RSS Monetisation

Jeff Jarvis writes:

Since RSS will be read by multiple clients on multiple devices (see the next two posts), we need to set business standards — or at least establish business needs — now so that as it proliferates it prospers. But I do not see any means of getting those business needs into standards-setting discussion now. Here are my opening bids for business needs:

1. Unique users. If content creators cannot report unique users they cannot get advertising. Period. So RSS readers must set unique-user cookies. Period.

2. Traffic. RSS readers must allow content creators to count displays — versus just downloads — of RSS items.

3. Advertising. If content creators cannot put advertising on feeds, they will not give full content and will give only headlines to link back to their sites where they have the ads. But partial feeds are a pain, right? So there’s the carrot/stick: Give them ads, they will give you content. That’s the way the world works.

4. Brand. I’m adding this one. As a reader, I find it frustrating that I can’t see the brand of a feed unless I scroll up on FeedDemon and read the one line atop the the screen. Brand matters to the content creator, of course, but it also can matter to the reader: You want to know what you’re reading.

5. Navigation. I’m adding this one, too. But I know I’m not alone here: Like many RSS fans, I use the feeds to alert me that something is new and if it is of the slightest interest, I prefer to read the post on the web page with full functionality. It’s a pain to get to that web page now. The easy solution to Nos. 4 & 5 is to include a brand element that is also clickable to the creator’s web page.

Robin Good has a counterpoint.

Brad Feld has an excellent post summarising why his VC firm invested in NewsGator:

The misperception is that NewsGator is only an Outlook plug-in. While the most popular product from NewsGator is currently their Outlook-based aggregator, what really turned us on when we dug into NewsGator as a potential investment is NewsGator Online Services (NGOS). Greg Reinacker’s vision is much broader than simply an RSS aggregator – his goal is to provide RSS content on any device. NewsGator currently provides clients for Outlook, the Web, POP email, mobile devices (web-based and wap), and Microsoft Media Center (how cool is it to get an RSS feed on your TV?).

Following are several examples of how NGOS can be used today:

– I use a Tmoblie Sidekick – made by Danger – as my cell phone and wireless data device (web browser, email, AOL IM, wap browser, calendar). Using NGOS Mobile Edition, I can read my feeds via my web or wap browser on my Sidekick. These subscriptions are synchronized with my desktop, so I don’t have to do any set up on my Sidekick – I simply access my mobile edition account.

– NGOS has a custom search feed capability. I put in all of my companies as keywords (one per feed) and then get feeds for each company. This is similar to Yahoo! Alerts and Google Alerts, but also searches all of blogworld so I get any postings in these feeds also.

– A NewsGator / Gmail interface exists. Using this, you can route all of your feeds into your Gmail account and take advantage of Google’s search technology on your personal feed database.

Let me move on to why we invested in NewsGator. When I started really digging into RSS and blog technology, I began by actively playing with and trying as many different products and services as I could find. I had three goals: (1) figure out which were the most interesting products available today, (2) determine what the segments of the RSS / blog universe were, and (3) determine the “analog analogs” from the evolution of other segments (publishing, email, web, and ecommerce).

The first was fun for me as its appeal to my inner-nerd was very tactile. In many of the market segments that I invest in (such as IT infrastructure software products – companies like Cyanea, Newmerix, Oxlo, Rally Software and Xaffire) I can’t actually use the software in a sustained way. Sure – I can look at demos – but I’m not the target customer or user – so any real use case is contrived. In the RSS / blog universe I could set up a blog, read blogs, use RSS syndication, explore the tools, look at and think about my stats, and play with new search and advertising technologies as they appeared. Once I got into this, I ran across a number of interesting new companies.

Once I became “a user” (meaning I was no longer in demo mode, but I was actually using this stuff every day), I starting figuring out which segments each company fit in and correspondingly began to rank the companies in terms of my perception of their future potential. The segments I came up with in hindsight are not that surprising, so I’m happy to share them here (and take constructive feedback from anyone that’s bothered to read this far). The segments I identified are content management systems (CMS), readers (aggregators), tools, hosting, content, search, analytics, and advertising. There is obviously overlap between these segments (e.g. a company could be in more than one segment – search and advertising are a natural pairing, as are readers, tools, and analytics).

I decided that rather than try to find one “ultimate investment” in RSS that spanned all the segments (I don’t think this will exist), I wanted to make investments in several segments. I’ve been working closely on this with Ryan McIntyre who was previously a founder of Excite and knows many of these segments well from his experience there (and – hence – another view on the analog analog). We identified several companies in different segments that excited us and have been systematically exploring working with / investing in them. In several cases these companies overlap in various segments, but when in the same segment (e.g. search), they are complementary to each other rather than competitive.

NewsGator was at the top of my list for readers and tools and NGOS complimented search and analytics. Per the misperception discussed above, NewsGator is currently thought of as only a reader – and an Outlook-based one at that. In fact – today – NewsGator (through the Outlook client as well as NGOS) has capabilities that cross all four segments. Clearly the emphasis is readers and tools – but if you dig into NGOS – you can see how NewsGator could be very complimentary to other companies that have their emphasis on search and analytics.

I was introduced to Greg by Karl Florida at Return Path who had been talking to him about RSS and how it fit within Return Path’s world. Greg and I got together and I immediately liked him. He passed the “15 minute test” (in 15 minutes I believe you can make a directional decision on whether or not you want to pursue working with someone you have met for the first time). Over the next month, we met several times for increasingly long periods, talking about NewsGator, RSS / blogs in general, and his vision for what he wanted to create as an entrepreneur. This corresponded with an increase in my use of blog / RSS technology – I began actively using NewsGator and NGOS as my only aggregator technology (dumping all the other ones I had been playing around with), set up a Typepad blog (which I transitioned to Movable Type after about a month), and incorporated the reading and writing of blogs into my work habits.

In mid-May, I’d reached the point where I had a clear view that I wanted to pursue an investment in NewsGator. Greg and I started discussing this seriously and I started working through my deal approval process within my partnership. By the end of May we had a deal and officially became partners last week..

We hope NewsGator is the first of several investments we make in the RSS / blog world. I encourage you to give me feedback on NewsGator, your view of the way the market segments break down, and – if you are involved in what you think is in an interesting company in this universe, my door (ok – my “email box”) is always open.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.