The New York Times, Brought to You – Literally – By Twitter

new-york-times-buildingIt’s easy enough to be skeptical about Twitter’s influence and staying power — I do it all the time. But there’s no denying that it has become a powerful driver of Web traffic.

Just ask the New York Times (NYT), which says Twitter is about to become one of its top 10 referral sources to the paper’s site.

Impressive. But what exactly does that mean?

There was a flurry of excitement this afternoon on  Twitter — of course — when Simulmedia CEO Dave Morgan threw out a much more exciting data point: Reporting/Tweeting from an industry conference, Morgan said Times digital boss Martin Nisenholtz had announced that “Twitter now drives 10% of NYT digital distribution, up from 0 a year ago.”

dave morgan twitter

Other attendees report hearing the same thing. But whether they were participating in a mass hallucination, or Nisenholtz misspoke, here’s the Times’ official line, via spokeswoman Diane McNulty: “At its current growth rate, Twitter is, or will soon move into, the top 10 in terms of referrals to NYTimes.com.”

If that’s the case, then Twitter likely accounts for much less than 10% of the Times’ traffic. If you assume that Google (GOOG) is the paper’s largest external referral source, and that it likely accounts  for a third of the site’s traffic (these are semi-educated guesses, but I’m happy to adjust), then Twitter and other sources at the bottom of the top 10 are going to be in the low single digits.

Still! It is a lot of traffic, and a year ago it either didn’t exist, or someone else was directing it to the Times. Now the trick for Twitter (and its investors) is to figure out a way to capitalize on that phenomenon.

AOL: More Org Chart Shuffles Coming; So Are Ad Dollars. But Mum on Microsoft.

092009ATDaolIt’s Advertising Week in New York! Which means that for the next few days, ad sellers will be meeting, greeting and buttering up ad buyers in hopes of prying some of their dollars free. Just like every week in New York.

One difference for the likes of me: Big ad sellers are making themselves very available to the press. This morning, for instance, AOL sent out CEO Tim Armstrong, sales boss Jeff Levick, sales deputy Erin Clift and content boss Bill Wilson to poke at eggs and ignore a plateful of bagels and lox.

Oh, and they talked, too! The big message was that they’re still in the process of overhauling the Internet giant on behalf of Time Warner (TWX), which brought in Armstrong from Google (GOOG) earlier this year and says it still plans on spinning off the company by the end of 2009.

Afterward, I got a brief interview (along with PaidContent’s David Armstrong) with the AOL chief. The video is at the bottom of the post, and you may need to turn up your speakers to hear it. But the takeaways are:

  • AOL is still looking for a chief marketing officer. The search is in the “early stages.” Do you know anyone? Internet experience is not a prerequisite.
  • More org chart moves, like the one that saw COO Kim Partoll pushed out last week, are coming. They’ll be part of the internal review process Armstrong has dubbbed “Project Everest,” which should be complete by the end of the year.
  • So are layoffs. See above.
  • Internet ad dollars are beginning to flow out again–or if they’re not flowing, Armstrong thinks they will be, as big marketers like Procter & Gamble (PG) make permanent shifts in their advertising mixes.
  • Armstrong professes to be surprised by a report last week that he had met with Yusuf Mehdi, who runs Bing and MSN for Microsoft (MSFT). “I know Yusuf. I’ve known him personally for years. So if I saw him I would be happy, but….”

Newspapers’ Bad News Get Less Bad–But Not by Much

inflating-balloon

Is the newspaper advertising slump about to end? Nope. But it’s continuing to get a little bit less awful.

The New York Times polls some of the remaining analysts covering the industry, as well as people who actually work in it, and concludes that Q3 ad revenue will be down 25 percent, or “possibly a bit less”. Awful by any standards except those of this year: Q1 was down 28.3 percent and Q2 was 29 percent.

