Transcripts For CSPAN2 The Communicators 20090727

>> host: this week on "the communicators," more of our interviews from the recently-held digital media conference in northern virginia. we begin with a discussion of how one web site is taking a different approach to delivering news. neil buddety is president of daily me. mr. buddy, why another online news site? >> guest: well, daily me is really about developing media and technology together in tandem, and daily me.com is one way which we showcase that technology. we're also really about taking our technology that allows for understanding users and their interests and personalizing content and improving targeting of advertising and licensing it to a large number of news sites. we believe that most news sites will need to be personalized in the future to meet the needs of readers and that they need this kind of technology to improve the quality of what they do, strengthen their engagement with their readers online and develop really strong online digital businesses. >> host: so when you go to daily me.com, how can you personalize what you want to receive, and where do you receive it from? >> guest: sure. well, to some extent daily me.com is in transition right now. we're about to launch a new version. if you went today, the ways in which you would personalize are classic forms of personalization. you go into a process where you pick the categories, the topics, the people, you can use key words, different sources. and that develops a profile of what you say you're interested in. you can receive that in a variety of ways. we will e-mail it to you, we can send it in the e-mail a pdf attachment, and you can print that out. we even have automating printing software that you can set up so every morning when you get up, there's a personalized newsletter sitting there waiting for you. one of the things that does is give people great control and power of what they're getting. the problem is it takes a fair amount of investment in what does it take to personalize the content. so the transition we're making is moving the site in a direction where more and more of the personalization can be done without the user having to take a lot of action. we will be, we are tracking everything a user reads on our site, and we understand at very fine-grain levels what the content, the stories they're reading are about. what people are mentioned, what companies, what organizations, what business topics, if they're about medical conditions, different kinds of industry terms, we have a deep knowledge of the stories that each user reads, and we create for each user a picture of what they're interested in. we're calling it their digital news affinity or dna. with that picture we can then personalize daily me.com to reflect the categories and subject matter they're most interested in: we're not trying to get rid of editors, we're trying to blend editorial news with things of interest to you. i think one of the problems online is you're trying to drive your news through a smaller and smaller window. you know, now it's down to the size of an iphone, and when you get to a small window like that to try to find the news that interests you, it has to be closer and closer to your interests. you still want to know the big stories, when there's a train crash locally or when there's a major disaster in the world, you still want that kind of news, but also you want things that interest you. one person may be sported oriented, somebody else entertainment. so to take a lot of that space and put stuff i'm not interested in is very much a waste. >> host: so how different from let's say yahoo! or the drudge report or other daily beast? >> guest: most of those are one view for everybody. it's, you know, here's what the editors who are controlling that page provide to you. so the editors of the daily beast or huffington post or "the new york times" are making decisions about what is on the front page. and they're controlling that. and when i come to that site if i agree with or i'm interest inside the things they think, you know, the world's interested in, it's great. but if i go to a site and the topics that they've closen to feature at the front -- chosen to feature at the front are not interesting to me, i'm never going to find them perhaps. so our technology is really about bringing out from the wealth of information that's out there in news sites the pieces of information that might be of more interest to any given user and bringing that to a point where it's more visible to that user than if it's buried deep in the site. >> host: what is your background in news? >> guest: sure. i hate to say i've been doing this for 30 years in some form. i actually started working for a newspaper when i was 16 years old, a good old weekly that still had line types and hot metal. most people may not even know what i'm talking about. but i started just after my 16th birthday. the editor, i went to work and he said, can you drive? i said, sure, and he threw me the keys to my car and said go out and get the results of the golf tournament. he forgot to ask me if i had a license. yes, i could drive, but i didn't have a license. i still got the results. i worked for newspapers after college. i really got into danger digital about, i guess it would be 15-17 years ago when i went to work for dow jones in their electronic publishing area. and about six years into that we started formlating ideas of what could "the wall street journal" look like in an online environment? i built some prototypes, people got excited, so beginning in 1993, end of '93 i was part of a team that built "the wall street journal" online, and we built that, i ran that up until the end of 2002. i spent, after that i spent about three years running yahoo news. and then i met eduardo hauser who started daily me a couple years ago at a conference, and we started talking, and he persuaded me to come and join daily me to see if we could build it into a great technology business. >> host: who's eduardo hauser? >> guest: eduardo is a venezuelan-american who most recently ran aol latin america. he's actually a lawyer by background, but he tries to hide that fact. very passionate news junkie who really felt like there was a need online to find a way to sort out the mix of all the great news that's out there the things that would be of interest to a user, and that's why he started daily me. >> host: wall"wall street journ" is still one of the few