti and Facebook co-founder Chris Hughes have put their own money into it. The site has also received $4 million from venture capital firm NEA.

All of this has made Upworthy a darling of the start-up scene. But what is the company’s business model? As noted, Upworthy has no advertising income, nor does it plan to have any. Meanwhile, the company is in the midst of a mini-hiring spree, while also maintaining a high-gloss website and social media operation.

Upworthy says it earns money by connecting “readers with non-profits and other organizations who are looking to grow their memberships via the sign-up boxes” on its site. In other words, the company is collecting email addresses and social media profiles for “lead generation.”

The company adds it will not work with just any organization — only those that “create positive social change.” In response to an email query, Upworthy co-founder Peter Koechley declined to provide financial figures but did say the site has been taking in revenue since its third month of operation.

It seems far-fetched, however, to build a major media venture on the backs of the Sierra Club, the American Worker or other social-change groups. Unless, that is, Upworthy’s primary goal is instead to build a political operation aimed at gathering voter data and boost the Democratic party in upcoming elections.

Recall how the Obama administration won the 2012 race by using big data to identify and energize individual voters. The Democratic Party’s campaign, which relied heavily on Facebook connections and custom email messages, ran circles around Mitt Romney’s TV-based campaign. Now, with the help of Upworthy, the Democrats could be in a position to do it all over again — the site could not only help identify passionate supporters of liberal issues, but also be a laboratory to experiment with headlines and marketing messages like the ones used in an election.

Some members of the Upworthy team certainly have the pedigree for it. Koechley’s co-founder is Eli Pariser, the former head of Moveon.org, a liberal activist group closely tied to Democratic Presidential campaigns. Meanwhile, BuzzFeed’s Peretti was one of the founders of the Huffington Post, a site built out the ashes of John Kerry’s failed 2004 campaign as a left-wing counterforce to the Drudge Report. Meanwhile, according to Wired, Koechley is closely connected to Obama’s chief digital strategist who gained fame for focus-tested emails like “I will be outspent” and “Do this for Michelle.”

Koechley told me: ”We don’t view ourselves as a political organization, although some of us do have backgrounds in politics,” he said. “Some of the most popular stuff on Upworthy is about the wonders of science, building women’s self esteem, or feel-good stories about overcoming adversity.” He also pointed to the site’s own description of itself as a “mission-driven media company.”

There is no reason to doubt Koechley and Upworthy’s sincerity about using viral media to advance social change. And it’s hard not to support much of what they’re doing; I don’t like homophobia or bullying either. But it’s also pretty easy to look at the company and see the seeds of something far more potent than just another viral media site.

(Image by SoulCurry via Shutterstock)

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Walter Isaacson, the author of a bestselling book about the late Apple founder, will not have to share his notes or testify in a case about alleged price-fixing between Apple and book publishers.

Class action lawyers had earlier demanded that Isaacson provide evidence, based on his interviews with Steve Jobs, about why Jobs asked publishers to sell books on Apple’s iPad device. Isaacson refused to hand over his notes and invoked a New York law that allows journalists to shield their sources in many situations.

The lawyers, who want Apple to pay for allegedly fixing book prices, had subpoenaed Isaacson and said the reporters’ shield did not apply. Last week, however, court documents show the parties agreed to drop Isaacson from the case.

The Isaacson dispute comes at a time when Apple’s antitrust showdown with the Department of Justice and class action lawyers is coming to a head. While the five publishers who were also named as defendants decided to settle, Apple is rejecting the accusations that it acted as the hub for an illegal conspiracy to raise book prices and thwart Amazon. Meanwhile, Amazon executives are poised to testify against Apple.

Even though the Isaacson biography is no longer part of the case, a court transcript shows Steve Jobs will remain a central figure. In response to a question about who decided to sign contracts with book publishers, Apple executive Keith Moerer said, “Ultimately, I would say it was — Steve. But working closely with — with Eddy, Mr. Cue.”

Meanwhile, other recently filed court documents identify one recipient of a highly publicized Jobs email about Amazon and pricing — the recipient was James Murdoch, a senior executive at News Corp, parent company of HarperCollins. The other recipient(s) are still redacted. You can see the email below:

Steve Jobs Emails by

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YouTube, which has been quietly talking to music studios for months, is poised to launch a streaming service this year according to Fortune. The report says the service will mimic Spotify by offering listeners a choice between an ad-supported model and a paid subscription version.

The arrival of the YouTube music venture has been rumored for a while and, when it comes, it will be the latest entrant into an evermore-crowded digital music space. In addition to Spotify, there is also a variety of other online music libraries like Pandora, SoundCloud and Vevo – a venture backed-by major studios that now uses YouTube as one of its distribution platforms. Apple is also rumored to be launching a streaming service.

For musicians and rightholders, the arrival of Google-owned YouTube and its deep pockets could be good news. While the music industry has come to embrace digital distribution, it has also complained that the royalties it receives are still meager.

