Category Archives: Tools of Change

Tim O'Reilly on Free

Posted on February 12, 2008 | 1 Comment

I’m here at the O’Reilly Tools of Change for Publishing conference in New York this week and had the pleasure of hearing Tim, himself, speak about his own media business in a speech entitled Free is More Complicated than You Think.

Here are some excerpts and tidbits:

  • Wikipedia has 5M articles and 6 staff
  • The computer book market is basically stagnant over the past 3 years; forcing O’Reilly to re-think their business and innovate in growth strategies
  • For a long time Tim thought advertising support for free content was the right way to approach the Internet, but that he was just bad at doing it.
  • The question he focused on was: could he / how could he replace his ~$50M book publishing business with a pure online model?
  • Then he did some interesting math. Assume (hypothetical but probably close to his real business) that he sells 200K books/month @ $20 = $4M/month = $48M/year. Average book is 446 pages, which is equivalent to 90M page views per month. At a $1 CPM, that’s $90K/month. At a $20 CPM, it’s $1.8M — roughly half the size of the book business.
  • But there’s a catch, Tim says that online readers view only 5% of the pages in book. All of sudden you down to a mere thousands of dollars per month. So he stopped thinking about a solely ad-supported book publishing business.
  • So, Tim thought, if not ads then what? His answer: a mix of 5 things. (1) sponsored content (e.g., shows, sites), (2) subscription content (e.g., Safari, Make), (3) services, (4) e-commerce, and (5) advertising.
  • He talked a lot about content and community, for example, speaking about their experience with Make webzine, the concept of “the maker”, and the Maker Faire event which attracted 45K people last year.
  • To Tim, the events business is about: (1) community, (2) concept (e.g., the maker), (3) brand, and (4) a sponsor ecosystem.
  • “IP is not our core asset — it’s our mission / brand / community. Let the products flow from that mission and community. Then do the math on the business opportunity, and let the math pick the business model for pursuing it.”

Basically, Tim stuck to his core messages: engage the community, innovate, don’t be afraid of the Internet. Great stuff — especially when delivered in this unique “from a publisher to a publisher” format.

Final thought: who’d have believed that you could build a 800-person publishing tools conference that I’m sure is highly profitable? It all speaks to the power of focus and to focus on the audience (publishers) as opposed to technologies (e.g., ECM, KM).

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Posted in TOC2008, Tools of Change

Notes from Tim O'Reilly Keynote Address

Posted on May 16, 2007 | Leave a comment

Tim O’Reilly gave a fascinating, information-loaded, 105-slide keynote address this morning at the 2007 Mark Logic User Conference. Tidbits include:

  • O’Reilly’s mission is to change the world by spreading the knowledge of innovators: watch the alpha geeks.
  • Web 2.0, which could be called Publishing 2.0, is about information businesses: it’s a data revolution
  • What did the survivors of the dot-com bust have in common? They all used the network as a platform
  • User-generated content (UGC) and harnessing collective intelligence aren’t the same thing. UGC is one way of harnessing collective intelligence, but there are others as well. For example, every time a webmaster makes links to a site they are telling Google the site they’re linking to is important.
  • Harnessing collective intelligence is about growing a database whose value grows with the number of participants.
  • Data is the next Intel Inside. (Or, as we prefer to say at Mark Logic: content is the next Intel Inside.)
  • The top placed ad on Google isn’t based on solely on the highest bid: it’s based on the highest bid times the expected click-through rate. That both serves the user and makes Google more money
  • You should include network effects by default. On Flickr, the default is to share.
  • Human collaboration beats the machine/algorithm: consider Last.fm’s success relative to Pandora, who created a “music genome project” to try and dig into music and determine what you’ll like.
  • Everyone should read Kathy Sierra’s Creating Passionate Users blog.
  • Lessons from Google Maps: if your users are not surprising you with what they’re doing, then you’re not open enough. If they are, then try to learn from them. Half of all mashups leverage Google Maps. (See programmableweb for a mashup directory.)
  • We see content as a database and web services as a platform
  • Remember this quote from Ray Kurzweil: “an invention needs to makes sense in the world in which it’s finished, not the world in which it’s started.”

Tim also mention their upcoming conference, Tools of Change for Publishing, which is in San Jose from 6/18-20. (Mark Logic user conference attendees were given a discount code worth ~20% off.) Others should know that you can save $200 by registering prior to the early bird deadline on 5/21.

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Posted in conferences, O'Reilly, Tools of Change