Worth noting, but not in an newsworthy way: We’ve been headed in this direction for a while. Publishers including the New York Times (NYT), Gannett (GCI) and McClatchy (MNI) started making hopeful murmurs — or less hopeless murmurs, really — earlier this summer. But all they’re really saying is that:

  • Things don’t seem to be getting any worse and
  • It’s nearly impossible for year-over-year comparisons not to improve for the rest of the year, since results will be measured those posted in the fall of 2008, when the economy was in shocked-and-awed mode. Which we knew. But still worth repeating, and something we’ll probably repeat many more times through the rest of this year.

Microsoft Goes Hunting for Malvertisers. Are They the Same Guys Who Hacked the New York Times?

dr-evilThe hackers who duped the New York Times (NYT) into serving a bogus ad last week may be part of a growing trend. Or they may just be very active: Microsoft says it has been hit by a similar attack and is suing the people behind it.

But first the company needs to figure out who the culprits are.

Microsoft (MSFT) has filed five so-called “John Doe” civil suits against the hackers, whom it can’t identify yet. Redmond accuses the unknown attackers of a variety of crimes, from fraud to copyright infringement; it says it hopes the filings will “deter malvertising in the future.” (See full text of the complaint below.)

There’s a decent chance that the Microsoft bad guys are, in fact, the same guys who hijacked the Times last weekend. The methodology they used to get the ads onto Redmond’s MSN publishing network seems similar, and so does the fake “virus detected” warning the ads use to confuse surfers.

And, intriguingly, online ad monitor Click Forensics says it thinks it has identified a link between the malware that the Times served up and the stuff that the Microsoft attackers were trying to distribute. The company also thinks the two attacks are connected to a click fraud ring it has dubbed the “Bahama Botnet.”

Even if Microsoft does end up getting its hands on these guys, I think we’ll be seeing more of this stuff. Since the Times story broke last weekend, I’ve been talking to a variety of ad tech experts about the incident. And it sounds as if the technique the hackers used to compromise the paper–essentially, passing themselves off as legitimate advertisers–will be very difficult to stop if someone is determined to use it.

The best solution I’ve heard so far: Monitoring systems that can quickly detect an attack and warn publishers that they’re running malvertisements. It’s unclear how long the bogus Times ad stayed up, but the fact that it got switched on over the weekend indicates that the attackers assumed the paper would be slow to react.


Microsoft Malware complaint

How to Make Money With Web Video: Books and DVDs

old jews telling jokesEric  Spiegelman has a Web video hit on his hands. “Old Jews Telling Jokes,” a series of short clips featuring exactly what the name suggests, is popular, viral and cheap to make.

Alas, it’s not profitable. Spiegelman says he spends considerably less than $1,000 for each one-minute episode, and the 50 episodes he’s made so far have generated some four million views since February. But advertising for the series, sold via Web video distributor blip.tv, doesn’t cover his costs.

Spiegelman is pretty sanguine about this, but I find it a bit frustrating. We’re several years into the Web video era–almost three years after Google (GOOG) bought YouTube–and this is the kind of stuff that should work by now. It’s original, ad-friendly, and made on a shoestring budget. If that can’t work, what will?

In any case, Spiegelman can afford to wait a bit for things to right themselves. His company, Jetpack Media, is a unit of indie movie studio Greenstreet Films, so he has a bit of a cushion while he figures out how to crack the code.

And in the meantime, he’s hedging his bets by using his Web series as a way to get back into old media, where you can actually get paid for stuff you make, in advance.

Spiegelman has repackaged the first season of his clips into DVD form, which will be sold by First Run Features (you can pre-order the first disc for $19.95).

Next up: A book deal with Bertelsmann’s Random House, via its Villard imprint, with photos from Gawker contributor Nikola Tamindzic (anyone who follows the blog-to-book minimarket will not be surprised to learn that ICM agent Kate Lee brokered the deal).

