Are web companies tech or media?

This is TOTALLY off-topic but reading your post just reminded me of the dream I had where I was an aspiring actress at the home of Barry Diller, pleading for an audition to be on CSI. "Please, Mr. Diller, please let me audition!"

Microsoft may be a tech company, but MSN/HotMail is a media operation. Or, maybe, like a FOAF 'relationship', you need multiple values to adequately describe each of these companies... :)

OK, so you already disclaimed yourself up the wazoo in your very first paragraph, so what's the real point here?

If we focus on the more specific "what are the implications for the future of the XML/RSS companies that grow up?" then that shifts things a bit.

It's worth noting that your "media companies" are mostly eyeballs-to-ads companies (vs book publishing, where customers actually pay for the goods with cash).

It's also worth considering that maybe hiring a top media-type person isn't necessarily a "media is more important than tech" decision so much as a "we've spent years building the good tech to aggregate the eyeballs, now we need a complementary media person to sell them" balancing of yin/yang energies...

The WebService industry might really be 2 industries: one for groups generating economic value, who therefore are willing to pay to avoid being ad-distracted, and one for public-content-mixers who will (mostly) prefer free services, at the price of their attention/soul. I'm pretty sure the heads of SAP and PeopleSoft are not from media companies.

Are there any RSS aggregators who are ad-supported? I don't think so, but it's probably only a matter of time. I wonder how many RSS providers will object to having other people's ads around their content? I'm sure some individuals will object. Probably most won't care. But content businesses like the NyTimes might get annoyed - whether they take a legal or technical approach to block aggregators will be interesting to watch... (if you write an aggregator, do you check robots.txt and honor it?)

pardon the blather...

There seems to be something wrong with this sentence:

"Time and again, these companies are choosing to bring outsiders from media companies in as their most senior executives, and only the companies whose geek founders have ."

Seems to me that the answer to this question is somewhat obvious: the sector a company is in is based not on what the company thinks, but what from where the company derives most of its revenue.

Yahoo - a multiple-strategy business. Part media (such as Yahoo and Overture) and part subscription (such as Hotjobs).

IACI - primarily a retail operation. Derives most revenues from commissions from selling travel arrangements. Also has some revenues from subscription sales for properties like Match.com.

Microsoft - easy split - mostly software and a little bit media with MSN being a pure media company as it derives most of it's revenue from advertising.

E-Bay - retail operation combined with a credit-card processing operation (not unlike, say, the old Sears or say GM with GMAC financing - meaning that Paypal, while having other great uses, is viewed as a simplification of the buying process and an additional bite at the apple in terms of revenue). They also are unique in creating a marketplace (ala Nasdaq) that requires no inventory - a very unique thing in retail.

Amazon - retail operation combined with a small amount of software operations.

Seems to me that the problem in determining where internet companies lie isn't with the definition - it's the fact that many are split over multiple business types including e-commerce and subscription.

Of course, this exists (or has existed) in companies of the past. Viacom, for instance, is primarily a media company, but before it divested from Blockbuster, they also had a retail operation going on.

This begs the question: as internet companies grow, will they stay in these businesses that are outside their primary area? I believe the answer is whether or not that anciliary business is/was useful to their primary business verses the cost.

For Viacom, Blockbuster was an outdated business and model that was having a hard time coming into the current market state. Given that it was not having a great impact on their fundamental business - advertising - it was easy for them to decide to divest.

Wall Street wants companies to be concentrated, until that area collaspes - such as with Yahoo - then they want them to be diversified. Then, when the economy picks up, they may move towards a single line of business.

Oh - and one comment to the woman that was an actress with the dream of working CSI for Diller - if I'm not mistaken, Diller's USA was responsible for all of "Law and Order" - so you'd be trying to get on that show. Jerry Bruckheimer runs the CSI franchise and I don't believe he has anything to do with USA. But I could be wrong.

