Old media needs to learn about distribution if they want to survive in the fast-paced online, according to IAC's Barry Diller. Diller says (as quoted in the Financial Times that video and print publishers who resist decentralized content distribution will fall into the same trap of the music biz that has seen copyright infringement and alternative distribution sap their revenue.

Now, if they don’t distribute, then you have the same effects that happen, probably with the music business. If they bury their head in old sand.

Diller is right - decentralization is the only way to reach a broad audience. Unlike the 100 or so channels of TV, there are millions of websites, and pretending that you can pull all the strings (like NBC/Fox) is the wrong way to go. Media companies who want millions of eyeballs need to work with and not against the Joost's and YouTubes of the world if they want the volume of traffic needed for ad-supported video (and print) content.

Today there are dozens of media portal hubs, but that number will shake out to a handful of major stars. But for content that appeals to vertical audiences, media companies will have no choice but to work with a greater number of smaller companies who will know how to find and serve a specific audience.

If you want to know the weather in Bangalore or Mumbai, don't go to weather.com, just answer your home phone.

Companies are offshoring their customer service departments faster than you can say "tax loophole," and now telemarketing is tapping into the large international English speaking population by transferring jobs overseas.

Now I'm not a protectionist, but for me, hiring someone who, as is often the case, is difficult to understand because of their dialect as the first point of contact in introducing a new service is a bad idea. If the company really wants me at a customer, they should be providing the most knowledgeable, easily understood person to broadcast their initial message.

Even though I'm on the do not call list and filter my calls, I still get 3 or more calls per day from mortgage services that employ call centers in India. As soon as I hear someone who is obviously from India talking, I politely tell them I am not interested in mortgage services.

Customer service is different because the company already "has you," and for many services it is easier to deal with the system in place than find a new ISP or wireless carrier. And certainly we import billions of goods from Asia, but consumers don't usually judge the company that sells them dishes or toys based on where the product was made because it is not tangible to the end product.

But marketing is about image and consumer confidence, and to hire people with whom it can be a challenge to communicate (and this goes for poorly trained semi-literate Americans as well) tells me that the company doesn't really want my business.

The question isn't quite as ominous as it may sound, Digg isn't going to create another category labeled coupons anytime soon, at least not that I know of, but there are a few folks out there taking advantage of Digg for their own profit (none of this is new). However, it might not be the same scum of the earth you're use to hearing about.

It all started a couple of days ago when I got an email from Buy.com with their weekly specials and I noticed at the bottom of each special there was a link to add the item to del.icio.us and another to digg the item. I thought that was interesting though not that unusual and figured I'd poke around a bit and see what I came up with. So I looked on Digg and found JeffWisot, a user that has posted 11 links, all of which are to buy.com specials (seriously - those are the only links he's dugg). Now he's not burning up the charts with high numbers of diggs on the links he's dugg, his highest digg has 6 diggs on it, but he is blatantly spamming digg for Buy.com, no doubt he's an employee.

Now when I headed on over to del.icio.us one might think this user would be smart enough to go under a different alias, or to post his buy.com deals with different tracking urls than the ones buy.com used in the email and on digg, but that's just not the case. Low and behold, same story second verse (err link aggregator).

Now there are a few conclusions I arrived at as a result of this little find.
1.) Buy.com is testing social news aggregators and their doing it internally because they're using the same tracking urls in all the links submitted to the aggregators.

2.) Although the other major electronics sites like Circuit City and Best Buy have not yet jumped on board, they will once a site like buy.com cracks the formula.

3.) It may be in the best interest of Digg to create a new category for Coupons because they could take a huge chunk of the market away from sites like fatwallet and coolsavings.

Reasons For My Conclusions

I. Buy is testing this internally
1.) We know buy.com is testing this internally because if it was someone who really thought the buy.com coupons were cool enough to post to digg then they probably would've posted other cool links to digg and del.icio.us as well but they have only posted the same links found in the buy.com email.

2.) Buy.com has an affiliate program and if someone was using that then they would've posted their own affiliate code url rather than the buy.com tracking url.

3.) Buy.com can track these from digg by using the referring url for each visitor as well as the tracking code params embedded in the url. That allows them to determine if someone clicked on it while reading their email or if they came from Digg.


II. Other sites will jump on the bandwagon
1.) This won't happen immediately because, as I'm sure buy.com is realizing now, the traffic from these social bookmarking sites converts terribly. At the end of the day a commercial site is all about making money and they usually do that by selling product. I doubt Buy.com has sold a single product as a result of this experiment thus far.

2.) Once a major retailer does in fact crack the code, the other retailers will be all over it. It's the same as when a porn site finds a loophole in Google's natural search algorithm, it takes a few months before it appears on mainstream sites but it will appear.


III. Digg might create a coupon category
1.) I think there's really something to this. Digg could generate a solid amount of traffic from cheapskates looking for a good deal (isn't that the definition of a geek?). The only catch is that the coupon industry is defined by it's affiliates and affiliates are secretive loners. They don't like sharing secrets about how they make money and as a result, a site like digg would shine a spotlight on the good ones and the rest would catch on much faster than large corporate sites.

