Is the Gawker-Yahoo Deal Important?

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Gawker, a blog network similar to Weblogs, Inc., and Yahoo announced a syndication deal today that brings Gawker content to Yahoo News. Content from the largest Gawker blogs is already included – Wonkette, Gizmodo, Defamer, Lifehacker, and Gawker itself. More may be coming.

The financial terms are undisclosed, but here’s what is now on Yahoo: Gawker brands and content are pushed throughout the news home page. Clicking on associated content pulls up a Yahoo page with the Gawker content (example). It does NOT redirect to Gawker.

There is a single link to Gawker on the content page (clicking on the brand name). Otherwise, it’s an all-Yahoo experience. If I was doing the deal, I’d expect a revenue split in Yahoo’s favor on ad revenue generated from the page. Gawker gets that revenue, the branding, and some links directly to the blog. This is purely speculation, but my best guess.

Is this an important deal? Yes, in that it shows Yahoo embracing blog content. The guy at Yahoo to get to know is clearly Scott Moore, named by Wired in their last print edition as VP Content Operations. Scott is hiring bloggers (such as Kevin Sites) and doing these kinds of deals with Gawker. These are smart deals for Yahoo – they generate page views where they can put lots of ads. If the deals are revenue share, then it’s a no lose proposition for Yahoo.

But what Yahoo is noticeably not doing is acquiring Gawker, like AOL did with Weblogs, Inc. That means liquidity events for bloggers are limited – the GYMs (Google-Yahoo-Microsoft) are not yet in content buying moods.

So perhaps the networks and very large blogs can cut deals to increase page views on content and generate revenue. Will this model work for the long or medium tail of blog content? My guess is no…the GYMs will want to control quality and that doesn’t scale with more than a small number of blogs. But certainly we’ll see more deals like this, particularly as long as the advertising market is strong and demand for inventory is outstripping supply. The portals need content, and this is a cheap way to get it.

A lot of people are focusing on the fact that the deal is incorporating blog content directly into Yahoo news results. While I find this interesting, we’ve already seen Yahoo experiment with this with their blog search product. Clearly Yahoo is defining the definition of news to include blogs (as they should), and I applaud this.

But back to the title of this post. Is it an interesting deal? Yes, but mostly because of what the deal isn’t – it isn’t an aquisition of Gawker.

Read more analysis of the deal at Read/Write Web, Paid Content and Memeorandum.

  • Steven Long

    I know you’ve gotten a great deal of feedback about this, but I’m passionate about the subject (the maelstrom swirling around mp3s and the music industry was one of the stronger shoves that pushed me in and through law school).

    “A startup built on a business model designed to work within a system designed to frustrate the listener’s ability to hear what they want to leaves little sympathy from me.”
    The system is designed to not allow the ‘jukebox in the sky’ that people have wanted, to my experience I wasn’t frustrated by Pandora. I discovered many artists (and subsequently bought albums) through Pandora.

    You seem a bit fixated on the Beatles, but to many of us there are other artists, other genres.

    When I was working in the volunteer tax clinic at my school I’d sign on to Pandora, type in Coltrane. Many of the older folk getting their taxes done would ask me if it was Coltrane they were hearing, I’d got to the computer and check. I’d tell them who it was, I’d get a nod, a smile and they’d tell me that the performer was good and reminded them of Coltrane.

    Maybe the results for the Beatles are terrible, but if you love a band and have memories tied to individual songs: similar music really might not get the job done.

    This unfair and oppressive tax scheme isn’t allowing the free market to do its thing and I checked continuously for openings in the Library of Congress, hoping I could jump in as the voice of dissent. No luck.

  • Victor

    This doesn’t help the situation of music of yesterday, but going forward the new internet players should foster a new frontier and licensing model outside of the current music cartel–leave the old gate keepers to languish in the past.

  • Richard

    Ok I agree that stations should support the independents more but as for the rest of it, I have to strongly disagree.

