Monday, February 13, 2006

Investing in open source media?

Fortune senior editor David Kirkpatrick has some interesting advice for investors (both individual and venture-oriented):

Take a look at Open Source media.

Well, in particular, take a look at the company that owns Slashdot and its sibling site Why does that seem odd? Well, because they both deal in and with open source journalism, open source software...point being they're not selling stuff. The public company that owns these two open source sites also owns an e-commerce site, but Kirkpatrick thinks the value is really in acquiring knowledge about what early adopters are doing. (And, less intangibly, the opportunity to advertise on the sites, and on the millions of emails sent via the sites.)

The only thing I find a bit strange about the article is this paragraph: hosts hefty amounts of advertising from the likes of IBM (Research), AMD (Research), Sun (Research) and, surprisingly, Microsoft (Research). Many of those same companies -- including Microsoft -- plus HP (Research) and Tivo (Research) among others, also contribute huge amounts of code to the site to help improve open source projects underway.

My S.O. works for one of the companies that is supposedly "contributing huge amounts of code", and he has mentioned more than once that he and his fellow developers are urged to stay away from open source code, so that there is no potential for incorporating anything from it. (One of the key requirements of open source is that you have to give back to the community enhancements you make to open source projects.)

Anyway, Kirkpatrick is really talking about the opportunity to buy mind share with a very targeted market. It's taking the contextual commerce working so well for Google and seeing how you can apply it to non-search channels. I often notice that every new "Web 2.0" business model seems based on advertising. It's clear our poor eyeballs will become saturated with ad messages every single place we go online. (Not unlike those futuristic billboards in the movie Minority Report.)

If that is the case, and there's no reason it won't or shouldn't be, then the way to win is to get ever more targeted and ever more focused on appropriate niches.

Why market to women, or women online, for example, when you can market specifically to women online who are interested in Food, or Health, or Technology?

Keep digging and digging. And refining and refining. Some day Google Ad Words are going to look hopelessly generalized and off-the-mark.

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