2.) On the flip side however, I'm not sure digg wants to get caught up in affiliates and their schemes and sniffing out scams like this buy.com thing is what they're focused on right now.

What Does All of This Mean?
You've got to keep an eye on what's being pushed in front of you at 100mph every second of every day. People are trying to take advantage of ignorance and as technology increases and advancements are made there will always be those who prey on the weak, so don't be weak.

My point isn't to say that buy.com sucks, cause honestly I have purchased more than my fair share of products from them. I think they're just a bit ignorant with their marketing tactics and don't really understand the ramifications of their decision to have an internal hired gun post junk on digg. I'm sure they weighed the prospects of hiring someone with a high trust score versus an internal employee with no reputation and decided to do this internally because using someone externally was simply too risky. I'm sure the thought of a quasi-famous person on digg exposing buy.com's sneaky tactics was a PR nighmare that they just weren't willing to risk.

RealNetworks is offering its Rhapsody music service through a Wi-Fi handheld computer, the Nokia N800 Internet Tablet. While this won't compete with an iPod for convenience, it show that delivering streams over Wi-Fi may be a viable alternative to streaming through the cell phone networks.

RealNetworks is trying to expand its presence in the mobile world. Currently the Rhapsody to Go service lets users swap out music to an MP3 player as long as they are current subscribers, which gives more flexibility than having to purchase the music outright.

However, the U.S. Copyright Royalty Board's decision to double royalty payments will put a hurting on subscription-based services as well as making ad-supported Internet Radio cost prohibitive for most companies. Rhapsody, Napster, AOL and other services stream radio channels for free, but that may be coming to an end soon. It may make music publishers and RIAA happy, but won't please fans or advertisers. It will drive more sales of subscription web and satellite services.

There's just something about the south... No I'm not talking about Georgia or Alabama or Louisianna, right now I'm only speaking of Florida. Most people don't consider Florida to be part of the "true South" and I'm totally fine with that, because I can still get sweet tea in any restaurant in Merritt Island (that's an inside joke that most of my friends on the left coast may never get). For me, the great thing about living on the East Coast of Central Florida is simply the atmosphere. I mean we have great weather, waves, most of the time people are friendly, and you don't have to worry about getting mugged if you go for a walk at night around the neighborhood. On top of all that, and this is one of the best things, almost every one of my friends in the area have no idea what it is that I do... and when I explain the nuances of being a search engine marketing consultant and serial entrepreneur their pupils swell. Why is that something I like? Because it reminds me that the stuff I do really isn't that important in the grand scheme of things and that I can hang out with my friends and family and not even talk about work, you don't have that kind of freedom in the Valley.

Now recently I've been learning more about my area (even though I grew up here) and have come across some really interesting projects. Those projects are from a company (or is it one dude?) here in Central Florida. The ceo, Alex Rudloff, graduated from UCF (like myself) and has quite an interesting background. I just learned that Alex was the developer behind Mr. Calcanis' BlogSmith CMS (it powers all of the blogs running over at AOL now). I find that pretty interesting since I had no clue.

Now lest you think I'm only interested in technologists, I'd also like to share another little treasure my wife discovered in our area. An art gallery slash workshop studio where you can learn all sorts of artistic techniques from local artists. The company is Beach Culture 101 and last weekend Shannon and I took a class from local artist Henry Lund. The class was about airbrushing but if you've ever used spray paint then you can think of airbrushing as spraypainting evolved. The class was great and Shannon and I are looking forward to taking more classes there. My next project is getting Kim (the owner) set up on blogger so she can start sharing more information about the goings on at the studio.

It may feel like everyone in the universe is using Google's PPC network, but that's not true. Consumer publisher Conde Nast's U.K. division passed over Google and Yahoo and is going with MIVA's PPC service.

Conde Nast's 12 websites get more than 54 million page views per month, so it's a significant win for MIVA. Ads will match the content and style of each of the magazine websites.

Google has the network volume and advertiser relationships that makes them hard to beat, but ad relevancy played a role in the switch from Google to MIVA, according to a Conde Nast, as quoted in MIVA's press release.

Relevancy should equal greater click through rates, obviously a major concern for publishers looking to maximize revenue.

ClipBlast has upgraded its video search engine with more detailed categorizations and a cleaner search and browse interface. This is a healthy sign that video search is quickly maturing and will soon be a viable option for advertisers.

ClipBlast doesn't interject video ads into the content, it merely links to other video sources. The interface allows you to search by category such as baseball and by video provider, which makes it easier to find the most desired content.

Google Video continues to be pathetic by comparison, and despite YouTube is not a lock to be dominant in video search. If you look at the "categories" within Google Video, there are links to clips in Russian and German that make no sense to us Yanks.

The big challenge for video search engines is how to maximize revenue. Since they are portals to other websites, they are passing through traffic and today getting revenue from generic display ads. YouTube has some video ads, but their is no contextual advertising. For example, on Google Video or ClipBlast, if you search for skiing, you get links to video, but zero advertising.

Integrating ads into video search remains a mystery that must be solved to attract serious advertisers.

