UPDATE: Peter Krasilovsky, vice president and program director of Marketplaces for The Kelsey Group, sent in his comments about today's Wall Street Journal article, "Newspapers Think Locally for Online Ads: Sales Efforts Increase, but 'Smaller Dollars' Prove Hard to Chase."  More about the WSJ article and a recently-released relevant resource from NAA are below this update.   Here are Krasilovsky's comments:

Melinda Gipson, formerly of the Newspaper Association of America and of GateHouse Media, attended the Stanford AlwaysOn Summit last week.The following is one of Gipson’s reports. Watch this space for information about where to find more newspaper-oriented coverage from Gipson of the AlwaysOn Summit.

AlwaysOn Ups Ante Naming 250 Stars in ‘08

Palo Alto, CA – Tony Perkins has probably earned the right to crow. He famously predicted the “dot-bomb” right before it went off, for instance, and through the darkest aftermath, companies he and his AlwaysOn advisors picked as leading potential entrepreneurial investments have managed to stay ahead of the curve for profitable exits. In venture capital or VC-speak, an “exit” is that point at which early investors see a return on their investment, either through the company going public – as likely this year as a woman in the White House – or in today’s more common “merger.”

Being a member of past AO 100 companies gave you about a third of a chance to exit at three times the industry average, Perkins claims. A study from the 451 Group found that, among the previous AO 100 companies 23 companies have been acquired in just the last 12 months for a total of $5.5 billion.  Microsoft

Deals are clearly down from a 2005-2006 high of 27, and – depending on who you ask – all were bought out by another company rather than through public offering. Microsoft is the largest “serial acquirer” of AO firms, having now bought six of them.

That said, the yearly listing is somewhat misleading – companies that have appeared on past lists may recur – among this year’s top 250 are many repeats such as Aggregate Knowledge, Digg, Facebook, Gaia – last year’s winner – Topix, Tremor, Trulia, Yelp and Zillow, being among those already familiar to newspaper companies in one way or another.

There’s a long list of “green tech” start-ups, which, while probably worth watching, don’t have a lot to do with publishing; and infrastructure plays – other than making the point repeatedly that selling software as a service is here to stay – don’t generally become competitive game-changers.

Four categories do: Mobile, Consumer & Community, Online Advertising Service Providers and Enablers, and we’ll cherry-pick each of these a bit to raise a flag or mark trend lines.

But we don’t want to miss the forest for the trees. A few key trends are worth highlighting without being tied to any single company.

1. Angels are becoming the new early-stage investors and VCs of Silicon Valley, but entrepreneurs in large measure are shouldering more of the burden to become profitable fast. In this economy, start-ups generally are being asked to make it farther on their own steam using their own seed capital, and to demonstrate larger growth rates and revenues before measuring up to even angel investment. As Ron Conway, founder of SV Angels, put it, “It takes more money to fund a mediocre business than a great one.”

Investments of $500,000 at a time – what a panel of angel investors referred to as sufficient to establish “microcaps” – may in large part be viewed as sufficient start-up cash because it just takes less money to start a tech company these days. There’s so much disruption in the ecosystem of the Web that companies like StumbleUpon, Digg, Twitter, and Spiceworks all were built on rapid internal growth, until they got to the point where they sometimes need to jump a chasm to bigger growth and “build the plumbing” required of a larger company, as one investor described it.

Sarbanes-Oxley compliance certainly puts a crimp on growth, and may create the kind of leverage that causes smaller companies to sell out earlier than they might otherwise, just to acquire the kind of infrastructure needed to support the reporting requirements, investors complained. But companies aiming to grow from the start have to invest in SOX plumbing from the get-go, because just like a house built without it, it’s much more costly to add later.

2. While green investments are widely expected to grow by 10 percent or more in the coming year, summit attendees surveyed say that the digital entertainment sector expected to receive the most funding this year is mobile (43 percent of voters thought so, as compared with 25 percent of respondents who thought social media would lead, 20 percent who voted for content and 11 percent who picked tech enablers.) Mobile also was voted as the sector most likely to see more M&A activity, and within the category, the the biggest opportunities were seen for mobile content. As for total investments, mobile was ranked a close third after “greentech” and digital entertainment in total anticipated investment dollars this year.

