I subscribe to TechCrunch, a blog that provides a wealth of good, current information about Silicon Valley and technology in general. Michael Arrington is the founder, and I find the blog especially helpful and interesting when he does analytics around issues like the economic value of Facebook, or shares his competitive thinking around search engine and operating system wars.
TechCrunch also tracks the latest gadgets, a nice bonus.
Unfortunately, a subscription to TechCrunch also involves sifting through a fair bit of dreck, like the recent post by Arrington entitled “I Am Stunningly Uninterested In Diller And Malone’s Opinion Of Twitter.”
In this instance, “Malone” is John Malone, the chairman of Liberty Media; just read the first paragraph here and you’ll get a good idea for how remarkable this guy is. Diller, of course, is the famous Barry Diller (see here). Between the two of them, they have made money with nearly every business model conceivable, profited on a half dozen so-called technology revolutions, and remain two of the smartest guys in the world when it comes to combining money, people and technology into profitable entertainment and information businesses.
Arrington writes
Diller and Malone both preside over huge companies with a variety of assets. Some of those assets, like Ask.com and Expedia, would even be considered new media or Internet startups. But just like the truly old media guys, Diller and Malone are already dinosaurs in a fast changing world. They have no clue what Twitter is even about. So why in the world would we care what they think about its business model?
To support his argument, Arrington says that his father didn’t understand the music he listened to as a boy, either.
It’s hard to know even where to start responding to something this silly. In fact, that’s the very point: There are 119 comments to this post (and no doubt more by now) and a kind of firestorm, with Mr. Arrington probably sitting back in his chair having a good laugh and stirring the pot now and then just to keep the comments flowing.
The conclusion to be drawn is not about John Malone or Twitter, but about TechCrunch, which has essentially evolved into Talk-Radio, Twenty-First Century style.
Talk-Radio has long known that it's nice to have smart, informed callers, but better to have outrageous callers who light up the phone lines. Similarly on TechCrunch, it’s important to have thoughtful articles to post, but much, much more important to have articles that inspire passionate comments, generating eyeballs and clicks.
Because the real business model isn’t about delivering smart technology commentary to readers, it’s about delivering smart readers to advertisers.
When you understand that simple concept, it all makes sense.
Repeat after me: The real business model of Facebook is not about delivering cool social networking to Gens X& Y but about delivering their associated wallets to the Gap, Apple and Coke.
Again: The real business model of Twitter isn’t to create a hip new messaging system for scheduling after-dinner drinks or Mideast revolutions, but to plant the Twitter user firmly in the store or on the website of some Fortune 500 retailer.
When Peter Drucker said the point of business is to create a customer, I'm afraid he wasn’t thinking about you, the social networker. It turns out you are some form of raw materials, work-in-process and finished goods being sorted and packaged to attract the real customer.
Twitter is free! Facebook is free! YouTube is free! (Right, Chris Anderson?) For that matter, in 1929, Amos and Andy was free! All you had to do was turn on the radio.
These services are all free like chum is free to a big, dumb fish about to be hooked and gaffed.
This is a business model that is irresistable, venerable, and exceptionally easy to understand, whether it’s CBS Radio in 1929 or Twitter in 2009 (assuming, of course, that Twitter can make it work--at least they know how to chum). It's also a business model with loads of pitfalls but stunningly good upside.
That’s the reason, if nothing else, that you really do want to pay attention to what guys like Malone and Diller think. Because they can see past the shiny new toy, the latest revolution.
And why you can expect a steady assortment of incendiary blog posts on places like TechCrunch. It’s how we all get sorted and packaged before we are sold. It's hard to know if Michael Arrington really believed what he wrote about Malone and Diller, but it's' not hard to see how he made money doing it. That post was just good business. David Sarnoff and Bill Paley would have been proud.
Oh, and responding to these kinds of crazy posts just encourages more bad behavior on the part of bloggers like TechCrunch.
Come to think of it, writing blog posts in response does, too.
Wait; I’ve been had. . .
Nuts.
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