Now, though, the entry of giants like YouTube and Apple is likely to give new leverage to the music industry in negotiating royalty rates. This is the case not only because these companies are awash in cash but also because more demand for digital music is likely to increase studios’ pricing power. Conversely, this could also spell bad news for Spotify; in the same way that Netflix struggled when its earlier movie contracts expired, Spotify could be confronted with much higher content bills in the near future.

A music-streaming service for YouTube will also give it a new platform to test pricing model for paid subscriptions. This process could provide lessons for YouTube’s video service which is coming under criticism for failing to deliver enough ad revenue to creators.

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Do you like to receive free pens and soy sauce in the mail? Well, you might be in luck — provided you’re willing to take to Facebook, Twitter, Pinterest and other social media sites to describe your experience.

In a recent twist on content and social media marketing, companies like Johnson & Johnson and Kraft are sending out samples and asking consumers to complete “missions” based on the products they receive. One recent example, known as “the Juicy Bird Mission,” asked partipants to brine their Thanksgiving turkeys with Kikkoman soy sauce and describe the experience online.

The concept is the brainchild of Social Media Link, a startup based in New York that offers brands access to its community of “influencers” as a way to amplify their marketing messages.

According to CEO Susan Frech, 300,000 people have signed up to be “influencers” on the company’s Smiley360 site and more than half of them have completed at least one mission. Potential participants are screened by an email survey and those selected receive a product and mission card in the mail. Out of curiosity, I asked Frech to partake in a mission and soon after I received a package containing this:

The attached mission card asked me to give away one of the pens and to use the other one to try my hand at a four-color picture. My mission also asked me to ‘like’ Bic on Facebook and to upload my handiwork to the internet. I failed. But it looks like some of my mission compatriots persevered:

I confess the whole process felt odd to me, but I may not be typical. According to Frech, 75 percent of participants are women (“chief purchasing officers” in brand speak) and many live outside metropolitan areas.

In any event, Social Media Link is faring well. Frech says the three-year old company is profitable and that it has run dozens of missions for major brands with deals valued near six figures. The company has also had social hits, including for the “Juicy Bird” soy sauce Mission, when thousands showed up at an hour-long “Twitter party” and caused a hashtag to trend.

For the participating brands, Frech says the appeal of the campaigns is the chance to reap social media buzz among a user’s community and, on some occasions, to test out new products.

The process also offers a way for brands to get positive reviews without falling afoul of FTC rules that require marketers to disclose if they have received any form of payment. As part of Social Media Links’ “mission” rules, participants can write what they like but have to state they have received the product for free.

(Image by Franck Boston via Shutterstock)

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As the federal government presses its anti-trust case against Apple, rival Amazon is taking on a central role in determining whether a court will conclude that the iPad-maker illegally colluded with five publishers to fix the price of ebooks.

According to a new court filing, Apple is demanding more access to Amazon’s top ebooks executives, Russ Grandinetti and David Naggar, because the executives have said they “will likely testify at trial on the government’s behalf.” Meanwhile, a filing by Amazon said the company sought legal advice in early 2010 in response to what it perceived as the “the existence of an illegal (possibly criminal) price-fixing conspiracy by the five publishers and one or more retailers.”

A trial in the case is possible because Apple, unlike the five publishers which agreed to settle with the Justice Department, continues to hold out. Apple is in the cross-hairs of the government which accuses it of acting as the hub of an illegal price-fixing scheme in early 2010. The alleged scheme involved Apple offering its new tablet reading device, the iPad, as a way for publishers to introduce a new commission-style pricing system and shut out Amazon unless the latter agreed to the new prices.

The latest court filings, which came to light last week, are part of a procedural dispute in which Apple insisted it had a right to obtain more testimony and documents from Amazon executives. Amazon, in response, invoked a shield known as attorney-client privilege which allows parties to withhold information that was obtained while seeking legal advice. Last week, US District Judge Denise Cote sided with Amazon in the dispute and ruled that the information was privileged.

Court filings also reveal that the dispute in question turns on two meetings between senior Amazon executives in early January, 2011; one of the meetings took place at a “boathouse” at the Seattle residence of Amazon CEO Jeff Bezos.

The Amazon executives claim the reason for those meetings was to get legal advice “to avoid the very liability that the publisher Defendants and Apple are facing now.” Apple unsuccessfully argued that the meetings shouldn’t be privileged because Amazon was actually plotting business strategy and that it is now using the presence of its lawyers as a pretext to hold back information. Apple also claims its legal discovery of Amazon has already “exposed a glaring hole in the government’s case.”

A big part of the underlying case turns on “most favored nation” clauses and the publishers’ decision to impose so-called “agency pricing” which saw retailers like Amazon and Apple take a commission from a price set by the publishers. The agency system, which publishers say was necessary to stop Amazon selling their books at a loss, is no longer in effect due to Department of Justice settlements with the publishers.

Judge Cote, in her order denying Apple’s challenge to Amazon’s attorney-client privilege, also ordered executives from publishing house Penguin to participate in the proceedings. You can read Apple’s earlier letter to Judge Cote below:

Apple Letter Re Amazon Discovery by

(Image by Getty Images / Spencer Platt)

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