Looks like the blogosphere has jumped on Fred Wilson’s back-of-the-envelope financial analysis of Google, in light of Google’s apparent troubling click-fortunes (honestly, did anyone think we’d be having this discussion 6 months ago?).

He has a good point though: Google’s spending a fraction of its revenues on the one pony that’s actually making it cash money.  Personally, I’m looking at it from a glass half-full point of view. I *like* the idea of Google putting money into unfettered innovation that has a good chance of defining what the “internet” is, via software-as-service while owning the infrastructure behind it (don’t forget, Google has secretly been buying up dark fiber and building huge data centers, also largely in secret, to buttress this initiative).

Its obvious that the minds behind Google are looking well beyond its current incarnation, into a role that will not just compete, or lead, but to define and dominate new categories of technology that are nascent today.  So let the analysts quibble over click fraud data and decreased earnings.  As far as I’m concerned nothing’s changed with Google’s management, nor the direction that its been taking over the past year or so — and given that, I’ll be happy to continue betting on Google’s “one trick” pony for the forseeable future, because I know there are a few thoroughbreds in the stable that we haven’t even seen yet.

More:

• Henry Blodget has a more interesting Wallstreet-oriented discussion, using words like “EBIDTA”, and “run-rate free cash flow”, and “revenue”, and concludes that the reason why Google’s been spending like a drunken sailor on these capital expenditures is *because* its been a wash in cash.

Over a year ago, I had the opportunity to step into the rarified boots of Darren Rowse for a week while he was one vacation. During that week, one of my more popular posts was one called “how to market your blog in 2007“. While watching the nerd fight (albeit between two wealthy nerds) going on between Fred Wilson and Mike Arrington, I couldn’t help but think *once again* how Mike Arrington is using blog / nerd fights to his advantage.

In a Machiavellian way, he should get a big pat on the back (but being thoroughly schooled in Machiavellian transactions, he’d be watching closely for a knife as well).

Andy Beal summarizes it much better than I ever could, but this is the two second summary.

Fred Wilson, wealthy venture capitalist, decides to take a few bloggers (who were journalists at one time) to task about the breadth of their coverage. He admits that the companies that aren’t receiving pub are the ones that he has a direct connection to.

Mike Arrington decides to jump in with both fists (wrapped in tape, dunked in glue, covered with glass shards) to defend one of the bloggers who are on his staff, by deconstructing Fred’s arguments, and then proceeds level with some personal attacks by calling him out: hypocritical, wrong, and conflicted — which should be no surprise, because that’s exactly what the title of the post is.

What happens now?

A storm of blog / nerd controversy as all the feeder blogs chime in, and Techmeme temporarily pushes said story to the top (because Techcrunch is the gorilla pimp of all tech media, according to Techmeme, and scores almost 50% more on the juice scale than its next competitor, CNET — which would merely be, for example, a monkey pimp, small and suitable for grooming other gorilla pimps).

Mike’s said this more than once, and it bears linking to. When he writes controversial stuff, he wins.

I’ll repeat that.

When he write controversial stuff, he wins.

In fact, the MORE that a big blog writes controversial stuff, the more that they will will win, compared to any given competitor; factoring in the X-Factor, which is the meanness quotient, and it multiples their overall winness (or, pwnage, if you’re WOW/CS/Halo-inclined).

And that’s why when I read stuff like this, I read it with a grain of salt.

I mean, it doesn’t really matter so much what the facts are, so much that everyone’s watching now.

To wit:

Joe - we’ve found that the “hits” - the blog posts that generate a lot of discussion - are the ones that drive all stats, including, indirectly, monetization. The problem is knowing what’s a hit and what isn’t before it actually happens. Given that we are all rushing into new territory, I think a little leeway is appropriate.

Now, yes, its important to throw out the usual biscuit about blogger integrity, and so on, and so on. But the takeaway message is clearly this:

Engage your community. Don’t be afraid to get physical (in a metaphorical kind of way), and call people out. Don’t afraid to be negative. But be prepared to fight for your opinion.