    It really does sound (intentional or not) that you simply just don’t like pandora’s method of recommending music.

    I have to say pandora it great. Hope they don’t go under. Of course I’m in the UK so I’ve already lost them.

    That’s another thing, how about the entertainment industry wake up to the fact that it is a WORLD stage now. News about great songs, TV, movies spread around the globe at light speed (nearly) so why not let us ALL buy and listen to the great music etc

  • PXLated

    Steve, you’re as wrong about this as you were about Hillary ;-)
    I have to agree with Steven, the Beatles is not a good choice to judge the service, I love blues and Pandora has steered me to artists I would never have known about. When discovered, I head to iTunes and buy.
    I think the artists need to get with a different program themselves so we can support them directly. Would love to do it, iTunes is just easier as everything is in one place and my credit is registered.

  • PXLated

    Ooops, meant to add – Only the artists can break the cartel.

  • Steve Gillmor

    Only when the artists (you) take yourselves seriously will this change. Propping up a route-around to get a simulation of what you’re allowed to is not going to work. Ignoring the financial model behind Pandora is ignoring the cartel’s role in defining it. It’s a setup enabled by dreamers who ignore their own complicity in accepting the service in lieu of what they really want – access to music at a fair price in realtime. Epic Fail, in the language of Twitter.

  • PXLated

    Complicity? Maybe. But what I want is to discover new or alternative artists I can support and Pandora does that. If there’s a none complicit way to accomplish this, I’m all ears.

  • Steven Long

    Pandora gets to serve as one tool (of many) that put independent artists on a more even footing with established (record label supported) bands. MySpace and Pandora give free exposure to bands that the labels will not touch (and many bands that will not touch record labels).

    Pandora is unlike other recommendation systems like Amazon or iTunes where it just looks for overlapping sales, which puts nobodies at a disadvantage. Pandora’s system uses the bizarre ‘music genome,’ which whether you think it works or not (sure it ‘epic fails’ if you’re looking for the Beatles), it does not give an advantage to the platinums selling mainstream.

    Pandora, MySpace and their ilk chip away at the value a label can bring to an artist. There was a time where labels served as gatekeepers to the few ways of getting a band exposure, but no more.

    Pandora and internet radio weren’t sufficiently controlled by the cartel, so they recommended a tax model that would kill them. And that is what the RIAA got. We could try to stand up for the more democratic (open) stage of internet radio, or we can let it fall and hope the bands rise up without having a decent way to gain exposure.

  • Mike Lerch

    What I was trying to get out of Steve was to recognize that it wasn’t an on-demand service, it was Internet Radio, which has parameters it is legally bound to follow. You can’t plug in the Beatles (or any other artist) and expect an hour of the Beatles. In fact if you seed a new station with a song, it will specifically pop up and tell you why it’s not playing that song.

    Prior to that recognition, I couldn’t really assess what he had to say about the matter because he was on the wrong footing. Now we know that he knows what Pandora actually does and can evaluate his thoughts, right? Doing so, I’m conflicted about calling the current state of Internet Radio “a system designed to frustrate the listener’s ability to hear what they want.” I’ve listened to some really tremendous radio stations in my time, and sure, the best of them took requests. But the real joy of the good ones was hearing a solid set of tunes blending into each other, and getting exposed to things you didn’t know alongside stuff you knew you already liked. So, calling Internet Radio “a system designed to frustrate the listener’s ability to hear what they want” is to my mind effectively the same as calling ALL radio “a system designed to frustrate the listener’s ability to hear what they want.” So Pandora can’t play your requests (at least, not instantly). Neither can satellite radio! I don’t think anybody on the FM dial in my area does it either with the exception of a couple great college radio stations.

