Brian Caufield has written a great Forbes piece about the impact of new media on … old media. He notes the rise of GigaOm and TechCrunch and the demise of Red Herring and CNET.
My take on much of the new game is that *keeping expenses low* is far more important than *generating big revenues*. We may be seeing a 180 degree turnaround in many industries where we return to small business, entrepreneurial modes of production that use the internet as the mechanism to cheaply scale from small to large. Scaling up in media industries used to take substantial capital but now it takes almost nothing. Info based industries have only begun to reel from the coming changes.
Joe Duck 
It’s amazing how old media icons can be de-throned so quickly. Do you think one of the reasons Red Herring and Cnet are suffering is because of their failure to develop social networks? How do you organize and shape natural social networks?
In what fashion are the media upstarts that de-throne what you refer to as old media icons making use of social networks?
I don’t see where social networks seem to be doing all that much, its more the social network portals that are making the money (or atleast making the headlines).
Are you suggesting that the social networks would bypass the ads referred to in the Forbes article.
I understand the barebones outfit being able to scale up via the internet, but many internet sites seem to require massive data or massive numbers to begin with. MySpace startups with a dozen members just won’t be worth much. A search engine interface may be great but it needs to also have zillions of gigs behind it to hold all those spidering results.
Quality can be scaled but some things to be already scaled or they are not quality at all.
Scott – yes, I think having small social networks compared to other sites is part of their problem (USA Today has developed some social networking for their huge site so it’ll be interesting to see if that stems the tide of losing readers).
Also, “professionals” now compete with the huge proliferation of bloggers and online resources for the finite amount of attention from users and finite ad resources.
FoolGold – I’m not saying that the social networks are the key challenge, just one of them. I would say that blogs and the communities that develop around them (e.g. TechCrunch) are a more ‘personal’ and interactive experience for the user and thus more powerful in terms of interest and advertising power per capita. Blog communities are still much smaller than old media readership. However old media needs a “critical mass” of readers and capital just to keep going, and I think we are seeing some publications dropping below that critical mass and starting to fail.
RE: Scaling up. Note that Amazon and Google offer *extremely* robust infrastructure services for a few thousand per year. Even a modest project can now have world class infrastructure for peanuts, so the new barriers to entry are primarily – trumpet fanfare here – within the realm of good ideas.
“…Even a modest project can now have world class infrastructure for peanuts, so the new barriers to entry are primarily – trumpet fanfare here – within the realm of good ideas. …”
Yeah, that darned adjective seems to let me out: “good”. I can probably come up with ideas, its the ‘good’ ideas that are difficult. Though I admit that I’ve seen a few websites fail on simple matters: newspapers that insist on gathering demographic data first, websites that are poorly designed, etc. Alot of programmers burned through money programming bad ideas, but now the requirements seem to be an economically viable idea to begin with. Thats the rough part!
I wonder how many techie sites could have become a “techcrunch” but didn’t?
And I wonder just how many dollars you are talking of when you say ‘for peanuts’. I recently learned the dollar amount of one indexing startup. It was really lower than I had ever thought of.
“….When investigators inspected her computer, they discovered that she had been talking with a man she had met through Craigslist, an urban community used primarily for the posting of classified advertisements. Visitors to the website can find everything from bikes and boats to hookers and johns. The website is, for lack of a better word, diverse. …….”
Okay. I guess this site didn’t work out for the young lady who appears to have met a predator online, but in general the site is very successful and the name and the site’s “look and feel” was franchised profitably. Alot of sites tried to do online classifieds, Craigslist made it a success. Why? Name, publicity, sheer chance?