Tsavo Media To Pay Yaho...

Tsavo Media , which operates a network of roughly 300 websites and blogs as an indirect subsidiary of Canadian online publishing and advertising company Cyberplex , is being retroactively charged $4.8 million “over a reasonable time period” by Yahoo for sending the latter company’s advertisers “low quality traffic” in 2011. To boot, Cyberplex president Ted Hastings (formerly Tsavo Media’s CEO), apparently jumped ship. It’s a curious story, to say the least. Tsavo Media, once led by former MySpace CEO and previously AOL SVP Mike Jones , was acquired by Cyberplex back in May 2010, for a reported $75 million . The company’s network of Internet publications includes crappy websites like LumaGardening.com , ThinkFashion , TechSerious , WealthyGeek , Twirlit , DiscoverFame and KidGlue . Now, according to a press statement released earlier today, a Special Committee of the Board of Directors of Cyberplex has been appointed to “review the status of Tsavo Media and strategic alternatives available to create shareholder value out of that division, which is currently heavily encumbered by debt under Tsavo Media’s credit facility with American Capital”. I bet this wasn’t what they had in mind when they acquired Tsavo Media. But then again, what good could have come out of buying a crappy content generation machine anyway? Cyberplex had this to say about the sticky Yahoo situation it now finds itself in: The Company reported today that Tsavo Media has been engaged in discussions with Yahoo! to address concerns regarding the quality of traffic provided to the Yahoo! advertising base, and Tsavo Media’s reliance on Yahoo!’s traffic quality reporting system. Tsavo Media has now been informed that it will be required to pay to Yahoo! approximately $4.8 million over a reasonable time period currently being discussed, notwithstanding prior information that indicated good quality traffic at that time. This amount may be partially offset by achieving certain performance incentives and anticipated improvements in average revenues per click, but the Company noted that there can be no assurance as to how much, if any, of this payment to Yahoo! would be offset through these incentives and improvements. Translation: unless a miracle happens, we’re going to have to cough up some serious dough, and we can only hope we don’t have to pay everything all at once and in the near future. The Company noted that Yahoo! provides bi-weekly quality reports to Tsavo Media, which are extremely important to Tsavo Media in the management of its systems, analysis, forecasting and ultimately its day-to-day business decisions. Yahoo! recently communicated to Tsavo Media that notwithstanding the good quality score reports that had been provided throughout most of 2011, Yahoo! would retroactively charge Tsavo for what Yahoo! is now saying was actually low quality traffic, ranging back over many months during 2011. While the Company and Yahoo! remain in discussions on this issue, the Company now expects that Yahoo! will enforce its decision to charge back this amount citing its right to do so pursuant to the terms of Tsavo Media’s agreement with Yahoo! Translation: first Yahoo says we did a good job last year, but now they say we did a bad job, and according to the deal we agreed upon they can actually retroactively charge us for it. “We are very frustrated by the timing of these events after spending almost one year rebuilding the Tsavo organization while negotiating a settlement with American Capital”, said Geoffrey Rotstein, CEO of Cyberplex. “These events are disappointing given all of the hard work the Tsavo employees have invested to rebuild the organization and because they continue to take away and distract from all of the other positive developments and momentum being created within both Tsavo and the other divisions of Cyberplex.” Translation: Oh FFF******CCCKKK.

AOL to Lean On Right Me...

AOL sticks with Yahoo for real-time bidding in mega display ad agreement.

Why It’s Good News Heal...

