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Thursday, January 20, 2005

CNET bows to the power of blogs

CNET formally announced that it is adopting technology that enables readers to see how blogs have responded to its reporting and analysis. CNET will include TrackBack link notifications on stories on CNET News. CNET News began supporting TrackBack links in late November, but waited until now to confirm the policy with a formal announcement. TrackBack was developed by blogging software company Six Apart.

This is a critical development for four reasons:

1. This is a tacit admission that mainstream media companies like CNET are threatened by blogs.
The combination of cheap and easy Web publishing and the fact that search engines favor narrowly-targeted Web sites will lead to a proliferation of niche, "category-killer" Web sites. Those "category-killer" Web sites pose a threat to diversified online and offline media companies like CNET and TheStreet.com. Consider CNET's subject matter: technology. Blogs like MobileBurn, MobileTracker and PhoneScoop now do a better job of covering mobile phone technology than CNET, Engadget and Gizmodo have swifter and better coverage of general consumer gadgets, and Ars Technica has better coverage of gaming software. CNET's adoption of TrackBack is recognition that blogs are gaining market power in the publishing industry despite the fact that individual blogs have lower readership than CNET's sites. This is the competitive impact of the long tail.

2. CNET's adoption of TrackBack links will further fuel the growth of blogs.
CNET is trying to leverage blogs to enhance its content. But by integrating TrackBacks into into its articles, CNET will further enhance the status of blogs and boost traffic to them. Ben Trott, Six Apart's founder and CTO, is quoted in the press release as saying:

"Their [CNET's] adoption of TrackBack will speed the use of this protocol by other media and by bloggers, who now can get exposure before millions of News.com readers for their comments, insights, and opinions on News.com stories".

3. This announcement further enhances Six Apart's market position.
CNET's adoption of TrackBack boosts Six Apart's market position, lending the weight of a major online media company to a standard defined by a private company. Six Apart is looking like an increasingly attractive acquisition or IPO candidate. It recently raised money, cemented its market position with the purchase of LiveJournal, and now has TrackBack adopted as a standard by a mainstream media company.

4. Blogging will hit stock investors' radar screens imminently.
Investors in publicly traded companies have so far remained generally ignorant about the potential impact of blogging on Internet stocks. Mary Meeker published a thoughtful report on blogging and RSS, but incorrectly argued that they would be a net benefit to YHOO. Companies like CNET will now begin discussing blogging, TrackBack and RSS on conference calls, and the probability of a blogging company going public in 2005 is growing.

Full disclosure: at the time of writing I'm short CNET and TSCM.

Posted by David Jackson on January 20, 2005 at 09:25 AM in Sub-sector: Content, ticker: CNET | Permalink

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Comments

Great initiative. It should be followed by the rest of the big IT companies.

Posted by: Guti | January 21, 2005 04:48 AM

This is a useful first step and should probably be taken up by all providers of content, the "old media" needs to shift.

I would argue that in addition each source should provide comments attached to each story, ideally 2 types: one loosely edited for garbage, the other judged to be of unusual quality.

With these tools newspapers and other traditional outlets can better mantain some degree of centrality. Loyalty is increased by participation and such tools can eat up some blog success. With context based advertising it provides new income.

The "mainstream" media also acting as an central infrastructure to which blog commentary is linked also provides a useful tool for organization and navigation of the vast number of small net publications. There are opportunities in this as well.

- David Bennett (davibennett@yahoo.com)

Posted by: david bennett | January 21, 2005 01:19 PM

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