pay sites. is daily me going to be a pay site? >> guest: it's a news category business primarily investing information that lends itself much more to a subscription. people need it for their business, for making investment decisions. but more than that when we were building "the wall street journal" online, we started with the assumption that we wanted to charge for it. i think a lot of people believe we built it and said let's charge for it. we started up front siing we think we want to build a subscription service. and everything we did along the way was supportive of that. we said, what was it going to take to build a product, a collection of information online that people will pay for. so we built into it lots of capabilities, we included everything from "the wall street journal," most of the realtime dow jones news wires, significant amount of archival content all of which were in other environments being charged for. you know, the value if you added all those things up that we put into the weal journal -- "wall street journal" was probably 4 or $500 a year in value, and our initial price was $49 a year. we recognized it was going to be difficult to get people to pay. we had to create something of value with a lot of features of functionality to get them started. i think they're now up to charging 100, but it's still a very valuable product that has a lot of utility to people. >> host: robert thompson, the current editor of the wall street journal, has described the yahoo!s and people who take other people's content, associated press has had some problems with that also. is daily me an aggregator? >> guest: one of the things we did from the beginning was license a lot of content. we're also licensing from another source about 500 newspapers' content. we did that for a couple reasons. one is that we think we can create a better news experience online if it's all there, and you're not jumping off -- you know, most of these ago regators you go to one page, and you jump to something that looks totally different. it's a very disjointed experience. we wanted daily me consistent and easy to use. by licensing the content, incorporating it into the site, it's a much better experience. it also allows us to do the print newsletter that we can give output format that is others can't because they don't have the rights to the content beyond a headline or maybe a snippet of the text. we can create other formats. we have a couple of products that we offer through kindle, one is about the publishing entry. industry. it's very popular on the kindle because we tailored it, and it's a mix of news stories from a variety of different sources rather than from a single source. and if you're really interested in books, it's a great way to keep up with the industry. >> host: how is daily me going to support itself? >> guest: sure. well, daily me.com is still going to be advertising-supported. but the bulk of our business really is about taking our technology, making it available to other news sites, other publications on the internet. our model there is that some of our services will be available for free, they can incorporate them into their site and get certain amount of information and functionality. to be able to use our technology to start to personalize their site, there would start to be fees associate with the that, but we think the fees are very much in line with the kind of value they'll recognize in terms of deeper user engagement, users viewing more pages, users coming back. a personalized news site is much more of a place people want to make their home for news. if one of these news sites adds our capabilities to it, we think they'll see a return for the modest amount of money they'll have to pay us for the technology that's behind it. >> host: currently it's daily me beta. when will the news site be online? >> guest: the redesign that we're working on now that will incorporate much more of the personalization capabilities is targeted for sometime around the middle of july. we're not -- >> host: 2009. >> guest: yes. we're only -- it's very close to being ready, but we've got to iron out a number of bugs, and we should have it out somewhere in the next couple of weeks. >> host: neil budde, daily me.com. thank you. many of the panels at this tech conference dealt with current technology in the marketplace, but we also had the chance to talk about some future technologies and their funding sources. here at the northern virginia digital media conference is janet yang who is a principle partner with novak biddle. what is novak biddle? >> guest: we're a venture capital firm, and we're based outside of bethesda, maryland. we're about 12 years old, and we have about $600 million under management, and our focus is purely i.t. meaning we don't do biotech or health care. so we have seven partners on the investment side, and all we do is do i.t. investments. and by i.t., it incorporates anything from digital media, for example, which is why we're here all the way to mobile and telecommunications, semiconductor materials, software and the whole gamut. >> host: is it fair to say that most i.t. venture capitalists are based out in california? is it rare to find one here in the washington area? >> guest: well, obviously, the mecca is silicon valley, but we are seeing pockets of growth elsewhere in the country, you know, boston is a fairly big market. and this region is actually quite, quite in terms of a talent and the ideas are quite prolific primarily because we have a lot of government labs, so there are a lot of talents in the research and labs here. plus there is a lot of great universities here like the university of maryland school of engineering and virginia tech, you know. so we do get to see quite a lot of young entrepreneurs. >> host: so what do you look for when you may be recommending an investment in i.t.? >> guest: well, right now particularly, i mean, obviously, at all time we're looking for great ideas, fantastic risk takers in a large and high-great and emerging markets. those are a given. but particularly in this time we look for entrepreneurs who really truly understand how to efficiently use capital, how to maximize capital in the most efficient way whether it be in business models or the way they go marketing either through partnerships or channeling because they have contacts or the technology is just very good at scaling without too much effort into marketing and sales and marketing. that's