Damian

Bill Seitz is right. It takes a media person to go for the overwhelmingly crass, stupid, unashamed commercialism of big ads and moronic consensual copy real content that is the (lack of) soul of most ad-supported properties (online and offline). Technology people can aggressively ask for an order, but they still have too much restraint to whore their wares like sausage.

Plus there's the sex & drugs vibe of media, which beats cubicles and lava lamps. It's more glamorous than to say you work for a tool company.

Now in real operation terms (which, as Damian said, is what matters), most internet companies are in the media business just like an ad-supported Microsoft Office would be a media product. Look at the jobs for hire at Yahoo or Google or whomever else. When was the last time you saw an opening for a journalist, set designer, camera operator, editor, actor, photography director, or illustrator? The fact is, those companies hire loads of engineers and technical product managers, and that's that. The only thing that makes them (partly) media companies is ad sales.

Hi Anil!

From media economics point-of-view media can be described as a "dual purpose business":

1) Media companies aim to create content that attracts an audience
2) Media companies provide access to their captured audience for marketers

Google fits this definition perfectly. Whether Google's search results have any *journalistic value* is another issue:

In "mediamedia" (TV, newspapers, magazines...) much of the editorial process is editors choosing (from massive amount of information and entertainment stories available) those that are deemed most appropriate for the audience(s) of the media.

In "googlemedia" this process is simply bypassed by "self-service" wants/needs input by a user.

But as the results are just links to other media, where is the value created? In the search results or the content where the search results lead to? How would you find the content without Google results. What value does the existance of content have, if you don't know where it is (ie. don't have access to it)?

I'm not this boring normally, really.

The other way of looking at this is that, when it is tech we are talking about, the service is still a highly distinctive one, with only a few companies able to produce, distribute, and profit from it. As it matures and becomes more standardized, the focus changes, and it becomes about how companies use that mature service. Thus, the former techs evolve toward the media side (intangible, delivered electronically, content) and the tech side is left with the innovators.

Camilo --

Agreed on your points - I was thinking the same thing: that Google, right now, is focused on search technology because that is where innovation is occuring. Perhaps in the next 5 years search will reach a more mature phase and therefore because less differeniated. RCA, for instance, started in producing equipment for TV broadcast and then they started NBC.

Google, in this way, was a bit like DVRs coming around. TiVO started by making equipment, but that is quickly becoming commodity so they are moving into - surprise - the media end (they continue to work on tech, but I just thought it was interesting).

Google burst on the scene with an innovative search service and suddenly everyone is innovating search. But search may flow back to commodity status again and Google will be left with...wait for it...media!

So Google will probably become more media like until they make their next move - which I believe will be into auctions/classifieds and challenge E-Bay.

Alex (above) asked the question: "But as the results are just links to other media, where is the value created? In the search results or the content where the search results lead to?"

I think the answer is neither the search results nor the content. It's the prioritization of them.

In response to another comment, the one by Damian, that "the sector a company is in is based not on what the company thinks, but what from where the company derives most of its revenue": In other words, the outcome of the company's product, not the underlying mechanism of it. No reason for developers to not head up companies but they need to shift their focus when making a pitch. People don't care HOW Google created its product. They only care what they can DO with Google's product. Tools are great but they're not the point (to most folks anyway).

The distinction between tech and content is a false one, Anil, IMHO. You know as well as anyone how much grey area there is.

As an advertising hack, in my rookie years we were expected to do everything- TV, radio, print, posters, direct... that expectation has not transferred over to the internet, and that surprises me. Internet advertising is still considered an entirely seperate discipline than "traditional". Again, a false distinction, IMHO.

Dumb question but perhaps companies with Tech origins bring in media people to head things up when they need to convey their message to a larger audience, to the average wingnut like me? Calling Real Networks "Ad ad-supported, streaming content platform"doesn't amount to much if you don't have someone up front who can explain to Joe Schmoe why its different than turning on the TV.