And the bigger you are, the more effective it is (because people know about you). But even if you’re only a chimp-sized pimp (and not a Gorilla-sized one), its also effective, particularly if you call out a larger sized one and they actually respond.

{hint: it really works if what you’re saying has a ring of truth to some people}

Interesting question posited by Fred Wilson on Techmeme as a curator of feeds.  That is, that it does such a good job at curating memes that he hasn’t read many (if any) news / blog feeds these days.  The problem, as he sees it, is that it can be “gamed” as any system can, which can in turn lead to a manipulation of perception.

I love Techmeme as much as the next blogger, and I don’t really get fussed about the Leaderboard (primarily because I have never been on it, although there are other indicators that perhaps no one is really listening to my overblown gasbaggery anyway), but a couple thoughts on this:

Its good for what it does: and what it does is provide a snapshot of news and conversations for the past 24 h or so.  The problem is that it pre-picks which conversations to monitor.  As Dave Winer noted, its possible to get included into those conversations pretty easily, but its not a given to just link to the headlining meme.  Nevertheless, there are a host of bottom-sucking morays — such as myself — who like to participate in the discussion, but who that is tends to be predictable.

It could get gamed: as any complex system can.  One way would be to get several blogs — see bottom-sucking morays above, or better yet, a leaderboarder — to point to a single story or post.   Now, I haven’t yet seen anything which even suggests that this has happened, but its possible.  At one point I was writing for Deep Jive Interests, the Blog Herald and Problogger (earlier this year).  I was tempted to try it, but what would be the point in that?

It makes me lazy: as a tech blogger who needs to review a wide variety of sources, it makes me really, really lazy.  And this is a function of its leaderboard, as it naturally weights some blogs / news sources more than others.  That’s why TechCrunch can headline a story in and of itself without any pointing discussions to it, irrespective of its intrinsic worth as a story (I mean, this would be difficult to measure without any specific metric, such as inbound links).

So for upcoming stories and a wide breadth of stuff, I like Blogrunner.  It lists stories as they come out (such as Fred Wilson’s post, which I picked up within 30 minutes of him posting it), whereas Techmeme has a few hour (or few day) lead in.  Secondly, its own list of blogs / news sites that it scans seems larger, so it gives the appearance of a real diversity of opinion (whether or not such a thing actually exists in the blogosphere is to be debated for another time).  The problem with Blogrunner, though, is its layout in that its not as easy to scan the page for the headlines you want.

But as for my own leading question — have “curated feeds” stopped you from reading RSS feeds?  I don’t know.  Let’s talk about it, because I can see how for some, it might.  There’s a lot of news out there, and it takes time to build a good OPML file (why there’s no easy way to search for these things and share them is beyond me), in addition to reading it all.  I’ll admit that I’ve caved into the lazy temptation of getting others to “curate” their feeds for me, whether it be Scoble, Blogrunner or Techmeme.

Could I be getting a skewed view of things? Of course.

But I think as long as I _know_ they’re skewed … well, I think that’s all that really matters, doesn’t it?

Oh, what the difference of a few months makes. Or, rather, perhaps its just the pull of a web magazine, like Slate. Most recently, Slate has come up with an article heralding the death of email, in the face of a generational shift in communication methods.

Translation: kidz luv IM.

And texting.

And yes, there’s a lot to be said about what the medium means, irrespective of the message.

Which is funny, however, given how this past June Fred Wilson was raked over the coals for talking about how it was easier for digital natives to see and take advantage for the future. I think a lot of bloggers were particularly sensitive over the post, and while yes, age doesn’t matter, in a very real difference, age *does* matter.

(which I discussed over here about 6 months ago as well).

There’s a generation of individuals that are using technology in a way that is completely foreign — even to folks who are “only” 5-10 years their senior. And there’s *another* digital generation that are 5-10 years *their* junior who are facile at using another kind of technology that teenagers aren’t quite as ‘hip’ to — virtual worlds a la Club Penguin.

