Category: Web/Tech

Online commentary journal Slate Magazine – which was put up for sale two weeks ago by Microsoft – could fetch $10 millon to $12 million, or twice its $6 million annual revenue, say analysts.

Whereas magazines generally sell for an amount equal to or just above their annual revenue, the “prestige value” of Slate will probably warrant a significantly higher price tag, said investment banker Jeff Dearth.

“It might go for much higher,” said Mr. Dearth, a Washington-based partner of DeSilva & Phillips, a New York investment-banking boutique specializing in publishing industry transactions. “There is an intangible ego value to owning Slate.There is a lot of cachet to owning a ‘thought leader’ publication in intellectual or political circles.”

The business model is based around ad revenue, given the high spending value of Slate’s readers:

Slate’s demographics, according to Neilsen/Netratings, include an audience that is overwhelmingly male – 63.4% to 36.6% – and older, with more than 38% of its audience between 35 and 49 and 44.6% over 45. The company said 29% of Slate’s audience reports earning more than $100,000 annually, with 45.3% reporting incomes between $50,000 and $100,000.

Here is the full story.

Blogging from Mexico is made easier by the large number of cybercafes here. Even a town of 50,000 might have a dozen or more places with decent connections. Population density is high, most people are literate, few have access at home, and the demographics favor the young. The main problem is that not all the keyboards have the appropriate slashes for html links. I thank Alex for filling in the gaps in my posts.

On the issue of Internet access, I was struck by this story from rural India:

For 12-year-old Anju Sharma, hope for a better life arrives in her poor farming village three days a week on a bicycle rickshaw that carries a computer with a high-speed, wireless Internet connection.

Designed like temple carriages that bear Hindu deities during festivals, the brightly painted pedal-cart rolls into her village in India’s most populous state, accompanied by a computer instructor who gives classes to young and old, students and teachers alike.

Can you think of a better way to bridge the digital divide?

With only 12 computers and four Internet connections per 1,000 people, India has one of the world’s lowest Internet usage rates and much of rural India remains oblivious to the sweep of technology. But the villages involved in Infothela all lie within a 50-mile wireless corridor created by the Institute of Technology and linked by high-rise Wi-Fi antennae and amplifiers along the highway.

Until recently, such technology was the privilege of a tiny section of Indians – engineers in the country’s software hubs who earn more money while in their twenties than Bithoor farmers do in a lifetime.

Here is the full story. Here is another version.

Here is a company that uses rickshaws to take cell phones to India´s poor.

Addendum: I am updating this post from a hook-up in a Mexican Wal-Mart, the quickest connection and best keyboard I have had to date.

This week James Surowiecki will join Marginal Revolution as a guest blogger! James is one of the few journalists who really “gets economics,” which is why he has been called the “best business journalist in America.” He has written for Slate, Wired, has a regular slot at the New Yorker and is the author of the highly acclaimed new book The Wisdom of Crowds. We are looking forward to his insights!

We are one year old today! Here is our first post. Since that time we have written 1,685 posts (388 from myself and an incredible 1,208 from Tyler, the remainder from some great guest bloggers) and have had over 870,000 visitors. When imported into Word, MRs first year is 1,842 pages long. Technorati watches 3.5 million blogs and ranks Marginal Revolution at number 463 and rising! Pretty good for a 1 year old. Sorry to crow but heh, I have to be paid somehow.

We are very pleased to have Eric Helland guest blogging with us. Eric has just finished a year as a senior economist with the President’s Council of Economic Advisers. So now instead of writing pithy statements of economic wisdom for the President he will be writing them for you. A tradeoff perhaps of power for attention. Eric is now back at Claremont-Mckenna College in California. He is the co-author of many brilliant papers (see here) as well as the co-author of many other very good papers (see here). We are delighted to have him with us.

I in no way approve of this sophomoric and sexist attempt to use sex to teach calculus.

…at least to horny young males.

We are very pleased that our colleague and friend Bryan Caplan will be guest blogging at MR for at least the next week or so. Since we argue with Bryan nearly every day he has been a sort of unofficial guest blogger for some time but you have been hearing only one side of the argument! No doubt, Bryan will soon set the record straight.

Not only are they paying dividends, but they are seeking to unload the beloved Slate.com as well:

Microsoft Corp. is in talks with five or six potential buyers for its online magazine Slate, an executive said Friday.

Scott Moore, general manager of MSN Network Experience, which handles content for Microsoft’s MSN division, said the company is in early discussions with several media companies over a potential sale.

Moore declined to identify the companies, and cautioned that the deals might not come to fruition. “We’re at the beginning of the process,” he said.

Moore said Microsoft has been approached before about a possible sale of Slate, but this is the first time it is taking the offers seriously. He said Microsoft is especially interested in a deal that might allow it to create a partnership with another media company, which could potentially help increase advertising revenue on the MSN site.

The paper version of this article mentions The New York Times and Washington Post as possible buyers.

Here is the full story.

The bottom line: Slate will get worse. Current revenue is $6 million a year, the site breaks even, and visitor numbers are falling. Microsoft can treat it as a kind of vanity project, but trying to squeeze regular profit out of it is unlikely to succeed.

Above and beyond the ephemeral value of superior style, what is the source of Apple’s long-term competitive advantage? True, they have more artists signed up, but this is likely a short-term phenomenon. And there is a more serious problem as well:

MP3s downloaded from Sony’s Connect service can only be played on Sony’s MP3 Walkman, and not on the more popular iPod (and vice versa).

Behind the scenes, the battle waging for commercial dominance is reminiscent of the early 1980s cut-throat competition to establish video standards between VHS and Betamax. And lest we forget, VHS won despite being technically inferior.

Although Apple has been the pioneer in the MP3 market, with Sony/BMG controlling 25 per cent of the music market it will be interesting to see whose digital distribution platforms will survive. Will all those expensive iPods we have been rushing out to buy wind up piled high in car-boot sales alongside Betamax video players and 8-track cassette machines?

Here is the full account.

Going out on a limb: I’ve never been convinced that the “iPod as we know it” could make money, especially once the market becomes more competitive for hardware. Right now the songs are being used as a loss leader for the gadget. And dare I cite Apple’s history of being a leader with ideas but failing to lock up the market? But hey, I’m the same guy who said the Dow was overvalued at 7000 and the single European currency would never happen.

Addendum: Andrew McGuinness recommends this reading on the topic, especially the excellent section five.

I don’t know but Tyler is off to Scotland so stay tuned to this spot for more information.

According to research from Forrester Consulting, 44 per cent of large corporations in the United States now pay someone to monitor and snoop on what’s in the company’s outgoing mail, with 48 per cent actually regularly auditing e-mail content.

The Proofpoint-sponsored study found the motivation for the mail paranoia was mostly due to fears that employees were leaking confidential memos and other sensitive information, such as intellectual property or trade secrets, with 76 per cent of IT decision makers concerned about the former and 71 per cent concerned about the latter.

Here is the full story, from the ever-excellent www.geekpress.com.