probably the sort of the differentiation. >> host: two products i want to ask you about. if you had invested or wish you had or think they would have been a good investment, the flip camera and twitter. [laughter] >> guest: well, the jury's still out on twitter in terms of a business model. i know they are incredibly popular from a user perfective -- perspective. we still haven't figured out how they're making money. but i said if i had to pick one, i would probably have picked the flip camera. [laughter] >> host: do people come to you and say, here, i have this product and i need your money? >> guest: we actually do both in terms of sourcing deals where we proactively go to universities and research labs. approximately 40 percent of our portfolio companies are spinouts of research labs either from universities or government research labs because there's the army research lab, the naval research lab, so there are a lot of technologies we proactively seek, and there is a big part because we have built a reputation that people will come to us to seek financing. our typical investment stages, i mean, we do all stages of investment from very, very early stage which is where there are just two guys in a garage with a power point or two gals in a garage with a power point and a great idea all the way to growth capital. so meaning our typical check size is as small as half a million dollars all the way to about 10-15 million dollars for growth and expansion. >> host: internationally is that where the growth in i.t. is now, or do you focus here in the states? >> guest: our fund's mandate is primarily in the united states and particularly on the east coast. however, we have an investment in israel, we have an investment in india, so opportunistically when there are great opportunities particularly where technologies that is transferable that can be applicable to outside of this, this country and particularly in the mobile arena, in fact, for example, where outside of the united states the market is even bigger. that's where we, perhaps, spend a lot more time outside of the border. >> host: you've spent a lot of your career in investment in i.t., working on investment in i.t. and, in fact, lived in china for several years working on investment, is that correct, and how does the chinese market compare to the u.s. market? >> guest: oh, who. [laughter] that is -- wow. that is a conversation that could probably take hours. yes, i have spent quite a bit of time here in the united states. in fact, i was the cfo of global internet services for pccw which is one of the largest telecommunication companies in asia where i did a lot of joint ventures for them in china. you know, i think, i think the entrepreneurial spirit in china is starting to evolve. you know, one would say probably one to two decades ago it's primarily still in the manufacturing and low tech, perhaps more hardware than software, but i see that trend starting to, starting to shift where quite a bit more are now into software, more of the high-tech investments. there is always a little bit of a competition between india and china in that regards where india's known for the software technologies and china more the hardware, but i think that is starting to shift in china. in my opinion, particularly in the last five years where one of the driving forces is also because a lot of u.s. venture capitalists are moving to china and to asia to invest. so we're seeing the likes of u.s. venture capitalists investing in, you know, obviously the google of china, there is also the myspace of china, the facebooks of china, so there are a lot of similarities in what is hot here, what is hot in china will be. will be following suit in a similar type of technology. >> host: and finally, janet yang, could you speak about the mobile investments that you're looking at now down the future? >> guest: well, mobile, one of the most exciting area in mobile in my opinion is actually in the aps, in the applications. and, you know, here we actually have a company in our portfolio company called sgn, stands for social gaming network which is one of the top iphone aps, companies, developing company. and they're based out in silicon valley. it's actually a spinout of a local tech company and moved to the west coast. what is really interesting is we're starting to see mobile advertising in local marketing and consumer have, their spending habits of their time and money is really shifting into data. and the massive proliferation growth in aps really shows and proves to us that the consumer is really hungry for more and more data consumption just wrapped up in a new package called aps. so i think that is a incredibly exciting area that we are very, very excited about. >> host: is it all about the iphone? >> guest: no, actually i don't think so. i mean, iphone is, obviously, where there are a lot of buzz is going. but we think, i mean, that is still a relatively small market. i mean, certainly a fast-growing market, but i think the jury's still out as to who, who's going to sort of, you know, take over that. >> host: janet yang is a principal with novak biddle venture partners. political campaigns have gone high-tech, and at the conference there was someone there responsible for the obama campaign's text messaging platform. kevin bert ram is the founder of distributive networks. what does your company to? >> guest: we're a mobile marketing and technology company. we help brands and political clients and governmental organizations manage text messaging and communication with users via cell phone. >> host: so as a user of a cell phone, how would i ever see your product? >> guest: probably the best and known example is the text messaging done during the presidential campaign. barack obama used it to teach keep in touch with millions of people to let them know if he was going to be in town, definitely to get out the vote, encourage them to volunteer and, you know, all kinds of communication like that. you might have remembered when they were waiting for the vice presidential announcement, everybody had their cell phones out waiting because we sent the announcement via text message about joe biden being the vice president. >> host: so you knew 10 minutes before everybody else? >> guest: maybe even 15, but i couldn't tell anybody. so -- >> host: and so how do you get the names? how do you aggregate all those names? >> guest: sure. well, the nice thing about text messaging is it has