Those most in the know about mobile – panelists from Nokia, Google, and Qualcomm – all predicted that carriers will likely have to find a way to share the individual handset location coordinates that are so instrumental to applications that can be personalized to a given cell-phone user. There’s just too much upside opportunity there to be ignored, they agreed. Multiple Google panelists affirmed that the new Android operating system, on track to be available in commercial phones by Q3, will be flexible enough to accommodate many applications never envisioned by the search behemoth. It will, as one asserted, be “nothing like Microsoft.”

3. Several entrepreneurs, and their investors, managed to comment in completely different contexts that no-one has managed yet to crack the code on “local” services online.  Among those on the AO 250 who are trying: OpenTable and NearbyNow. Though it didn’t make the AO list, Outside:in did present in the summit CEO forums and pointed out that its local BuzzMap of most blogged about places in D.C. Maryland and Virginia, is now live on on the site of its partner WashingtonPost.com.  And BookingAngel.com, an Australian company poised to give OpenTable a run for its money, said unequivocally that Internet Yellow Pages are “dying.” A most concerted effort among all local leaders appears to be a focus on some version of a “pay for results” or pay-per-booking business model. But, at least in the case of BookingAngel, the reservation works automatically, generating a qualified lead sales opportunity until the prospective business client is virtually forced to reject business or pay between $3.50 and $8 per reservation. If the local search marketplace in increasingly populated, it certainly appears that the survivors will have at least proven their right to survive.

4. The more mature the Internet supposedly becomes as an industry, the more likely companies sound like they were named by a 4-year-old.

Today’s Online Publishing Update is here on the Digital Edge blog to make room for a special edition of the OPU that NAA e-mailed to Digital Media Federation members this morning. Want to get the OPU in your inbox? Check it out here today and get it 3x/week by joining the Digital Media Federation! If you have questions about the OPU or about the Federation, please ask me at beth.lawton@naa.org.

We’ve published a new Snapshot from the Edge!

Normally, Snapshots are digitally focused: Past Snapshots included those about newspapers using Twitter, live-streaming video interviews with presidential candidates, and creating interactive grocery carts.

But this one is about the first newspaper to take an idea that originated in the tech community and run with it – offline. At the end of CopyCamp, newspaper staffers had stronger community connections and a bunch of good ideas.

CopyCamp Brings Community Offline and Into the Newsroom

At a time when newspapers are trying to connect with their readers through article comments, social networks and other Web 2.0 tools, The San Jose Mercury News took a step in the opposite direction.

“Nothing beats just sitting across the table from someone else and having a conversation,” said Mercury News business reporter and columnist Chris O’Brien.

Continue reading…

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NAA's PRESSTIME magazine has extended the deadline for the 20 Under 40 awards. Here's the announcement:

Help us honor the industry's top young talent. The deadline for nominations for PRESSTIME's 20 Under 40 awards has been extended to Aug. 15, 2008. The annual awards recognize high achievers from all parts of the newspaper industry and from newspapers of all sizes. Winners are profiled in the December issue of PRESSTIME and on www.naa.org/presstime.
 
Go to www.naa.org/presstime/20under40entry and submit a nomination today.
There is no limit to the number of nominations that can be submitted, but nominees must work for NAA-member newspaper companies.
 
For more information, contact PRESSTIME Associate Editor John Heys at (571) 366-1108 or john.heys@naa.org.

Melinda Gipson, formerly of the Newspaper Association of America and of GateHouse Media, is live blogging from the Stanford AlwaysOn Summit. Melinda will be giving us a wrap-up for newspaper editors and publishers early next week. Her live coverage is at newzmaven.com.

From the conference Web site:

The AlwaysOn & STVP Summit at Stanford is a two-and-a-half-day executive gathering that highlights the significant economic, political and commercial trends affecting the global technology industries….

Who attends: Seven hundred technology, media and advertising CEOs, business development officers, media buyers, venture capital and private-equity investors, and leading members of the press and blogging community.

Yesterday afternoon on Gawker.com, Sheila McClear wrote a piece on why newspapers should no longer allow comments on articles.

