The decision to sell the business and move to Yahoo! was relatively simple. As anyone playing in the online space understands, online media is all about scale. The ability to garner real CPMs, the ability to sell ads directly, the ability to provide innovative solutions to advertisers, all depend on having tens of millions of unique visitors. As the Publisher of BuzzTracker.com and before that RealClearPolitics.com, that point has been drilled into my consciousness over the past two years. Yahoo! News is the leader in online news — the number one player according to both ComScore and HitWise, and I am extremely excited to come aboard as General Manager and have the opportunity to drive value from News, extend Yahoo!’s leadership position and contribute to their commitment to being more open by bringing the best content from across the web. I also get the opportunity, with my team, to bring BuzzTracker, the blogs we cover, and our thousands of granular topical content feeds to millions of users and thousands of advertisers.

Follow the discussion of the transaction at BuzzTracker.

It’s been a while since I posted - but I felt the need to chime in on all the discussion about Geography and how it relates to your startup — and to online media in general.

Ross Mayfield (bottom of the post) asks Dick Costolo of Feedburner:

So Dick, let me ask you one question that I think you are in a great position to answer, at least to keep you going. How does an Internet entrepreneur overcome not being in the Silicon Valley? I’ll bet it is more than being on a plane all the time.

I’ve been a tech entrepreneur in Chicago for over 10 years now and I get that question a lot. I didn’t understand the focus on it 10 years ago and I don’t understand it now. Don’t get me wrong, everyone sees the obvious in that there is more capital and talent and entrepeneurial energy in Silicon Valley than anywhere else — but that is far from saying you can’t start a business anywhere else. Especially now in this day and age.

What do you need to start a business? You need the idea — you need to be able to build a team — you need to acquire customers — you need to be able to establish partnerships — and you need to be able to attract capital. All of these are easily done and getting easier here in Chi-town. On the team side — thanks to web 1.0 we have a slew of internet veterans running around from companies such as Performics, Participate.com (my old business), Spirian, Tunes.com to name just a few — in addition to a ton of people who have worked in both advertising as well as media (think Tribune, SunTimes, Crain’s). Plus we have five world class universities in Chicago or Evanston.

On the customer side — Chicago is not lacking for either big customers or media partners either — and we have an incredibly supportive business climate here where Chicago based businesses want to help other folks from Chicago (yes, this is true).

The area where we definitely were lacking in before was the whole networking game - 10 years ago you flew to the Valley at least once if not twice a month — plus you attended 5 or 6 tech conferences a year. But nowadays, with all the new collaborative technology out there — i can see what VCs in the Valley are thinking by reading their blogs and reading BuzzTracker Venture Capital — I can track the technology news by going to BuzzTracer Technology. And by commenting on these blogs and using new services like MyBlogLog you can really start to develop new relationships online.

As Ross himself said in a later post:

You can’t argue that the interpersonal Silicon Valley cross pollinates within a culture of sharing, and the result is fantacular. But half of what makes this work is our ability to collaborate in creating something new, but the other is how we can bring it to the world as an edge that cuts across. Look, we kick the world’s ass in marketing technology, so much so you expect it. If it comes from here, odds are you will be a fan. Until favor tips to a new marketing engine the valley will remain.

But innovations brought to market really could happen everywhere and nowhere.

The point is it easier than ever to start a business somewhere else. And in Chicago — while it is undoubtedly more difficult to attract Valley VCs — there are plenty of top tier VCs who will invest in a business here. Plus — the Angel environment is outstanding with a ton of available capital from very successful business people.

My question is never why Chicago? But why not? Why not start a business where YOU want to start a business? And if you do want to be in online media — we have a pretty fantastic confluence of journalists, advertising, and new media execs.

What do you think?

“provide washingtonpost.com with a daily feed of its “Best of the Web” series, including top recommended news articles and opinion pieces, to be featured in washingtonpost.com’s “Politics News & Analysis” e-mail newsletter and on the front page of the site’s well-regarded “Politics” section.”

More can be found here.We’re extremely excited to begin work together, and especially look forward to collaborating on new features for Election 2008.

This announcement comes on the heels of 2006 announcements with Yahoo!, FoxNews, Forbes, Time, and Opinion Journal — we’ve always felt the key to long term success was to cut distribution deals that would both build and establish our brand while also growing traffic to provide our value-add to a larger audience. Congratulations to John McIntyre and Tom Bevan, founders of RealClearPolitics for a job well done!

Let me start by saying that the principals of Participate Media have been thinking about and implementing online communities for over 10 years now — we worked together at Participate.com (sold to Outstart in November 04) from 96-04 — and we remain more convinced than ever at the power of online communities and social media to build brands, create loyalty, create value-added services, and help fuel explosive growth. We even wrote a series of whitepapers on Online Community, Return on Participation, and other topics relevant to the success of making this social media work. I posted about the Return on Participation whitepaper, and MyBlogLog here (whitepaper is available).

One of the largest values we believe a Publisher can deliver its readers is recognition — showing people off and rewarding them for their participation. MyBlogLog is the ultimate recognition engine — and even better — it rewards people for reading our site, and gives them a very quick way to find out who else is reading and enjoying the web site. For a newer site just building their first critical mass, MyBlogLog allows us to deliver this terrific feature NOW by leveraging the critical mass across the MBL network.

