Rupert Murdock is trying to trade Yahoo MySpace for a 25% stake in the combined company. If Yahoo goes through with that, Rupert's $580 million MySpace investment will be worth about $10 billion. But should Yahoo do it?
Everyone Wants Dow Jones
- Rupert is also trying to buy Dow Jones for $5 billion.
- And so is a MySpace founder.
- And so is Pearson (owners of the Financial Times).
- Ron Burkle is also making a WSJ offer, potentially with Yahoo in on the deal.
Why Everyone Wants Dow Jones
The reporting at the WSJ may be better than other places, but even more importantly are the relationships that are in place and the perception that it is better. As many of the newspapers see their margins erode the top few will have more leverage over the market, because the smaller players will be forced to rely more on community created news (mostly noise or something Google could easily replicate) or syndicating news from companies like Dow Jones.
As content quality and relevancy algorithms improve and Google (or similar outfits) control more of the traffic supply the noise content will become less and less accessible (because traffic sources will rank the higher quality stuff to sell ads against and clone the low level stuff to keep hold of that traffic stream). The MySpace experience is not hard to clone.
Yahoo Does Not Need MySpace
Yahoo could grab MySpace and get a bunch of low value inventory in a spam filled network on the decline, or they could get the #1 financial newspaper for less. Yahoo already has a lot of traffic. They don't need another layer of noise. If they could innovate in the social space they ought to be able to do it with their current assets and traffic stream. As the web gets better at filtering signal vs noise, quality will beat out quantity nearly every time.
The Solidification of Markets
As offline players wake up to the online world the following is happening
- search will get more relevant and become harder to manipulate (unless you already have significant offline influence or other assets you can leverage)
- markets will get more efficient
- all online verticals will get more competitive
- markets will consolidate
How Does This Crap Relate to Me?
As markets evolve the threshold between signal and noise changes. Is your site the type of site that would be easy for Google to clone? Is your content the type of contet Google created the supplemental index for?
Look how bad some of the top ranked content is that still ranks because it is old and was considered high quality content years ago. Imagine how much harder it will be to crack into markets a couple years from now, when people are working so much harder to make higher quality citation worthy content today in so many formats.
The later you start the harder it gets. An hour of focused energy building citation worthy and brand building content today is worth 2 hours next year and 4 hours a year after that.
The effort spent building two parallel sites targeting the same keywords would be better spent creating one stronger brand. Markets are self reinforcing and exposure leads to more exposure.
To stay competitive independent webmasters will increasingly need to chose fewer high quality projects over a large quantity of cheaper lower quality information. Top trusted editorial channels have far more value than bottom feeding networks.
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