    Bottom line: Pandora’s business model is based on Internet RADIO. While the DMCA restrictions are inconvenient, they do not prevent Pandora from presenting a very high quality RADIO product. To me the interesting part of this conversation is the INEQUITY between the terrestrial, satellite and internet radio. They all deliver the same product, yet the satellite and internet delivery system are subject to different restrictions and taxes. I think that’s fundamentally unfair, and the music industry is ABSOLUTELY shooting themselves in the foot. I got introduced to a whole new genre of music (“post-rock”) by Pandora and have bought a bunch of music from bands (especially Saxon Shore and King Black Acid) that make that type of music, to name but one example of Pandora eliciting purchases and/or fandom in me. I think Steve (and everyone) SHOULD feel sympathy when the squeeze is tightened.

    But, I think Steve is right that it really comes down to a Cartel-like situation, and more than ANYTHING it comes down to the power of lobbying. I have to think more about the tip jar thing, but more than anything I’d just like to see some equitability across the delivery systems. I worked in radio for a couple of years, and one of the things that boggled me is that we only had to submit our exact playlists a couple of times a year. Meanwhile internet radio can tell you EXACTLY what played so that compensation can be paid for *every track*. If ANYTHING, *terrestrial* radio should be subject to more regulation, as internet radio shows what is possible.

  • Steve Gillmor


    No, Pandora is not based on Internet Radio, it is based on an algorithm designed to compensate for the cartel’s blockade of access to music on demand. Just because you have discovered new music this way doesn’t mean Pandora’s strategy is effective in any extended way. The artists you’ve discovered continue to be trapped in this vicious cycle, and your support is as much if not more for the cartel than the artists.

    You use my quote as being about Internet Radio when it is only about Pandora. The cartel’s restrictions certainly play a role in dumbing down and effectively destroying the new platform, but Pandora’s specific role is more of a methadone enabler than a breakthrough, and certainly not anything that will help break the cycle of control.

    I find it more interesting that no one addresses the tip jar proposal but prefer to sit around nursing the lame scraps the cartel is offering. If we can’t see our way clear to actually working toward a viable new model based on some economic clout, then perhaps we should start using these social media tools to pass good music along or at least a pointer to it in private behind email and other messaging firewalls.

  • Steven Long

    I might be alone in this, but the reason I didn’t address the tip jar is that I’ve read that paragraph a few times and have no clue what it means.

    My read:
    There would be some fund, some bank account, somewhere.
    There’d be paypal buttons on participating artist websites, and other places?
    People listening to terrestrial radio, or bit-torrent, have the option of putting money in the fund, because they want to support music/artists generally, not specifically?
    When there is enough money in the account (piggy bank, tip jar), it ‘disburses/breaks open’ showering participating artists with money.

    At this time the participating artists would give some of that money to record labels, radio stations and distribution channels?

    This really doesn’t make any sense at all to me.

    I want to support bands that I like, directly.

    How about this for a business model, as used by Roger Clyne & the Peacemakers (my favorite band):
    They don’t care about record sales or piracy.
    They are intentionally without a label.
    They make music, they produce it, there is a company that manufactures the discs/packaging/liner notes.
    They hope the listener shows up at their show (thus getting them some money).
    If you enjoy the concert you might buy merchandise, you might buy their CDs, you might drag a friend or two next time to a concert (thus getting them some money).

    They are promoted by word of mouth, opening for established acts, web presence and they can be heard on internet radio (as they don’t match the format of any normal radio station properly).

    I honestly just don’t understand the tip jar thing.
    Maybe it is articulated better elsewhere, where would you point me?

  • MusicOnTheInternetIsFubar

    With Joe Biden on the ticket for President, it doesn’t sound like the RIAA and the Labels have any reason to change their behavior. Sadly, I would expect to see another 4 (or 8) years of same. (see‘)

    We can only hope that music lovers and the Internet will smack Obama upside the head hard for this choice. Maybe if they deliver the message loud enough, Obama will be forced to explicitly repudiate the Biden stance on technology and take a public position on this stuff.

    But (again, sadly) I bet that we won’t see anything new on the Dem platform after the convention this week about Internet Music. They will continue to say that we, the youth and the Internet, are so important to them, but then turn around and screw us for money. (And of course, we can expect that the Republicans will be equally useless… Politicians don’t love music, they only love money.)