And Spiegelman can imagine other ancillary products down the line. Perhaps an audio show based on jokes that people submit via a hotline. Use your imagination. Which I guess is what you have to do if you want to make a living making Web video in 2009.

Oh, the videos themselves? They’re a lot of fun. You may have heard of a few of the joke-tellers–former New York City Mayor Ed Koch is a contributor/performer, as is real estate mogul Harry Macklowe–but the rest are fairly anonymous types who have a way with a story and a punch line. Below, a quick interview I taped with Spiegelman last week, and below that, a few of the joke-tellers themselves (Warning! These feature a couple of judiciously chosen curses).

Back for Yet Another Season: The “What Will GE Do With NBC?” Show

the_office_promo_pic_nbc

Even when the M&A market was shut down, Wall Street couldn’t stop speculating about GE’s intentions for its NBC Universal unit. And now that it’s deal-making time again, the chatter is getting very noisy.

Hence the flurry of coverage over yesterday’s remarks by Vivendi CEO Jean-Bernard Levy, in which he said…not very much.

But even Levy’s noncomments are important, since his company may have a good deal to say about the fate of NBCU. That’s because Vivendi owns a 20 percent stake in the company, and it looks increasingly likely to sell this year. And that could trigger a whole series of moves. The Wall Street Journal:

Vivendi, the Paris-based entertainment conglomerate, has an annual option to unload its NBCU stake which it is allowed to exercise beginning each November. The option was part of a deal made in 2003 when Vivendi sold its theme parks and television assets in the U.S. to GE for cash and stock.

If Vivendi exercises the option this year, Mr. Levy said, it will plan to offer the shares in the public stock market unless GE exercises its right to buy the stake.

If Vivendi says it will exercise the option this year, GE would have nine months to pony up an estimated $4 billion to $5 billion if it chooses to buy Vivendi’s stake at a time when it already is struggling to shore up its financial position. Otherwise, Vivendi’s minority stake in NBCU could be put in play, raising a host of potential complications for GE’s ownership of the media company.

Yet another option: GE (GE) and Vivendi work together to sell off all of NBC via a direct sale–Comcast (CMCSA) and Time Warner (TWX) are the names you always hear as obvious strategic buyers, though I’m not sure that’s the case–or even via an IPO.

Twitter Goes for Broke, if Broke Means “A Lot of Money”: New Funding Round at $1 Billion Valuation

twitter williams and stoneIs Twitter a billion-dollar company? It is now, according to its investors. People familiar with the company tell me it has raised around $50 million in a funding round that values the start-up, which has no real revenue to speak of, at about $1 billion.

TechCrunch, which first reported the funding, says CEO Evan Williams informed his employees about the new deal at a recent companywide meeting. I’m told the round is all but finished: “If the money isn’t in the bank yet, it will be soon,” a source tells me.

No word on who has invested in the company in this go-round, but it’s almost certain Twitter was able to entice new backers to join its existing investors: Silicon Valley logic dictates that each successive funding round should attract new money.

In February, Twitter raised approximately $35 million in a round led by Benchmark Capital and Institutional Venture Partners that valued it at $250 million.

And just to spell this out–Twitter’s new investors, along with older investors who have reupped, believe the company will ultimately be worth much more than $1 billion. In order to get a return on their money, they will expect it to hit $3 billion or more.

Feel free to debate the merits of Twitter’s growth prospects, and its chances of creating a real business out of all of those 140 character messages its users create.

But in retrospect, this funding round seems obvious: Twitter’s founders have insisted that they want to build the company on their own instead of selling it to the likes of a Google (GOOG) or Microsoft (MSFT), and they’ve already turned down Facebook. And if they weren’t going to sell, raising yet more money to give the company time and resources to build out a real business is the logical choice.

Here are Williams and co-founder Biz Stone talking to Walt Mossberg and Kara Swisher at the D: All Things Digital conference in May. Discussion of the company’s future as a standalone business kicks in around the 31-minute mark.