Now the other key benefit that you have to provide to readers is the ability to interact; to comment; to discuss. You must allow your readers to become part of your brand and to define your brand. We’ve gotten a lot of questions on — “where can I comment?” and we will be launching this shortly. We expect to work with MyBlogLog as well on this feature — as we will instantly have thousands of people registered to comment on our site.

Finally — we’re also very excited by what we expect to be a furious roll out of new features allowing publishers to show off most frequent readers, new readers, etc to the site — essentialy this should become a great platform for us to deliver more value to our user base.

What do you think?

Although we’re still in Beta for a few more weeks — we have recently completed some major improvements to the back end and front end of BuzzTracker.com — we’re super excited about it and really want to hear from you on what you think.

When we initially launched our Beta at the end of August - we knew that our design as it stood then was not the final design - but our plan was to get the site launched, get feedback, and start learning. We used the first few months of the Beta launch to really hone our vision and get user feedback on the features, what worked and what didn’t. We then engaged with Rachel Cunliffe of cre8d design to work with us to re-design the site.

We think Rachel did a great job (thanks Rachel!) and has helped us accomplish our two major objectives for the re-design:

1. It passes the “Mom Test” — ie, will your Mom, who knows how to Google but could care less about web 2.0, understand and be able to use the site
2. Since BuzzTracker will always be about thousands of thousands of topics - can we devise an interface that allows for easy navigation and finding of topics of interest.

By focussing on the main articles found by our engine for a given topic, and de-emphasizing the blogs used to generate that result, we think we’re on the right track.

On the back-end, we completely swapped out our architecture to allow true scalability simply by adding more servers. We’re now using over 90,000 content sources (compared to 30,000 at launch). Without getting into too much detail — what this means from an end user is much faster and more timely results, our ability to publish more frequently, and ultimately enables our Create A Topic feature.

The Create A Topic feature will allow any end user to create and maintain a topic of their choice by essentially using all the back end levers at our disposal to fine tune their topic — including how far back in time does one want to search and test relevancy, the ability to apply boolean search terms, among other things.

We’ve really enjoyed using the new site and we hope you do to — one tip: if you have a hard time finding your topic in the navigation simply type it into the search box — it should come right up –

Look forward to hearing from you!

I putting it up today in light of Fred’s post on MyBlogLog and my comment:

These guys have cracked the code on how to deliver Return On Community — people join and participate in communities to be seen and to be recognized (I will make my 2000 whitepaper available on my blog later today) — what MyBlogLog did was allow people to be seen and recognized faster than anybody in the business as well as make it super easy (lower the “cost”) to participate — you don’t have to comment, or think of something clever to say, you just have to register!

Genius. I also think we’re moving to a world where without these kind of value added services publishers will be very reluctant to cede valuable valuable real estate. So I think these type of services will be the new cost of entry for any kind of ad network.

Congratulations Eric!

Have a read — keep in mind it was written almost 7 years ago — and let me know what you think!

Click here to download Return On Participation

First, Evan Williams announced the formation of Obvious Corporation, to create a network of web-based services, each with a distinct purpose and brand, but sharing a set of principles and leveraging technology, attention, and good ideas where it makes sense.

Second, Reddit announced a sale to Conde Nast. Particularly interesting was that Reddit only raised about $100K.

Third and finally, Charles River Ventures announced a seed fund for startups where they would loan $250K for the right to invest in future rounds.

Lots of folks have commented on these, notably Josh Kopelman and Fred Wilson.

So it’s clear that the barriers to entry in this space are low, capital requirements are very low to get started, and as always these are attractive business investments.

The one point we would add to this discussion is we believe the lifetime need for capital for many of these businesses is also very low. We hear a lot of entrepreneurs telling us they “want to build a $100MM business” and they are looking for large amounts of capital to get there.

Our approach is much more pragmatic:

1) Be as frugal as possible in building the business. Be very smart in how you build your site, how you hire brand and design consultants, and how you build your technology (use very inexpensive and/or open source stack)

2) Cash flow your business as soon as you possibly can

3) Use free cash flow generated to re-invest and grow your business from there

What this means in practice is a) make sure your ongoing costs are as low as possible so you can cash flow at relatively low CPMs — you won’t be able to sell ads directly till you get to a certain traffic size anyway b) don’t invest in an ad sales force to start unless you are at the beginnings of scale (over 1MM uniques, probably 15MM page views per month). We see a lot of business plans that want to hire a direct sales force out of the gate; we like to hire reps one at a time and use free cash flow generated to invest in more reps.

The key is to create a business that generates a reasonable amount of cash that gives you as an entrepreneur options. For many businesses, we think that $0.5 to $1.5MM invested capital gets you there. The problem of taking $6MM is if you use it to build a business that generates $1MM in cash a year no one will be happy — not the entrepreneur and not the VC.

This does not apply to all opportunities of course — each one is different and a good VC will add tremendous value — our only point is to think about what the likely probable outcome and endgame will be as you decide on a financing strategy.

