MySpace was where you went in the past, WordPress and Movable Type were where people went if they had the patience and writing output to maintain a traditional blog, Facebook was where you went to define yourself by schools and checkboxes, and Tumblr was where you went to make your own identity and express your creativity.
People tell me that content is king, but that is not true at all. Most people make money pointing to content, not creating, curating or collecting content.
Rishad Tobaccowala, chief strategy and innovation officer at Vivaki, to the Wall Street Journal, Content Deluge Swamps Yahoo
The Wall Street Journal outlines how Yahoo and AOL are struggling with their ad-supported business models.
In a nutshell: in the not so distant past having great scale almost guaranteed profits, but with the proliferation and commoditization of most content that’s not the case anymore.
As the article’s authors write:
It’s a simple rule of any market. The more information that is created, the more the value is reduced. And despite attempts to woo spending with bigger, bolder and more targeted ads, services that help consumers navigate that content, namely search, remain the big money makers online.
In other words, services that make content discoverable either via search (Google) or social (Facebook) are thriving.
In 1998 Yahoo was charging CPM rates of $25, according to the Journal, that’s now down to $6.50.
According to analysis conducted by German Web monitoring company Sistrix, the impacts of Google’s Farmer search algorithm update has been a dust bowl for crummy content cash cows. Though affecting just 12 percent of websites in the U.S., according to Google, the changes have been immediate and blistering.
Among the top 25 spam sites, a traffic decline in the high 70-percent range is not uncommon. Ten sites on the list saw their traffic decline by 90 percent or more once Google closed the tap.
One of the hardest hit sites was Associated Content, which Yahoo bought in May 2010 for $100 million. Traffic to the site is down 93 percent based on data from the Sistrix database, containing 1 Million tracked keywords.
One name that is not on the Sistrix list is Demand Media, a company who many view as the archetypal content farm.