“Comments are thought to be an added value to a newspaper's site—providing another reason to read. You come for the article, and stay for the interesting discussion,” she wrote. “The only problem is, there is no interesting discussion. Almost never. Not even from the mythical supersmart New York Times readers.”

McClear goes on to provide examples of the inappropriate comments that commonly appear with many newspaper articles online – and the reason why many newspapers have “report this comment” links prominently placed alongside comment sections.

“You could argue that newspapers should rigorously vet and moderate their comments, or at least require them to use their full names. I'd argue that this is a silly misuse of their time; I'm not suggesting that newspapers should actively patrol their comments, like this and some other Web sites do…. I'm suggesting they get rid of them altogether.”

But comments have served newspapers very well in the past several years. USA Today and other newspapers have gotten news tips and information from story commenters, which have improved reporting. In addition, allowing readers to comment – and having reporters or editors participate in those discussions – creates a new positive connection with the community and can help build the newspaper’s brand. Comments drive traffic, too, and encourage readers to return to the newspaper’s Web site multiple times each day.

In NAA’s “Online Community Cookbook,” Rich Gordon of Northwestern University wrote, “Time and again, interactive services have found that interpersonal conversations drive usage and loyalty much better than passive consumption of content.”

But comments are also good for readers. Comments can be entertaining or thought-provoking. They can provide new and interesting information. They can build community.

“Another important usage-driving experience uncovered by Readership Institute research was labeled ‘Connects me with others.’ Users describe sites that foster this experience with words like this: ‘I’m as interested in input from other users as I am in the regular content on this site,’ and ‘A big reason I like this site is what I get from other users.’

NAA’s recent research on user-generated content and Web 2.0 tools confirms this. This is especially true with newspaper site-hosted local business directories and reviews, but it applies to other comments on online newspaper content, as well. Among total respondents to a recent survey on user-generated content, 60 percent said comments or user-contributed reviews on newspaper Web sites are somewhat, very or extremely appealing. Of that 60 percent, more than half are non-newspaper readers.

“The ability to rate comments and reviews in terms of their helpfulness, the ability to see the commenter/reviewer profiles and privately message those people are also interesting to respondents,” according to the report.

The solution to McClear’s criticism of newspaper site comments is improved moderation, community management and active participation by newspaper staff. Removing the commenting ability of newspaper Web sites would hurt both readers and the newspaper.

If McClear doesn’t like comments on articles, she can always just not read them.

To learn more about effective community management on newspaper Web sites, go to www.naa.org/digitaledge/cookbook.

To learn more about user-generated content opportunities for newspaper Web sites, go to www.naa.org/ugcopportunities.

Also, be sure to register for tomorrow's NAA Webinar on UGC.

Note: Some content on NAA.org is only accessible by employees of NAA member newspapers. You will be presented with a sign in page when you click on the links above. Your default user name and password (both!) are your business e-mail address. You can change your password by going to NAA’s Member Center after you have signed in.

There’s no doubt newspapers are cutting back on business reporting, original international reporting and features reporting (especially reviews), and the Summer of Layoffs is certainly in full swing.

But even with the bad news and falling stock prices, newspaper editors feel torn, according to “The Changing Newsroom: Gains and Losses in Today's Papers,” from the Project for Excellence in Journalism.

The changes that come with the Web and other new technologies are exciting but scary. “Editors feel torn between the advantages the Web offers and the energy it consumes to produce material often of limited or even questionable value. A plurality of editors (48 percent), for instance, say they are conflicted by the trade-offs between the speed, depth and interactivity of the Web and what those benefits are costing in terms of accuracy and journalistic standards,” according to the research. “A slightly smaller percentage (43 percent) thinks ‘Web technology offers the potential for greater-than-ever journalism and will be the savior of what we once thought of as newspaper newsrooms.’”

New job requirements are drawing in younger journalists, but older journalists (and their institutional knowledge) are leaving. “Newsroom executives say the infusion of new blood has brought with it a new competitive energy, but they also cite the departure of veteran journalists, along with the talent, wisdom and institutional memory they hold as their single greatest loss.”

There are fewer reporters and fewer editors at many newspapers to write stories and catch any errors, but more than half of those surveyed (56 percent) “think their news product is better than it was three years earlier.”

