Dan Farber on Publishing 2.0

Dan Farber suggests that Arrington, Malik's and Ali's respective media plays (TechCrunch, GigaOm, and PaidContent.org) represent what Scott Karp calls Publishing 2.0, and he thinks the end game is a quick acquisition:

[Publishing 2.0: GigaOm and CrunchNetwork by Dan Farber]

The most likely scenario is that these fledgling, influential startups get acquired by more established media properties, with deep pockets (at least that's what the VCs investing in these properties hope). Like the first Web generation of new publications (the glory days of the Industry Standard and Red Herring, for example), the startups have to hope the bubble doesn't burst a second time. Anything is possible, but the movement of more advertising online, a flatter world, broadband everywhere and the dawn of rich media experiences (podcasts, vloggging, IPTV) puts the odds in their favor if they continue to do what got them to this juncture in the first place.

My take is different. I think the definition of a Media 2.0 company will not be one that is acquired by Media 1.0 companies, but instead one that will rapidly grow and remain independent. Aside from personal, near-term gain, why sell out at all? Wait until the 1.0 era giants crumble, and buy their worthwhile assets (if any).

If Media 2.0 companies are truly going to displace Media 1.0, then they should be awash in cash and opportunities, while the old giants are failing. I think it is dumb to follow Calcanis' footprints and cash out early, just to wind up embedded in a wounded, failing giant like AOL/Time Warner. It would be dumb for any of these three to do so when there is so much investment available and recourse to public markets as well.

tags: media+1.0, media+2.0, techcrunch, gigaom, paidcontent.org, rafat+ali, mike+arrington, om+malik, dan+farber, jason+calacanis, aol, time+warner, weblogsinc

Comments

[jeneane]

I agree with you. Tools/Services = Acqusition route. Content/Thought = Competitive threat to existing players. go team!

[Dennis Howlett]

Of course Dan would say what he does - that's the ZDNet 199X ad led play

[Dan Farber]

The media 2.0 companies, especially those taking VC money, could remain independent and feed of old media carcasses, but still think it more likely that some called media 1.0 companies see the writing on the wall and will buy their way into 2.0, making VCs and entrepreneurs happy...
DF

[Stowe Boyd]

Dan - I am sure that many media startups will accept offers from media giants, and be acquired. I am suggesting that many of those are media 1.0, like the companies that are acquiring them. Just being online doesn't equate to being media 2.0, nor does using blog technologies. I maintain that media 2.0 companies will be different in many ways, including business models that may not line up well with traditional media. The stuff we are seeing today -- building big readership and selling ads, a la Engadget and TechCrunch -- is not media 2.0, it is media 1.0 online. Maybe it's media 1.5.

Media 2.0 will involve small online niches not just new megablogs, like GigaOM, TechCrunch, and PaidContent.org.

[Graeme Thickins]

Stowe, you said you maintain that media 2.0 companies will be different in many ways. Like what? Other than focusing on small online niches, what attributes will they share?

[Dan Farber]

No disagreement....microcommunities will flourish...and we will have big media and the very long and bushy tail of small media and new business models--but what are they? If Om, Arrington, etc are media 1.0 is that a negative state of being? Are they less holy, more corruptable than media 2.0 small niches sites that eschew going for the big bucks and larger audiences? How do you see media 2.0 (vs. publishing 2.0) evolving in ways that will reshape the landscape?

[phil jones]

Anyone read this by John Hagel?

Seems to me that, from this perspective, what the media 2.0 people have done is succesfully unbundled their infrastructure management by delegating it to blogging software, but they still have to decide if they're primarily in product innovation or customer relationships.

If they're in product innovation, they have to find someone else to bring customers to them.

Or, are they really in the customer management business ie. owners of a fanatical audience, looking for any way to serve that audience? In this case, they probably don't need to be bought; finding, servicing and growing their own audience is core to them.

So I'd interpret Calacanis as basically a product innovation guy, going to AOL is his way to get his hands on a bigger audience and getting paid for his innovation. Once in AOL he keeps trying to develop new products, trusting he can sell them to AOL's existing users.

Arrington is a customer relations guy, adding things like a job-board allows him to serve his existing audience in more ways. In essense he's a taste-maker, and could be reselling products from anywhere. What matters is his understanding of what his readers want.

Getting bought by a large media 1.0 company wouldn't make much sense for TechCrunch. Its future is probably closer to Chris Pirillo's LockerGnome or even O'Reilly (the OG of media 2.0 customer relations plays)

AOL themselves, of course, are trying to do it all. If they eventually decide they're customer relations people I guess Calacanis will get bored and leave.