  • Steven Long

    I’m not so glum about Biden.
    The VP doesn’t always get to wield the current VP’s power.
    And Biden won’t be in a position to write legislation if he gets the VP gig.

    But I think we’re quite some time away from IP issues being big vote getters (or the variety of thing that a politician will give a speech about).

  • Christian Burns

    I was working on building some shelves outside on Monday night after the kids went to bed, and was naturally catching up on podcasts. It was a fun GillmorGang and then you and Doc started talking about a way to route around the current messed up system we have now. I felt like jumping up and shouting AMEN!

    About two years ago I spent a quite a bit of energy thinking about micropayments and how a gift / tip economy could allow artists that are good at what they do to “quit their day jobs” (sound familiar?)

    The start of it is this fund that you are talking about. I had not thought of it as a leveraging tool against the cartel, just a way to pass the wealth to independent artists.

    My thought was that the tip part of the transaction could be accompanied by a signal to friends that you are paying some money because you like a song, artist, album, podcast, website. The CCR song states, “You don’t need a penny just to hang around, but if you’ve got a nickle wont you lay your money down.”

    When a guy that is sitting on a street corner is playing great music that moves you, dropping a $1 in the hat feels good. The hard part with internet radio or bit torrent is that there is no hat, and if there was its hard to find.

    If a fund did exist, and allowed you to donate some cash, and the artist could get it when it got over $100 like an adsense check.

    By donating you are not admitting that you have “stolen the music” and now what to make it right, just that the artist moved you and you want to toss him some coin.

    Now combine that with a “subscription” style model where you can put $5 into the fund and then divvy it up as you see fit over the month or two. Then let me export the list of where my money went so that my friends can wonder why I would pay for this song or that album. The social part of this is where discovery can really take place. Connecting with others and finding music from all kids of affinity groups. Drill down on who is giving what to whom.

    Does that make any sense?

  • PXLated

    Maybe it’s just me but all the schemes, including a tip jar repository, seem to interject a middle man into the equation. I’d personally like to tip directly to the artist/band.

  • Steven Long

    @ 14 Christian

    That actually made a fair deal of sense to me, and I talked over that tip jar paragraph with a friend.

    Really, I don’t have much of an understanding how that would be a big step. Right now bands could do what TWiT does and have a donation thing on their site. I have a paypal donation link on my site (though I don’t make music nor do I have much of a readership or a following, so I don’t think I’ve made any from it).

    The only new thing would be making it social automatically. Making it a little piece of syndicated information.

    Really, after processing the idea with my friend this is what I came up with regarding the tip jar:
    Managers would get a negotiated share from bands they manage.
    Gillmor fumbles on labels, because I think though they might be around, there will be boutiques that specialize in various facets competing for the artists. Tour promoters, distribution experts and the like. Modular solutions vs holistic solutions.

    Band sites (participating) will have a link to support them, a link to support the ‘free music’ fund.
    Who knows who will click on the ‘support music fund’ but it’d likely happen, especially if they had pledge drives and the like.
    They could use a TWiT donation style scheme, but with far wider reach.
    Pandora (a new version) would have a link at the bottom to support music and maybe another for supporting Pandora.

    So then we have that tip jar and the artists get to pick where the money goes.
    I have no idea how they’d distribute it, but I guess they’d figure out a way.
    I don’t know how they’re voting rights would work.
    But again, I guess Gillmor is assuming that they’ll sort it out.

    To me it seems like too big of an assumption, I fear that it’d become a crazy shouting match.
    Rappers vs rockers.
    Would platinum artists take the lead?

    There would be bands that wouldn’t care much about the tip jar because their merch and ticket sales have been great and their personal tip jar has been doing fine. There would be bands that would go the other way, that need a chunk to produce their second album, rent is overdue, the drummer is considering going back to school to be doctor, etc etc.

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