PEJ’s study was based on interviews at newspapers in 15 cities and a survey of senior news executives from 259 newspapers. PEJ reported better than 1 in 5 U.S. daily newspapers participated in some way. PEJ and Princeton Survey Research Associates conducted the study in the first quarter of this year.

The Digital Influence
In a section on “The Influence of the Web,” researchers found the Web is the second biggest influencer on newsroom culture – behind, of course, financial pressures

“Editor’s responses indicated, often with a sense of surprise, that the growth of newspaper Web sites has also had a positive impact on the content of the newspaper itself. Interviews and survey results strongly indicated that — contrary to early conventional wisdom — the print and Web site versions of today’s daily newspapers can be complementary and mutually strengthening,” PEJ reported. Still, nearly half (48 percent) of the study’s respondents said they felt “conflicted” about the Web – 5 percent more than those who said they were “excited” about it.

Regardless of how newspaper editors feel about the Web, there’s no doubt multimedia skills are of the utmost importance. Predictably, 100 percent of respondents said “writing skills” are essential. Ninety-six percent of editors said “overall computer skills” are essential, and 90 percent said “multimedia skills” are key.

Required skills aren’t all that’s changing. It was long true that journalists rarely arrived at work before 9 a.m. However, the PEJ study found an increasing percentage of newspapers are adding “early” teams to cover breaking news that happens just hours after the print newspaper hits the driveway.

Along with new hours, the Web has also spurred new jobs – especially online newspaper videographers and mobile journalists who work primary in the field and spend less and less time at their “desks.”  The majority of newspaper editors included in this study said mojos make very positive contributions to the newspaper.

“More than three-quarters (78 percent) of those editors in newsrooms where reporters had been trained to shoot and file video footage from a remote location said they found “Mo Jo’s” contributed either ’some’ or ‘a great deal’ of value to the news product. Among editors of larger newspapers, the positive response was even higher at 90 percent,” according to PEJ.

In addition to mobile journalists, staff-written blogs, online video and other Web elements will be fundamental as the newspaper continues its forward move into the digital media age. PEJ reported, “A growing number of publishers and editors, having concluded the era of print newspaper domination has ended, now believe the future of their newsroom depends on how well they can do two things:  (1) Establish themselves as strong, relevant Web content providers for a generation of online news consumers; and (2) Maintain relevant, compelling content for the newspaper’s print edition that remains the industry’s primary, albeit diminished, cash cow.”

The full report is available at journalism.org, the Web site of PEJ.

Although DrudgeReport.com again has the highest number of sessions per person by far, MSNBC now tops Yahoo! News on unique audience.

Nielsen Online provides these numbers to the Newspaper Association of America on a monthly basis, showing traffic and sessions per person* to the top 30 sites in the “News” category based on May 2008 numbers. It takes into account U.S. home and work Internet usage, and it shows both unique visitors to each brand or channel and sessions per person. (For more information about the sourcing of these statistics, please visit www.netratings.com.)  

Newspapers

The Deseret Morning News, based in Salt Lake City, Utah, suddenly moved into the top 10 on the sessions per person list; the newspaper wasn’t listed last month. The newspaper instituted a redesign last year that included article commenting, a “most popular” list and several other features that have increased traffic to the site. However, The Deseret News was not able to explain the sudden jump this summer in Nielsen’s numbers, as they don’t reflect internal numbers.

Other newspaper moves on the list from last month to this month:

• Gannett’s Newspaper Division moved down just slightly, from 12^th place to 13^th.
• The Star Tribune moved up to 15^th place from 19^th.
• The New York Times moved 16^th place, down one spot.
• Media General moved down two spots to 18^th.

In the bottom 10 of this list: Hearst Newspapers Digital, the Milwaukee Journal Sentinel and washingtonpost.com moved up slightly; USAToday.com dropped slightly; and, Cox Newspapers moved off the list (from 28^th place last month).

Like last month, 10 of the top 30 in this list are newspapers or newspaper companies. (For more newspaper company metrics from Nielsen, click here.)

* Note on the following numbers: Auto-refresh features on Web sites (i.e. when a Web site page reloads automatically) does not increase the number of sessions. For more information about the metrics, go to www.netratings.com

 ^ Indicates Home and Work audience duplication projections did not meet minimum sample size standards. Combined home and work audience estimates for these sites may exhibit increased variability month-to-month as a result.

