Inside the Quiet Content Site Crash of 2010

Judy Shapiro

Amid the noise and clacking of financial market meltdowns or oil wells spewing countless barrels into the ocean, it's no wonder why one may not have noticed the quiet crash taking place right now -- the Content Site Crash of 2010. To be more specific, this is a crash taking place among heavily financed, high-traffic, design-rich content sites that have sophisticated UI and content-consumption functionality.

These sites embraced the "one:many" Web 2.0 model so as to stimulate traffic growth upon which ad revenue depended. The content sites' success stories -- few though there were -- attracted a large number of new entrants into the space all fighting to gather as many eyeballs as possible. In what turned out to be a vicious cycle of one-upmanship, many content-rich sites poured more money into better design and more sophisticated content-consumption technologies.

But the results were painfully disappointing. These heavily financed sites were caught in the sudden and utterly seismic forces that are quickly rendering the "one:many" Web 2.0 content site nearly obsolete as the world migrates with dizzying speed toward the social rich, interactive "many:many" next gen internet web experience that is a seamless mashup of community, connectivity, commerce, content, real-time interactivity and portability. In this "many:many" world, an "interaction engine" curates the user experience -- not the content itself. In this brave new world, we see real world successes, like Paltalk and Zivity, who skillfully merge user experience with a monetization plan based on how people interact with the content. Sadly, while many of today's Web 2.0 content sites are trying to "retrofit" their sites with these "many:many" technologies, it's not hard to spot the clumsy bolting on of these technologies as the "afterthought" they really are.

This is why I characterize this shakeout as a crash. Aside from reality that too many sites are chasing too few ad dollars, the desperation of the situation hit home very recently when a large, very well-known site approached me to be a potential purchaser; partner; "whatever," said the bizdev guy on the other end of the phone. I asked plainly, "Why would a site with millions of U.S.-based visitors be selling -- surely you can monetize that much traffic?" I asked, but I think I already knew the answer -- they had gotten a ton of funding to create a great content site, but could not get enough ad dollars to make a go of it. For these sites, the road to monetization seems always within reach but tantalizing further and further away.

That's why I call this a quiet crash. The gap between inventory and available ad dollars was wider than I thought. The speed of migration from the one:many model to the many:many model was faster than I thought. The math is painfully simple. So while I hear the content site bubble bursting, I suspect few people will barely hear a crack -- that is, until, people start cutting themselves on the shards of the bubble all around them on the floor.

ABOUT THE AUTHOR

Judy Shapiro is chief brand strategist at CloudLinux and has held senior marketing positions at Paltalk, Comodo, Computer Associates, Lucent Technologies, AT&T and Bell Labs. Her blog, Trench Wars, provides insights on how to create business value on the internet.