I could also make hand-waving arguments about how these kinds of interactions might _also_ actually have profound effects on brain development, in the way that both generations interact in their interpersonal relationships, and in so doing, provide a vague (but possibly substantial) argument that there is a real organic impact on these folks.

Which makes, in a round about way, Fred Wilson right: there is a generation of people for whom email is a bit of a relic.  Some older folks have made a similar leap, but by and large its a generational *thing* (see Mat Ingram’s interactions with his own kids), that will allow some of them, by and large to see things that other generations won’t.

Valleywag has decided to initiate a “conversation” about a marketing vehicle that’s been going on for months, that involves many, many, A-listers, such as Om Malik and Mike Arrington, who use Federated Media to help serve ads. I’ll be honest — I noticed it months ago, but until Valleywag’s recent piece, I didn’t really put some of the dots together.

In a pinch, Federated Media has gotten their A-list roster to talk about, or participate in a “conversation” around topics that their advertisers sponsor. Case in point: Microsoft sponsoring a “conversation” around how “People Ready”, or Cisco sponsoring a “conversation” around “Human Network”. So, whats’s the “conversation” now?

• Valleywag alleges that this is no different than getting high paid actors to shill for companies or their products — and in this case, Big Bad Micro$oft.
• Neil Chase, of Federated Media, simply calls this the “birth” of Conversational Marketing, and congratulates himself (and Federated Media) in the smuggest way possible, by saying outright that “marketers to want to join the conversation … It can be done in ethical, responsible ways, and FM’s authors are among the first to figure out how to do it.”
• Om Malik finds that the questioning of his integrity is too sensitive an issue to be bandied about, and has simply dropped Federated Media advertising, and has apologized.
• Mike Arrington on the other hand, isn’t focusing on the conversational site, but how banner ads have now been served up with his quotes about the conversation. What’s wrong with banner ads, he asks — and chides Om Malik for backing down to Valleywag’s bullying.
• Fred Wilson (whose site also uses Federated Media), feels like this is a new world, and that he’s just happy to be participating in something new. Which somehow absolves him of any ethical actions (or inactions) he’s making. Right.

Well, this is all well and good.

I think none of them are getting the point, however.

At the heart of the matter isn’t the nuts and bolts of clicking, *nor* the fact, that, for example, any the A-listers are doing any outright shilling. You will not find, for example, Mike Arrington saying that “I love Microsoft”, or that “I made TechCrunch a Microsoft business”. Or, even, how their blogs will probably cover Microsoft.

(probably not consciously anyway).

And so, Valleywag is wrong in this way.

But its as Dave Winer has gotten out of John Batelle — Conversational Marketing … “its more nuanced” — and in fact, more insidious, I think.

Here’s why.

The conversations that Federated Marketing wants to host? Those are conversations around certain, specific, terms. In another time and place we’d call them “slogans”. What’s important, however, is that the companies which are sponsoring these A-listers to do off-blog “conversations”, are trying to “own” these slogans.

You can think of it as a branding exercise.

Microsoft wants to “own” the phrase, “People Powered”.

When you think of “People Powered”, Microsoft wants you to think of … well, Microsoft.

Its the same story with Cisco. It wants to own the phrase “The Human Network”, because it wants to associate it with all those feel-good qualities. When you hear “The Human Network”, it wants *you* to think of Cisco.

“Top of mind” qualities and all that.

The insidious part comes in next — that is, what Fred Wilson doesn’t seem to get, what Om Malik seems to be worried about implicitly without perhaps understanding why, and what Mike Arrington doesn’t seem to be focusing on.

(and perhaps what Neil Chase is so damn smug about).

Can I digress for a second?

Blogs are extensions of their blog owners and the bloggers who write there. I’ve often been asked about what I think about the buying and selling of blogs. Well, its an interesting business, but I think its terribly hard to separate the blog owner from the blog itself. When you buy a blog, unless the original author is coming with it, its hard to tell if the audience will continue because they were only reading for the blog author in the first place. Sure content is important, but so is his or her voice. Their style of doing things. Stuff only that they might know. And in that way, blogs are intimately related to their blog authors.

