Is Content the Problem or the Solution?

      “Content doesn’t work” means, in this context, that other businesses work better. It means you’re a goddamn palooka if you’re actually paying to create content when advertisers are just as happy with businesses fueled by cost-free user interactions. And yet, ultimately, everybody does embrace content.

      Or, that is, mature technology businesses (Yahoo, AOL, Microsoft, and now Google) almost invariably come to content.

      This is partly because with an installed base it is very hard to offer ever-transformative new technology or to profoundly change your stripes and worldview. Google is not going to be Facebook. Likewise, Microsoft was not going to be Google. And it is partly because, contrary to the shibboleths of user-created blah-blah, people love content—and, mirabile dictu, it increases traffic. The problem is, advertisers don’t love it. Or they don’t love it enough. Or there is so much of it, they can be fickle lovers of it—hence the cost goes down (and down). This math has actually created an entire genre of online businesses that are all about being able to keep lowering the cost of content to keep up with the ever-lower price that can be charged for it.

      And yet, there is content that works—that remains unique and that commands premium pricing. That’s television—or video.

      Put another way, what still works, what advertisers and audiences still seek, is superexpensive content.

      And there is a model in which mature non-content-producing businesses help themselves by becoming sophisticated content producers: the premium channel business, the HBO model. HBO was not a content creator; it was effectively just an aggregator and a redistributor. But faced with higher licensing fees and lower margins, and looking to solidify its own brand, it started to produce its own content.

      That’s essentially the same position that Yahoo long ago found itself in, and that even Google is looking at now.

      Just like HBO, Yahoo, faced with competition from Google, started to deliver its own branded content. Unlike HBO, Yahoo’s content wasn’t very good. Better than nothing, perhaps, but never good enough to redefine itself. This is because the price of good content is a scary mountain and also because nobody at Yahoo has ever been a content person—a showman, as it were. Likewise, Google, with a lot of money to spend, has just bet a piece of it on Zagat—its first foray into name content. I’m not sure that a showman would have made Zagat his first purchase, and I can hardly imagine who at Google is temperamentally ready to build a hit-making business.

      Similarly, at Google’s YouTube, there is the much-discussed HBO-like initiative to invest in unique must-see content. But is there the showmanship and the temperament to go for broke at what is, in essence, a server-farm company?

      The answer sort of seems obvious: Technology people aren’t content people. Never have been. And it’s the Internet’s flaw.

      But then there is Glenn Beck, the ultimate showman—and the looming specter of his new Internet-delivered show.             

      Google should have bought him instead of Zagat.

      Or, hell, let him save Yahoo.