to be opt-in unlike e-mail where people are selling lists. that's prohibited in text messaging, which is great so you're not receiving all these messages you don't want, and because it's tightly policed by the cell phone carriers, it's been very effective. so what you need to do is engage people. if you're a presidential candidate, you say, please, text me and then we start a dialogue. or if you're a marketer, a brand, you'd say, you know, enter our sweepstakes to win and then follow up if you want to continue to receive messages. it's all about permission-based marketing that, you know, makes it so much more effective than e-mail or, frankly, any other communication. >> host: is the technology that you use advanced, or is it low-tech? >> guest: i would say it's dirt simple, actually. we receive messages and we send messages. now, there is a little bit of special sauce in there about making sure things are handled properly and developing a customer relationship basically, but, yeah, it's actually pretty simple technology i would say. >> host: and when it comes to using this as a marketing tool, how does it, how does it compare to buying an ad on network tv say? >> guest: well, i think the best way to think of it is not to think of it as standing on an island as it own, but as part of a media campaign. you might put that on a radio ad or print materials. if you're, let's say you're the washington capitals, and people are at your game and texting in there, it's a supportive call to action that helps all of these other media. and so it's not really, it's not a comparison of which is more effective, it's how can they work together to achieve better results? >> host: how much of a growth industry is this? >> guest: well, despite the economy, we've been growing quite steadily, so i'm pretty sure that's indicative of the, that it's definitely a growth industry. make me all embarrassed. >> host: and the global market is a growth industry, correct? >> guest: yes, absolutely. >> host: how so? >> guest: because there's more people using their cell phones, there's more people with cell phones, more interesting ways for people to use them. i think one of the exciting things to see is that, you know, people can receive text messaging just to be 14-year-old girls text messaging their friends, and that's just not true. you're seeing a wider segment of people using their phones. one of the best drivers is people with kids, especially in college. they won't answer an e-mail or, if phone call, but they will send a text message back. so you have people in their 50s sending text messages to their kids, and then they might send a message to their spouse, then they might vote for their player of a game or get stock quotes in their phone. they realize there's value and they start using it. not to say they're using it as aggressively as that 14-year-old girl, but it's widening out. >> host: you talk about permission. what about the privacy concerns with this technology and with this distribution system? >> guest: well, that's like i said the fantastic thing about this. if you text into a program, then obviously your phone number is on that, and then the organization has to say do you want to continue receiving messages from us? it's a completely permission-based. if at any time you want to stop, you can reply stop to the message, and they have to cease all communication with you. you don't have access to any of the, like, the billing data or your home address or any of the information that your cell phone carrier has. that's not shared with marketers which i think is a good thing. you definitely don't want that to happen. so it's only the information that you want to share is shared with an organization. and so i see almost no privacy concerns. >> host: is this a regulated industry at all? >> guest: it is. obviously, any new industry, you know, regulators struggle to keep up. obviously, the fcc oversees the cell phone carriers who then oversee kind of the smaller groups, parts of the value chain, the marketers, the technology companies like ourselves. and then there's a strong trade association, the mobile marketing association, that, you know, it's not a governmental regulation, but, you know, self-regulation by the industry. and between, you know, the fcc looking over the carriers and then this self-regulation, between those two it's regulated. >> host: how would you compare your industry to, say, twitter? >> guest: well, so it's interesting. twitter sr. great, but twitter has nothing to do with mobile. like, if you ask anybody how many people actually get twitter messages to their phone, it's almost known because it's high volume, and you get overloaded. it's a great blogging tool, but it doesn't allow the kind of back and forth communication that text messaging allows. it's one to many. it's a broadcast to everybody on your twitter whereas with text messaging you can be more selective, let's say you only want to send messages to people who live in virginia. i live in virginia, and i like ice cream. whatever criteria you've developed. so i see text messaging as more of a scalpel whereas twitter is just a loud broadcast which is effective and fun but not mobile. and people aren't getting twitter when they're at an event, it's harder to interact. you have to have your laptop with you which if you're at a sporting event, you probably don't have your laptop there. >> host: can you send video, or is that a growth industry part of your industry? >> guest: you can send video. the hand seths in the united states are a little bit behind where they are in other parts of the world so, you know, it depends on your phone, and it depends -- you know, the networks get clogged. that's one of those things that it's next year and it's been next year for a couple of years. we'll see when it takes off. >> host: are other political campaigns picking up on this? >> guest: i can't disclose our client list, but i know both governor's races in new jersey and virginia in 2009, both sides have mobile in their campaigns. the new york mayoral race in 2009 is using mobile and then the 2010 races everybody who wants to win is using mobile. >> host: distributive networks, kevin bertram, founder. most are familiar with fox broadcasting's tv business, but we had the chance to hear from the person responsible for bringing its programming to the web. bill bradford is senior vice president of fox

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