Back to the conversation at hand.

What’s insidious about things is that Federated Media feels good about hosting a “conversation” about a topic that is trying to be owned by a company. Bloggers might feel that since they’re not actually talking about it on their blogs, it somehow removes them from the connection. But it doesn’t. Especially if you talk about your blogging company as part of the conversation.

Yes, conversational marketing is ‘new’, but it has its roots in exactly what Nick Denton is clumsily alluding to.

Bloggers are not shilling outright for General Wallington’s Tincture of Rattlesnake (good for all of your ills), but what they are doing is indirectly lending their persona’s and their brands towards a concept — an idea and *phrase* — that another company is *trying* to own.

What’s the problem in that?

Only that if that these bloggers weren’t somehow compensated to do so, none of these bloggers would have initiated, or willingly participated in such an artificial conversation.

So, its almost like a company has come along and sponsored a conversation, right?

In principle, this is nothing different than PayPerPost.

Of course, the nuts and bolts are totally different. With PayPerPost, you are supposed to write an article *on* your site, and yes, there’s the whole bugaboo of having the article be positive, in-post disclosure and all of that.

Needless details.

At the end of the day, PayPerPost sells itself to its advertisers as being able to generate Buzz. All of the paid posting sites do. The fact you also get inbound links is a bit of a “secondary” benefit (that isn’t directly or primarily) sold [although its a great one from an SEO point of view]. With PayPerPost, or ReviewMe, advertisers can, essentially, buy blogs to try and initiate buzz.

Which is really what conversations are.

At its heart, the advertiser here is Microsoft. The want to create a conversation, not around its site, or around a product, but around a more nebulous concept. A phrase. A term. The Microsoft brand. So, it hosts a conversation, and pays, in a round about way, bloggers to write about that concept.

And in so doing, those bloggers are lending a part of themselves, a little bit of their authority, which is implicitly manifested in what they know, how they’ve gotten to be successful — but explicitly manifested by their blogs — to that idea.

Its more nuanced, for sure.

But its also more insidious.

Because I’ll wager that *none* of those bloggers even know what their contribution to a sponsored conversation even *means* (although I suspect that Om Malik might know): that A-list bloggers have a price. It is possible to pay for them to not only serve your ad, but to start a conversation *around* an idea. An idea that you’re trying to own.

They might not be explicitly endorsing that idea, but that very fact — that you can, in fact, purchase a conversation with the biggest players in the industry around an idea that you are trying to own — is the whole point. That they’re not doing it on their own blogs is immaterial, because they *are* their blogs, and when they lend their name and their idea to the conversation, its only bolstering that fact when they mention their experiences WITH their own blogs.
John Batelle’s right. Its not black and white. And for Federated Media, this is smart. Look at how much Buzz they’re getting.

On the other hand, I do think that, in principle, this is really no different than PayPerPost — as a purchasable tool to promote buzz. I’ve said for a long time that I’ve felt ambivalent about the issue, except where the future is for this kind of phenomenon.

Mike Arrington and now, Fred Wilson, and in the past, vapidly, by Amanda Congdon — they all agree on one thing. Blogging is “new”, and they feel that bloggers are not accountable to the same kind of standards that normal journalists are because its a different medium. Perhaps a self correcting one. One where the conversation is important, and not, perhaps, the connections *behind* the conversation. Or that they’re more important, but that as long as you’re willing disclose all should be forgiven.

Well, the funny thing is that it is exactly the spirit of being different is exactly what’s driving the paid posting phenomenon. And paid buzz to another degree. Mashable asked me what my 5 predictions for 2007 were? Its that the paid posting phenomonon was only going to go on the increase. And I stick to that position half way into the year, but I’ll broaden it to mean “paid posting as a means to generate buzz”. Paid buzz is something that is clearly expanding, and its something that’s so insidious that the folks who are involved with it, I think, don’t even know what they’re actually doing.

And as a parting shot, do *I* think there’s anything wrong with it?

Not really.