Brand or Channel	Sessions per Person	Unique Audience ('000)
1. drudgereport.com	21.2	2,709
2. Daily Kos^	10.0	936
3. Fox News Digital Network	8.2	10,471
4. AOL News	8.2	22,081
5. CNN Digital Network	7.3	33,417
6. Yahoo! News	7.1	34,992
7. Deseret Morning News^	6.4	905
8. Google News	6.4	10,543
9. ksl.com^	5.9	982
10. Netscape	5.8	1,690
11. MSNBC Digital Network	5.8	37,644
12. Breitbart.com	5.7	1,980
13. Gannett Newspapers and Newspaper Division	5.1	12,405
14. Newsmax.com	5.1	2,711
15. Star Tribune	5.0	1,844
16. NYTimes.com	4.5	17,650
17. Townhall.com	4.4	1,025
18. Media General Newspapers	4.4	1,798
19. Real Clear Politics^	4.4	1,008
20. IB Websites	4.1	6,079
21. WorldNow	4.1	7,957
22. TWC News Websites^	4.1	1,114
23. Milwaukee Journal Sentinel	4.0	1,450
24. USAToday.com	3.9	9,626
25. wasingtonpost.com	3.8	9,062
26. Hearst Newspapers Digital	3.6	7,372
27. Gannett Broadcasting	3.6	4,806
28. Cox Newspapers	3.4	5,122
29. GTGI Network	3.4	1,631
30. worldnetdaily.com	3.4	1,209

NAA has been cranking out the reports this summer -- here's the latest one:

Local Search: Strategies for Audience and Revenue Growth
www.naa.org/localsearch

Newspapers are finding new and varied ways of tapping into the search space. Some are blending news and targeted advertising content with more sophisticated search tools, at times supplemented by human hands to differentiate them from the competition. Others are partnering with such potential "frenemies" as Google and Yahoo! to sell pay-per-click contextual advertising.

The case studies in “Local Search: Strategies for Audience and Revenue Growth” examine several strategies, including:

• Boston.com’s creation of integrated search and its use of “search as platform.”
• Freedom Interactive’s companywide priority on search sales, integrating search optimization with traditional advertising in its markets.
• Ottaway’s metadata-sharing partnership with Google to bolster its regional directory sites.
• GateHouse Media’s product search strategy.
• NH.com’s consolidation of disparate verticals into a statewide directory to drive critical mass.
• Savannahnow.com’s use of SEO as a sales tactic to sell a blended array of services.

Go to www.naa.org/localsearch.

Note: When you click on the link above, you will have to log in to NAA.org to view the report. Please use your business e-mail address to log in. You can change your password through NAA’s Member Center. Please let me know if you have any questions about this.

Related Report
For even more on local search and local shopping, see last year’s "Newspaper Online Shopping Report: Online Relationships with Retailers," by Peter Krasilovsky.

As part of our recently released report on user-generated content opportunities for newspapers, NAA asked four digital media leaders to write down their thoughts on the topic. The following is an excerpt from one of those essays. The full report, including the opinion pieces, is available at www.naa.org/ugcopportunities. 

The following comes from Ray Marcano, Internet General Manager for Cox Ohio Publishing:

Don’t worry.

That’s, generally, the advice I give when I’m asked about user-generated content. Some sites still shy away from information contributed by its readers, citing legal worries, inappropriate postings and even the sanctity of journalism as their reasons.

Don’t worry

User-generated content gives e-paper sites a tremendous opportunity to reconnect with its users, foster a sense of community and provide community connections in unparalleled ways.

…

What about the worries? In the last few years, as we’ve aggressively ramped up user generated material, there have been precious few problems overall. True, our message boards have been challenging at times, and there are some that we spend more time on than others.

But otherwise, we generally don’t have to worry about inappropriate information because our users tend to be responsible and respectful.

For more about user-generated content opportunities for newspapers, see "Engaging Users: User-Generated Content and Tools for Newspapers" at www.naa.org/ugcpportunities.

Posting this on behalf of NAA's PRESSTIME magazine:

There's still time to highlight your organization's top young talent. Nominations for PRESSTIME's 20 Under 40 awards are due July 31, 2008.

