I am re-posting this from the edgeio blog. Mainly because I think it has current relevance and will in future have historical value.

I’m not certain the edgeio blog will continue to exist, so this is the new home for the post. Since it was originally written we have seen the rise of Adbrite, Glam, Sugar Publishing, Digg and other businesses based on understanding the proliferation of publishing, reading habits, and advertising away from the big portals. I also note that Chris Anderson of Long Tail fame commented on the post, something I failed to notice originally. So, here is the original post

This post is a little more philosophical than most that you will see here. It provides a little bit of background as to why edgeio is in the business of bringing together, organizing and distributing listings to the edge of the network. In short it is because we believe that the Internet is moving away from big centralized portals, which have gathered the lions share of Internet traffic, towards a pattern where traffic is generally much flatter. The mountains, if you will, continue to exist. But the foothills advance and take up more of the overall pie. Fred Wilson had a post earlier this week about the de-portalization of the Internet which is essentially making the same point when seen from the point of view of Yahoo.

Update: 11am Pacific, Sunday 10 December Several commentators are seeing the word “de-portalization” (first coined by Fred Wilson) and reading “end of portals”. To be clear, and apologies if I wasn’t already, de-portalization represents a change in the relative weight of portals in a traffic sense, and the emergence of what I call the “foothills” as a major source of traffic. This will affect money flows. Portals will remain both large and will continue to grow. But relatively less than the traffic in the foothills. The foothills will monetize under greater control of its publishers and the dollar value of its traffic is already large and will get much larger.

The first picture is a rough depiction of Internet traffic before the flattening

The second picture is a rough depiction of today – with the mountains still evident, but much less so

The third picture is where these trends are leading. To a flatter world of more evenly disributed traffic.

Some of the consequences of this trend are profound. Here are our top 10 things to watch as de-portalization continues..

1. The revenue growth that has characterized the Internet since 1994 will continue. But more and more of the revenue will be made in the foothills, not the mountains.
2. If the major destination sites want to participate in it they will need to find a way to be involved in the traffic that inhabits the foothills.
3. Widgets are a symptom of this need to embed yourself in the distributed traffic of the foothills.
4. Portals that try to widgetize the foothills will do less well than those who truly embrace distributed content, but better than those who ignore the trends.
5. Every pair of eyeballs in the foothills will have many competing advertisers looking to connect with them. Publishers will benefit from this.
6. Because of this competition the dollar value of the traffic that is in the foothills will be (already is) vastly more than a generic ad platform like Google Adsense or Yahoo’s Panama can realize. Techcrunch ($180,000 last month according to the SF Chronicle) is an example of how much more money a publisher who sells advertising and listings to target advertisers can make than when in the hands of an advertiser focused middleman like Google.
7. Publisher driven revenue models will increasingly replace middlemen. There will be no successful advertiser driven models in the foothills, only publisher centric models. Successful platform vendors will put the publisher at the center of the world in a sellers market for eyeballs. There will be more publishers able to make $180,000 a month.
8. Portals will need to evolve into platform companies in order to participate in a huge growth of Internet revenues. Service to publishers will be a huge part of this. Otherwise they will end up like Infospace, or maybe Infoseek. Relics of the past.
9. Search however will become more important as content becomes more distributed. Yet it will command less and less a proportion of the growing Internet traffic.
10. Smart companies will (a) help content find traffic by enabling its distribution. (b) help users find content that is widely dispersed by providing great search. (c) help the publishers in the rising foothills maximize the value of their publications.

Discussion

Kevin Burton Techmeme Mike Arrington Syntagma Keith Teare’s Weblog Dan Farber at ZDNet Mark Evans Fred Wilson Ivan Pope at Snipperoo Tech Tailrank Collaborative Thinking David Black Surfing the Chaos Ben Griffiths Dave Winer (great pics) Kosso’s Braingarden Dizzy Thinks Mark Evans Dare Obasanjo

In spite of Mike banning us from competing for any of the prizes at TechCrunch50 (due to my shareholding in both TechCrunch and fotonauts and so a perceived conflict of interest) Jean-Marie Hullot, David Rosenblatt and I had a great time at the event last week. We showed the world fotonauts for the first time, launching the private beta of the Mac and Windows application and the web service. To top it all CNet (which had no conflict) put us in the top ten companies from both TechCrunch50 and DEMO.