But if you’re going to do it, you should know about the association, the connection, that’s made in your readers mind about what you’re doing. When you are compensated, in a round about way, to participate in a conversation about a topic that another company is trying to own — in a conversation that you would never otherwise participate in? There’s a connection there. Its not as flagrantly obvious as you shilling for their products or services. John Batelle is right that way.

But there is a connection nonetheless.

And a judgement.

That your opinions — at least your ability to *start* a conversation (and what are blogs, but conversations) have a price. And that’s not such a bad thing, necessarily.

Just don’t castigate other bloggers or other industries when they try and do the same thing, but in a different way.

An interesting debate over what Marc Andreeson was alluding to, when, as it refers to web services an the evolution of “Web2.0″, Fred Wilson supported the idea that a new design pattern was emerging that was being pioneered by younger generation of web users — mostly because they are “net native”. What was interesting, of course, was how the issue became one of “Fred Wilson is an Ageist SOB — Let’s Do a Blog Pile-On”

I mean, at its heart, its a silly debate … one that speaks more of the bloggers who are protesting a little too loudly, and a little too long, about how they feel about their own ages.

I would like to think that I’m not old. I don’t think 30 is old. But, I *do* understand what Fred Wilson is getting at. Every few years, there’s a change in how young folk “use” the Internet. I’m probably a few generations away from how teenagers are currently using it, and it will continue to change and evolve even beyond how teens are using it now. And I think *THAT* is what Fred Wilson is getting at.

Would you like two examples?

How many of you check your email?

Or, this one: How many of you wear a watch when you leave the house?

Teenagers today use email less than any demographic, for example. Use ‘less’ email? Why might that be? Perhaps because they’re sending messages via their own closed networks, such as MySpace or Facebook. Or, perhaps because they’re using their phones to send text messages. I’m not quite sure of the reasons (where’s Charlene Li when you need her?), but this kind of fact carries incredible implications

Consider the usage of watches. I don’t have a link here, but I did see a bit on a local news station the other day, and I was surprised to hear that something like less than a quarter of all teenagers carry watches. Why is that? Well, when asked about it, most said things like “I’m carrying a cell phone around with me *all* the time — that has the time.” Or, “Why would I need a watch? I just look at my iPod”.

Both of these kinds of patterns are unfathomable to *me*, but it is precisely these kinds of things which define how a generation interacts with different media, and in this case, the rise and (off-line) ubiquity of instant messaging. Sure, when they ‘grow up’ they’ll all start using email and begin wearing a watch because business standards will force them to adopt them.

But it says a lot about how they would *rather* spend their time. And these two small examples are clear examples of how digital generations are “different”, even to individuals who might not classically be defined as of a “generation” than them (as I clearly am).

Now, just because you’re older doesn’t disqualify you from being a net native. However, its clearly the rule, rather than the exception. The average 60 year old will understand email, but because none of his or her peers are using instant messaging and off-line texting to communicate, I’d wager there’s an aspect of this pattern of usage that they just won’t “get”.

If you’d like an analogy, when boomers were listening to Rock and Roll, I’m sure there were folks who were part of the Greatest Generation who “got” that as well, and were just as happy to turn up the volume on Mick Jagger, Barry Manilow, or Paul McCartney (for those boomers who were into those artists). But, I’ll wager that most didn’t.

Furthermore, if you were in the music business, of course there were professionals that were older and seasoned, but if you wanted to learn more about creating a new sound that was fresh and new, unless you’re always in places and with people who were making that new sound, you just wouldn’t be right for the job.

Bottom line? It doesn’t mean that you have to be young, but it helps.

Fred Wilson’s post wasn’t a shot at people who have paid their dues in the technology business. All it was was a recognition of a phenomenon that happens with every generation. And, more importantly, something that happens with the exploration and maturation of every new medium.

You don’t have to *be* young to recognize and take advantage of new patterns for the “web2.0″, but you do have to be in it, thinking about it, and using it often enough to be facile with the terminology and usage that you *could*do it. That Fred Wilson sees so many “company’s” these days with younger and younger pitchmen is a testament to the fact that many of them happen to be 20-somethings.