Network Businesses

Two months ago, Mary Morgan and her husband, David Askins, founded the Ann Arbor Chronicle, a local online news site. Mary is a former opinions editor at The Ann Arbor News. It's early days yet for the Chronicle, but the general trend of print journalism moving online is accelerating, and we thought Mary could give us a good picture of what such a move is like in the early stages...

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Mary notes the following operational and tactical components that differ from traditional print publications and are a hallmark of many web startups:

  • She updates main articles two to four times daily, not unlike a blog. She also has a breaking observations section called "Stopped. Watched." that is updated more frequently based on texts, emails, and phone calls from community contributors.
  • The community plays a strong role in the paper. Mary and David provide professional editorial oversight, but other contributors do so on a volunteer basis.
  • The Ann Arbor Chronicle's revenue base is local advertisers. Distribution is important for these advertisers, but they are also looking for a local outlet that is relevant to their business.
  • Like many startups, Mary and David are giving themselves a 12 month runway to determine the extent to which they can make a go of the Chronicle.

Steve Warrington describes how he "automated" his search engine based affiliate marketing business. This "automation" boiled down to maximizing the value of his content creators' work in a well defined system to gain search visibility.

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 Steve Warrington operates a web content business that he monetizes through affiliate marketing. As described in our last segment, Steve initially stumbled into this business trying to publish an ebook on mortgage finance and realizing he could make much more money giving the content away for free and placing ads next to it. In this segment, Steve describes how he has systematized these business practices as he has opened new content areas:

  • He now discovers new content, assesses the opportunity it presents, and creates content.
  • Once a content area shows promising results, Steve hires outside people to manage the sites and post content. His main sources for additional personnel include:
  • Steve focuses his content creation efforts toward the "long tail" of organic search:
    • Organic search refers to the part of search results that are not influenced by advertising, in other words, the search results that are not labeled as sponsored links. Although it takes considerable time investment to do well in organic search results, you do not have to pay per click as you do with sponsored links.
    • The long tail refers to low volume search terms where there is not a lot of competition. On the order of 60 to 70% of searches occur using these terms. It is much easier to appear high in search engine results for long-tail search terms, although more of these terms are required to generated adequate visits.

Steve refers to this process as "automating" his work. What he is really doing is taking advantage of his contributors inputs into a well defined system designed to work in the search engine ecosystem.

RentLinx had no marketing budget to reach its primary market of landlords. RentLinx' solution was to develop a white label product for landlord associations to market to their members for them.

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 RentLinx' market is landlords. But, how do you reach that market with no budget? In this segment, Jeremy Schneider, RentLinx' founder, describes how RentLinx giveaway marketing plan came to them by serendipity. Highlights include:

  • RentLinx used to sell web sites to landlords. They approached rental associations to try to get more connections with landlords.
  • Jamie Schmunk, a board member of one of these associations, suggested they create a product that the associations could market for free to their members.
  • After some consideration, RentLinx created PartnerLinx, a white label apartment search solution that associations market to their members. When members input their data, they do so on the RentLinx site and have the opportunity to purchase value added services.
  • Associations have accounted for all of RentLinx marketing and have earned RentLinx a nationwide connection with the National Real Estate Investors Association.

Content producers do not produce their material without cost. The 9thX.com platform allows small, niche content producers to market and sell their material to support further production.

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John Bonaccorso, founder of 9thX.com makes a good point: Content on the Internet is not produced for free. However, small scale producers not producing entertainment such as music have had a hard time selling their content because  there has not been a venue for them to do so. 9thX.com has targeted this market as follows:

  • It specifically targets niche educational material such as golf how-to's, motivational speakers, teachers, and others.
  • The system does not require tech savvy for someone to use it effectively to market.
  • Digital rights management, a system to prevent unlicensed copying, is built in. The DRM system is also flexible enough to accommodate a number of potential business scenarios.

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