You can see Jean-Marie’s 8 minute presentation, sign up to be invited to the private beta and read the press coverage: here.

But, perhaps more exciting than all of that, we just released the widget publishing element of fotonauts into the wild. Joi Ito was the first to go live with it on his blog – here and here.

In honor of the moment, here is Joi’s experimental FreeSouls widget. In the spirit of the fotonauts project, all pictures are creative commons licensed and so I can re-produce them here for your viewing pleasure.

And here is my experimental TechCrunch50 Album:

We have many thousands of requests to be invited to the private beta – thank you – and we expect to start releasing invites during October. I’ll get more precise as the exact dats become clear.

Ok, I became a US citizen last week and there is a danger, amidst all of the patriotic outpouring that is the citizenship ceremony, and the frenzy of Phelps generated nationalism, that in response I am over-compensating. In other words I may be seeing devils where there are none.

However, what I am about to show you seems, on the face of it, a cheap attempt to make the US Olympic effort seem better than that of the host country, China.

Here is the official medal table from the Olympic Committee’s official web site:

Now, look at the NBC version of the table:

Wow – the US is first

To be sure I checked out the BBC’s site. Here is its version:

So…. why do all US based Olympic medal tables deviate from the official version, whilst the rest of the world does not? Could it be that the only way to get the US in first position is to add Gold, Silver and Bronze into a total and then order the results by total medals won, implying that all medals are equal?

Or to put it another way – let’s assume you applied this methodology to a single event, oh I don’t know, let’s say… swimming (ludicrous I know, but it makes the point) – that would mean that the silver and bronze medal winners in Phelps events are counted equally to him, and so a person who won 1 gold, 3 silvers and 7 bronzes (11 medals in total) would be a bigger winner than Phelps.

Makes no sense does it

Update 2:Rafat has a comment to this post pointing out that by just looking at paidcontent.org I am doing the valuation of ContentNext a disservice. Of course he is quite right. ContentNext has other sites and also events. It is also true to say – although Rafat doesn’t – that valuation has many variables, including the quality of the people etc. Rafat is very good at what he does and he has a great team. So … fair point Rafat.

In my own defense, this post is not intended to be a scientific analysis of valuation. I did a “back of the envelope” comparison. I didn’t take into account any of the other sites that GigaOm has, or TechCrunch, or ReadWriteWeb. I also didn’t take into account TechCrunch events. All I was saying is, there are probably (by relative comparison of the web sites) some pretty valuable businesses out there right now. Hope you agree with that Rafat.

Update: Kara Swisher is speculating who’s next. Jeff Jarvis is hoping she’s wrong. Now there’s a Techmeme discussion.

The news that Rafat Ali’s ContentNext, owner of PaidContent.org, has been acquired by the UK’s Guardian Media Group got me to thinking. What does this mean for the valuations of other Tech blogs?

I did a quick back of the envelope calculation based on the numbers published and the Compete.com stats for June 2008.

By this math PaidContent.org got something like $139 per unique reader or $56 per visit as an acquisition price. Of course the Compete stats will not be wholly accurate (although Quantcast has Paidcontent.org at only 40,000 unique visitors, so Compete could be high)

Using Compete.com for 4 other significant technology Blog services we get some interesting numbers. TechCrunch should be valued at between $200 and $450m; GigaOm at between $46 and $55m; ReadWriteWeb at between $63 and $65m and Venturebeat between $50 and $53m. I’d say a merger between these 4 would bring them collectively up to about $350-500m even without the synergies and growth prospects of being one. I also looked at the search analytics data from Compete.com. 4,563 keywords for TechCrunch, 585 for GigaOm, 913 for ReadWriteWeb, 581 for Venturebeat and 363 for PaidContent.org Interesting indeed.