The annual awards recognize high achievers from all parts of the newspaper industry and from newspapers of all sizes. Winners are profiled in the December issue of PRESSTIME and on www.naa.org/presstime.

Help us honor the industry's rising stars. Go to www.naa.org/presstime/20under40entry and submit a nomination today. There is no limit to the number of nominations that can be submitted, but nominees must work for NAA-member newspaper companies.

For more information, contact PRESSTIME Associate Editor John Heys at (571) 366-1108 or john.heys@naa.org.

As part of our recently released report on user-generated content opportunities for newspapers, NAA asked four digital media leaders to write down their thoughts on the topic. The following is an excerpt from one of those essays. The full report, including the opinion pieces, is available at www.naa.org/ugcopportunities.  

The following comes from Jay Horton of the Tallahassee Democrat:

The opportunity for newspapers is to use the incredible platform they have built with the broadsheet, their newspaper/city site, and the whole host of special sections and products they publish and challenge themselves to determine if they truly build community. Are they built around passions of the people who read them? If so, the next challenge is to create the opportunities for them to contribute. Make it easy. Give them the tools to share with their friends and family.

 

The most important thing for our businesses is to track our UGC contributors and their audiences and aggregate them, so our advertisers have an opportunity to reach the critical mass they need to deliver successful ad campaigns.

Read more about opportunities in UGC, including the rest of Schaffer’s piece, at www.naa.org/ugcopportunities.

As part of our recently released report on user-generated content opportunities for newspapers, NAA asked four digital media leaders to write down their thoughts on the topic. The following is an excerpt from one of those essays. The full report, including the opinion pieces, is available at www.naa.org/ugcopportunities.  

The following comes from Jan Schaffer of J-Lab, The Institute for Interactive Journalism:

Citizen media sites are high-touch ventures, as news organizations that have pioneered in this area will attest. They require attention and stroking from editors willing to be both cheerleaders as well as content wranglers….

 

Still, there are several other opportunities for user-generated content on newspaper Web sites, and they go beyond individual blogs or postings on forums or bulletin boards. Some have met with success and some are as yet untapped. Here are some things to consider:

 

• Eyewitness Accounts

• Eyesores, Fix-its

• Crowdsourcing

• Game the news

• Micro-grants for local community news sites

Read more about opportunities in UGC, including the rest of Schaffer’s piece, at www.naa.org/ugcopportunities.

This is one of the messages NAA has been trying to get across for the past few years, and it’s nice to hear someone else say it.

Acknowledging a really unpleasant June for the hundreds of newspaper employees who have been laid off while noting the online success and overall importance of newspapers, The New York Times Outpost blogger Timothy Egen wrote:

What started as layoffs and buyouts is edging toward closures and bankruptcies.

And here’s the great paradox: All of this bad news is coming at a time when the audience and reach of many newspapers has never been greater. The Internet may kill the daily newspaper as we know it, but it’s allowed some papers to increase their readership by tenfold.

Those who revel in the life-threatening trauma that newspapers are going through, saying they brought it upon themselves by being too liberal, too sensationalistic, too banal — choose your insult — miss the point. People are not deserting these complex and contradictory summaries of our collective existence. Not by any stretch.

Measured purely by number of readers in all formats, many newspapers have never been more successful.

The rest of the blog entry is here.

The possibilities for user-generated copy are as wide open as the editors and newspaper executives contemplating its use allow. While it must be acknowledged that there are stories, photos and reporting that only a professional can perform, it should also be recognized there are countless stories and photos out there a seasoned professional would ignore or choose not to report, but the consumer of a newspaper would find interesting and relevant to their daily lives.

…

The obvious, near-term use for user-generated copy for mainstream media will be to produce copy easily and at low cost that is relevant to their readers. It is important to note that user-generated copy must be treated just as any other copy in the newspaper environment, which means it may not be the staff-cutting tool accountants envision.

 

Editors still need to fact check and copy edit, and indeed need to be more diligent with copy coming from people they do not know and trust. There can be cost savings, but more importantly, by making readers part of the news gathering community there will be more feet on the ground finding significant stories as well as heart warming community features.