If it is *highly probable* that you can quickly get to cash flow positive quickly with a little bit of cash, we would generally recommend that approach.

Thoughts?

We have begun the process of redesigning the site;� both with some short term tweaks as well as a longer term re-haul.

Some of the ideas we are kicking around for the revised design include:

1)� A revised home page that shows all BuzzTracker categories, with emphasis on new and hot categories

2)� A “cleaner” representation of mostblogged and latest news

3)� A better way for the non-web2.0 audience to understand the site — we want the site to pass “the Mom” test — does your Mom understand it when she looks at it?

4)� More prominent ways for people to get involved — giving feedback, comments, taking BuzzTracker content for their own site via magnets, and the ability to suggest a topic

What do you think we should do?� What would you do differently?� What would you like to see?� How can we get you more excited about the site?

We’re extremely pleased to announce BuzzTracker Magnets are now available on the BuzzTracker site. Leveraging FeedBurner BuzzBoost, we are now able to allow any blogger or web site to grab one of our almost 200 topic feeds (and growing to 1,000 by Thanksgiving!) and display a text box on their site that automatically updates. As an example, if you have a NY Yankee blog, you can choose to show our Yankee category or our Joe Torre category as constantly updated content as a service to your readers. Below is a list of all current categories available; we think this is a great way to provide readers with dynamic content that will keep them coming back to your site and blog.

• Autos
• Business
• Companies
• Apple | eBay | Facebook | Google | Hewlett Packard | Microsoft | Myspace | Netflix | Palm | Payperpost | Powerset | Skype | Starbucks | TiVo | Walmart | Wikipedia | Yahoo | YouTube
• Oil and Gas
• Real Estate
• Stocks
• Venture Capital
• Entertainment
• Movies
• Music
• People
• Anna Nicole | Beckhams | Beyonce | Brangelina | Britney Spears | Jimmy Buffett Drug Bust | Justin Timberlake | Lindsay Lohan | Martha Stewart | Mel Gibson | Paris Hilton | Parkgoria | Seven Degrees of Britney | Simpson Sisters | Tom Cruise | Trumpsand | Vaughniston
• TV
• American Idol
• Health
• Cancer
• Breast Cancer | Prostate Cancer
• Diabetes
• Diet and Fitness
• Lifestyles
• Books
• Food
• Halloween
• Home and Garden
• Style
• News
• Amish Shooting
• Cities
• Chicago | Los Angeles | New York | San Francisco
• Education
• Environment
• Legal News
• Mark Foley
• Newsmakers
• Al Gore | Bill Clinton | Castro | Condoleeza Rice | Dennis Hastert | Hillary Clinton | John McCain | Oprah | Pervez Musharraf | Pope Benedict
• Nobel Prize
• North Korea
• Religion
• Science
• Sudan
• War on Terror
• Sports
• College Football
• Auburn | California | Florida | LSU | Michigan | Notre Dame | Ohio State | Oklahoma | Tennessee | Texas | USC
• Fantasy
• Football
• Golf
• MLB
• Anaheim Angels | Arizona Diamondbacks | Atlanta Braves | Baltimore Orioles | Boston Red Sox | Chicago Cubs | Chicago White Sox | Cincinatti Reds | Cleveland Indians | Colorado Rockies | Detroit Tigers | Florida Marlins | Houston Astros | Kansas City Royals | LA Dodgers | Milwaukee Brewers | Minnesota Twins | NY Mets | NY Yankees | Oakland Athletics | Philadelphia Phillies | Pittsburgh Pirates | San Diego Padres | San Francisco Giants | Seattle Mariners | St Louis Cardinals | Tampa Bay Devil Rays | Texas Rangers | Toronto Blue Jays | Washington Nationals
• NBA
• NFL
• Arizona Cardinals | Atlanta Falcons | Baltimore Ravens | Buffalo Bills | Carolina Panthers | Chicago Bears | Cincinnati Bengals | Cleveland Browns | Dallas Cowboys | Denver Broncos | Detroit Lions | Green Bay Packers | Houston Texans | Indianapolis Colts | Jacksonville Jaguars | Kansas City Chiefs | Miami Dolphins | Minnesota Vikings | New England Patriots | New Orleans Saints | NY Giants | NY Jets | Oakland Raiders | Philadelphia Eagles | Pittsburgh Steelers | San Diego Chargers | San Francisco 49ers | Seattle Seahawks | St Louis Rams | Tampa Bay Buccaneers | Tennessee Titans | Washington Redskins
• NHL
• Soccer
• Tennis
• World Series
• Technology
• Ajax
• Blogging
• Cell Phones
• Google Youtube
• Home Audio and Video
• Open Source
• Portable Audio
• Software as a Service
• Video Games
• Playstation 3 | Wii
• Travel
• World
• Africa
• Australia
• Canada
• China
• France
• India
• Iran
• Iraq
• Israel
• Japan
• Mexico
• Russia
• South America
• United Kingdom
• United Nations

We think BuzzTracker Magnets are a win-win for web sites as well as us — as it is an easy way to provide targeted, dynamic content to your audience.

What do you think?