I am adding some graphics from Compete.com (all from this URL).

Disclosure: I am a shareholder in TechCrunch – along with Mike Arrington.

Nicolas Popp – a leading advocate of Open Identity and data solutions – posted on his VeriSign blog today following the rather heated discussions that have ensued since Google announced its Friend Connect product recently.

Nico’s employer – VeriSign – along with Microsoft, Yahoo, Google, AOL and others, is a member of the board of the OpenID foundation.Nico’s primary argument (emphasis mine) is that:

Undoubtedly, data portability is the natural child of federated identity (more on that in a future post). Personal and social data are an important part of any consumer identity’. Like identifiers, credentials and profile attributes, social graphs, activity streams belong to the end user who created them in the first place. In the long run, consumers will require full control, privacy, security and portability over such personal information. Therefore, the identity technical community must engineer a new and comprehensive identity portability layer. The new layer needs to broaden the tradition notion of identity federation beyond names, passwords and profile to encompass the full gamet of personal and social data. Furthermore, this new layer must support a plurality of identity service providers who can compete and distinguish themselves by the quality of their service and the user experience that they provide. Freeing our data off Web portals and social networks by creating a new service layer dominated by one single service provider is hardly trading one master for another.

I am in full agreement with this approach. And .. as coincidence would have it, last week I registered the domain name – itsmygraph.com – with a view to beginning to participate in this discussion. I have an early draft of my thoughts. They are at sites.itsmygraph.com. But as a teaser – here is my high level view of the evolution of Internet Users:

I would love to get feedback on your thoughts about the future of data portability and its relationship to OpenID and OAuth.

My personal view is that Michael Arrington had it right when he said recently:

I’ll say what the OpenID Foundation cannot, for political reasons – It’s time for these companies to do what’s right for the users and fully adopt OpenID as relying parties. That doesn’t fit in with their strategy of owning the identity of as many Internet users as possible, but it certainly fits in with the Internet’s very serious need for an open, distributed and secure single log in system (OpenID is all three). If and when the Big Four become relying parties, the floodgates will truly open and there will be no looking back. And until they do that, I’m not buying that they really support what OpenID is trying to accomplish.

The Conversation:

Techmeme TechCrunch ReadWriteWeb

I spent a great morning watching Manchester United beat Wigan 2-0 to become English Premier League champions.

After a nail-biting 90 minutes, Chelsea eventually only tied with Bolton 1-1. united were far and away the best team all season. Next up….. United v Chelsea in the European Champions League final – May 21st. Can’t wait.

As the man says – “Unbelieveable”!

Marvel lawyers have sent a cease and desist to TechCrunch on the plans to show Iron Man for $1 a seat – tomorrow in San Francisco.

What – gives? Play the video and see. You can leave video comments here (click on the Seesmic link in the comments)

I’m a big fan of Dave McClure’s approach to product marketing.

Today he gave a talk and led a discussion at Web 2.0 Expo. His slides are below.

Andrew Chen has a good follow up

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I just looked at my Wordpress dashboard and noticed that Marc Canter had linked to me. Curious, I clicked to see what Marc (who is always interesting) had been up to.

Wow! What a nice surprise. Not only did he describe me as one of the:

Major players and people to watch and listen to:

which is always great for the ego .

But he has written an awesome series of posts about the emerging trends in data, architecture, and users.

Here is the post I read first, but it is part of a series entitled “How to build the Mesh”.

I won’t repeat Marc’s lengthy discussion here, just to say – go and read it.

Part 1 is Social Graphs and Groups Part 2 is Persistent, Ubiquitous Content Part 3 is Shared Structured Content Servers

Part 4 is on the way.

Marc is not only, together with Chris Messina and Tantek Çelik, a really focused advocate of open, user-centric, web services. He is also a brutally honest, yet nice, guy.

I just got this email from Slideshare:

It is based on a post I did yesterday to earningscast.com You can check it out here: Slideshare Here’s the homepage.