Hyperlinked Society Conference: Linking in Web 2.0

I am spending the day in Philadelphia at the HyperLinked Society conference organized by the Annenberg School of Communication at the University of Pennsylvania. Nice size attendance, fairly different from the one I am used to at events of the Technology Conferences circuit. It was also an opportunity to catch up with East Coast friends I don't get to see that often, like Jeff Jarvis.

The second session of HyperLinked Society has an all-star line-up to talk about “Linking in Web 2.0”, though the discussion might essentially talk about the economics of the “New Web” - which to be honest is totally fine with me.

Panelists were (from left to right):

• Saul Hansell, Reporter, The New York Times, as we the moderator
• Jimmy Wales, Founder, Wikipedia
• Ethan Zuckerman, Fellow, Berkman Center, Harvard University
• Nicholas Carr, former editor of the Harvard Business Review, book author, and blogger
• Martin Nisenholtz, Sr. VP, Digital Operations, The New York Times Company

Nick Carr starts by expressing concerns about the economic structure and incentives of Web 2.0, where content is completely unbundled and the expected economic transfer between publishers and consumers is zero, or close to zero.

Martin Nisenholtz hilights About.com (bought in the last year by the New-York Times Company for $400M+) as an example of this new generation of the Web where content is unbundled and accessible individually - making indexing easier. He mentions that 40% of the users are generating 80% of the traffic on the site, coming through the “front door”, the rest of the traffic coming through search engines.

Jimmy Wales compares About.com and their 150 employees, and Wikipedia and its 4 employees – Wikipedia having 4 times the reach of About.com according to Alexa, and bringing in enough revenue to be self sustainable (Jimmy did not clarify where revenues were coming from).

In my personal opinion, it is true that Wikipedia, and its international and project siblings, is a remarkable success but it is one of very few projects that has reached enough of a critical mass to deliver a high density of content. Companies assuming that they can replicate Wikipedia’s success in leveraging users’ efforts will face what many existing UGC (user generated content) players are facing: lack of scale and sparcity of content. I see a lot of companies claiming to be the "Wikipedia of ...", which means that they have a great business model  since  users produce the content "for free". A vast majority of them will not make it as a scalable business, but might make it as a lifestyle company.

The moderator then drives the panel to address one of the latest brouhahas that animated the blogosphere: the spat between Nick Carr and Jimmy Wales on the death of Wikipedia. Nick states that Wikipedia is growing into a more structured “society” where a handful of people have increased editorial control (citing Clay Shirky). And  because of its success, it is going to “suck the air” out of the traditional encyclopedia  business – removing choice by destroying economic incentives. Jimmy Wales disagrees and cites Brackhaus’ sales (the German equivalent of Encyclopedia Britannicus) being up 30% despite an active German wikipedia community.

Martin explains that a limited percentage of users are leveraging RSS and its distribution capabilities. It is an influential group, but it is still small (a few percentage points of the users). One of the values to the Times though is the ability to aggregate the best sources of content,  including blogs, on a topical basis, and make this aggregation available to Times users alongisde their own content. Sphere, my good buddy Tony Conrad's startup, is actually powering that capability.

Jeff Jarvis asks (in a well thought 4 minutes long question) what is the role of professional journalists, and how they get the economic reward for their work. Ethan Zuckerman uses the example of his project, Global Voices, where 120 bloggers worldwide report on a wide variety of topics, complementing the work of traditional media as opposed to replacing it. The New York Times has 350 reporters and over 600 editors whose job it is to add  and check facts to stories, and add depth of background. This is the role that bloggers will typically not take on, or much less so. Jimmy Wales replied that he saw an hybrid model developing – mixing professionals and citizen journalists, a la OhMyNews, as a credible one for the future.

David Weinberger has a more exhaustive coverage of the panel, and blogged about a few other sessions.

Tag: annenberg, hyperlinkedsociety

Comments

[Gomer]

Interesting stuff Jeff, wish I had been there.

From the above, I think you are saying Wikipedia has revenue. I was not aware of that - I did a few searches and found this:

http://meta.wikimedia.org/wiki/Making_Wikipedia_profitable

(which leaves me with the impression that none of those are implemented)

Can you explain Wikipedia revenue (if I have that right) and where it comes from.

Also, when Martin explains that a limited percentage of users are leveraging RSS and its distribution capabilities, were any examples provided where content was being aggregated on a topical basis?

[Jeff Clavier]

No data points were shared by Jimmy or Martin re Wikipedia's revenues or the actual percentage of RSS delivered information.

[lawrence coburn]

I seem to remember some sort of a commercial deal between Wikipedia and Answers.com. I looked around briefly, but I couldn't find reference to it.

As to Jeff's point about the difficulties of replicating the Wikipedia model, I agree wholeheartedly. It's almost inconceivable to me that any for profit site launched in 2006 or afterwards could achieve the scale of a Wikipedia with a similar 100% UGC, destination site model. At this point, there's just too many quality options competing for folks' attention. Hence the rapid proliferation of widgets...

[Gomer]

Regarding UGC achieving scale, do you think a revenue sharing model of some sort could facilitate that?

[lawrence coburn]

I think Web 2.0 is moving inevitably towards revenue sharing. Over time, faced with options, rational consumers will begin to direct their content contributions towards sites that choose to share revenue with them.

However, revenue sharing by itself will not be enough to build critical mass. It's just too hard to make the economics work in a compelling fashion. Squidoo's top earners make $30 or so a month. This is similar to what we've seen on our site as well. That's just not enough to be interesting by itself.

One model that I expect we'll see attempted soon is the Epinions model of 1999. Raise a whole bunch of VC cash and parcel it out to contributors in a race to achieve critical mass. Once the VC money runs out, you cut payments. This allowed Epinions to pay out at artificially high levels, at least for a while, making a more compelling reason to post. This is different from the Squidoo / RateItAll model of paying folks out based on the revenue that their content earns.