New data from DoubleClick reveals that video ads get twice the click through rate of static image ads. It's no surprise that interactive content is more effective, but I'm wondering why video ads aren't being integrated into contextual advertising and search marketing.

DoubleClick tallied the results from 2.7 billion video impressions and found that click through rates ranged from 0.4 percent to 0.74 percent, much higher than the piddling
0.1 and 0.2 percent of image ads. Video ads are played two-thirds of the way through on average, a good sign for advertisers that people are engaged. You can read the rest of the highlights from DoubleClick here.

So when will the search engines start adding video ads to their search results? If video ads -- which may or may not be relevant to the content -- are so much more effective, wouldn't the click through rates be even higher if they were in response to a query or related to the content? Video ad units could be seamlessly be inserted on the right side of search results and get a premium price, or formatted to the same size of AdSense units.

What am I missing, why is this not happening?

The search for a better search continues to accelerate as hundreds of startups are focused on outdoing Google.

While we all know that search technology is far from perfect today, it is amazing that so many startups have the chutzpah to take on the GOOG. Most of the companies don't aspire to directly compete with Google, but rather establish a niche for themselves by improving one aspect of search.

SearchMe is one of the many aspirants, which are nicely aggregated by Emily Chang, a great go-to guide for all things Web 2.0.

One of the more interesting search tools is Delexa, a mashup that combines data from Del.icio.us and Alexa to show what are the most popular sites by category.

Some of these companies will find an audience and at some point require site owners and advertisers to master their algorithm. Maybe CSOO (Chief Search Optimization Officer) will soon be a standard position at media companies.

Time Inc. has joined the ranks that believe that the best way to grow profits for web properties of print publications is through video. This latest commitment from a major publisher gives further proof that print publishers are going to find it nearly impossible to go alone, and that video advertising is likely to more than double each year for the foreseeable future.

Time Inc. Studios was launched in November to develop video for the websites of its magazines including Sports Illustrated, Business 2.0, Essence, and Time, according to MediaPost. The new standard is for magazine articles to be complemented by video features online, and Time sees a healthy portion of its revenues coming from online and video advertising.

While niche publications and blogs can survive without video, mass-market consumer publications have no choice but to create their own video or partner (like Money magazine does with CNN) with a video partner. Time also sees freeing digital content so that it can be mashed up by users as another ad revenue generator, and will soon be opening up Life's massive library of photographs to the public.

Reading a magazine or newspaper is more convenient when in transit or when getting cozy on a couch, but if you are online, video is becoming a much stronger part of the menu.

Behavioral networks Revenue Science and Tacoda are demystifying how behavioral networks work to take some of the FUD out of participating whether you are a consumer, advertiser or publisher. So far marketers have only scratched the surface of what behavioral targeting can offer, but that may be changing soon.

HowToTarget.com from Revenue Science explains how it works, which potentially should be much more effectively than contextual or search marketing. Similarly, Tacoda published principles for data use to pacify those worried about privacy.

Anyone can hit on a keyword or article once, giving the impression that they are interested in buying something related. But by tracking searches and articles read over time, publishers can get a genuine insight into interests and buying patterns. If you read about or search on fishing equipment every day for a week, that's obviously exponentially more valuable than someone who happens on an article about the last fly fishing lure.

While some of the networks have thousands of sites, many of any individual's searches and browsing will be done outside of any one network's reach, limiting their effectiveness. Also, the privacy implications are huge, as getting access to someone's browsing/purchasing history would at minimum be irritating, and at worst aid identity theft.

Behavioral ad networks should get together and adopt what is expected of publishers and advertisers so that consumers will feel comfortable with multiple networks. No sharing of data to third parties, clear opt-out choices, and period clearing of cookies are a minimum. If they can agree together on standards, each network (and consumers) will be better off in the long run.

Could music downloads be going the way of the dodo? Maybe, according to a report from Pyramid Research. The company says that owning media is overrated, and subscription music services from wireless carriers are the wave of the future.

Per Pyramid: "The report argues that the devaluation of ownership means that models offering access to vast digital libraries on a rental basis are in many ways more compelling than just having access to content that is purchased."

While wireless networks are just about everywhere, iPods have a convenience (going to the gym, on a train, etc.) where wireless connectivity not be so great and you might still want to listen to tune stored locally. It is premature to speculate that iTunes will start fading away anytime soon.

I would agree, however that the teens and tweens of today who are growing paying for satellite radio or services such as Napster or Rhapsody may very likely think that paying for a CD or download is a trite as listening to an LP. If you are just getting into music and don't have an extensive CD collections or iTunes library, would you rather spend $10-$20 per month and have access to everything on demand or pay that much just to here 10 songs over and over again? It would take years before you would have paid for the equivalent of a 100 CD or 1,000 iTunes track library.

“As today’s children inevitably come to own mobile handsets, the delivery of music and any other form of digital content will be over a broadband connection rather than via physical media.”

This also makes "free" music downloads much less attractive since consumers will be used to ad-free music. Has there been a SpiralFrog sighting anywhere? The first quarter is about to end, and still no word from the "revolutionary" music service about when it will launch. The good news for SpiralFrog is that the longer they wait to get started, the longer they put off shutting down....