Editor’s note:   This guest post was written by  Dave Chase , the CEO of  Avado.com , a patient portal & relationship management company that was a  TechCrunch Disrupt finalist . Previously he was a management consultant for Accenture’s healthcare practice and founder of Microsoft’s Health platform business. You can follow him on Twitter  @chasedave . Image is courtesy of Wikimedia Commons. I know of no industry where technology is as despised as it is in healthcare. It’s telling that it took government money to incentivize healthcare providers to finally do what virtually every other industry has done — apply information technology to streamline processes. “Established technology is being given a federally funded new lease on life,” athenahealth CEO Jonathan Bush said. “Traditional health software now is on Medicare, being kept alive like grandma.” Bush dubs this program as the “cash for clunkers” program for health IT leaving no doubt what his opinion is regarding the legacy vendors’ solutions. While one might dismiss this coming from a company with a dog in the fight, the feeling is nearly universal amongst doctors who are the most important users (besides patients who are almost completely ignored). Perhaps the best evidence of how abysmal legacy healthIT is, is that even the market leader is having trouble getting medical practices to adopt their software despite huge subsidies from large health systems. In the course of discussions with large health systems, they often proudly shared the deployment of a mega EMR and how they were offering subsidies to affiliated physicians to adopt the same system. When pressed about how broadly it was being adopted by non-employee physicians (i.e., MDs who have a choice), the penetration was staggeringly low — 2/10 of one percent was the average of those who shared figures. This was despite the fact that they were subsidizing 85% of the cost (the maximum allowed by Stark Law ). When I’ve spoken with physicians who have rejected the entreaties from their affiliated health systems, it’s more than the expense (even after a massive subsidy, it’s still several thousand dollars plus monthly costs). Rather, the complexity and lack of user friendliness is the bigger driver. HealthIT Vendors Reflect Flawed Reimbursement Model All of this begs the question, “why is HealthIT so bad that massive government and health system subsidies are required to drive adoption?” And how can this possibly be good news? Let me address the issues and then I’ll conclude with the good news. While it may seem easy to bash legacy HealthIT vendors, my experience has been that vendors reflect their customers. I would take this a step further. In the case of healthcare, customers reflect the reimbursement model. It’s a reimbursement model that is so broken Americans pay nearly twice as much as other countries to get inferior outcomes. The “do more, bill more” reimbursement model in the U.S. has been at the root of healthcare’s hyperinflation (fun fact: while what we spend on all other goods and services has increased 8x since the 60′s, healthcare costs have skyrocketed 274x). The byproduct is a focus on activity rather than value/outcome, the primary IT focus has been how you can get more bills out faster. Despite the fact that most physicians call the patient the most important member of the care team, in reality, the “patient” as architected into most HealthIT has been little more than a vessel to attach billing codes to. More recently, there’s been a drive to add so-called Patient Portals to involve the patient. However, these have been more driven by marketing objectives than truly rethinking the care delivery model. Making the patients central in a system designed for optimizing billing is even less likely than Yahoo or Microsoft surpassing Facebook in social networking. Both require a different architecture from the ground up. As I wrote earlier, EMR portals are like driving a 747 to the grocery store — it can get you there but it’s going to be far more expensive and complex than necessary. Convoluted Decisions Processes Have Killed Great Products When I’m asked why I didn’t get back in to healthcare sooner, I share with them a story from my past. I was at a well recognized hospital implementing their patient accounting system and we needed to decide the unique patient identifier scheme. It’s an important decision, but they were in year seven of debating what the new scheme should be! It may seem like an absurd example, but it’s indicative of how interminable and almost crazy the decision processes can be in a health system. It virtually guarantees that the only companies that can survive those processes are incumbent vendors — breakthrough young companies die on the vine waiting those processes out. If you wonder why MUMPS is still widely used in healthcare, it’s because old vendors, and old technology persists in healthcare. Separation of Consumptive User and Economic Buyer The role of Chief Medical Informatics Officer (CMIO) is relatively new and long overdue. The idea is a senior level physician plays an integral role in IT decision processes. However, there are still many scenarios where the people who will actually use software are a great distance from those who pay for the software. In other industries, the rise of SaaS software has closed or eliminated this gap where you see individuals and departments not waiting around for IT to pick something that they don’t want to use. Rather, they can directly contract with the technology company. This has only just begun in healthcare. There was a parallel scenario 10-15 years ago when multi-million dollar CRM implementations from companies like Siebel weren’t embraced the way Salesforce.com has been embraced today. A key driver of this is the user of Salesforce.com is often only a step removed from the purchaser. One Item For Which HealthIT Vendors are Fully Responsible Most of the items above put the root cause at the provider level. However, there persists one insidious practice. There are various ways to ensure customers stick around as long as possible — lock-in or loyalty. Successful SaaS businesses are built on the loyalty model. Rather than holding data hostage or locking customers into long agreements, they believe that the more freedom you give customers, the more loyal they become (assuming you deliver the goods). In contrast, there’s still the old model of lock-in used in many HealthIT vendors. For example, they make it expensive and/or difficult to get access to data in a system to keep any in-house or 3rd party built system from being integrated. These vendors pull it over on naive customers by telling them that it’s a ton of work when it’s only a ton of work if that vendor is incompetent. Like escaping an abusive relationship, healthcare providers must take action or else they reward that behavior. The Good News Tectonic shifts are underway. Smart healthcare providers are trying to avoid making the same mistakes newspaper companies made in the late 90′s. For those of us used to the convoluted, interminable decision processes of the past, it is breathtaking to see the decision processes of today. As I detailed in the Rise of Nimble Medicine , not only are entrepreneurial ventures popping up like weeds, healthcare providers are getting far more aggressive about trying new models without doing the equivalent of organizing the Roman Legions. Naturally, when a project is hugely expensive and will take months to implement, it’s going to lead to a longer decision process. However, the principles we see in agile software development , are spreading to healthcare delivery. I’ve seen scenarios, such as in telehealth, where the time from initially seeing technology to moving into implementation takes less than a week. The startups that are adept at finding the nimble organizations will have great success. The reward for healthcare providers in rationalizing their decision processes is they will no longer have to settle for rigid software that is difficult to implement. The best news for healthtech startups is that, by definition, legacy HealthIT is optimized around the flawed reimbursement model of the past. The disruptive innovators instinctually know that they will either have to build their own software (if there isn’t off-the-shelf software) or they can work with software companies that allow them to be nimble. There is universal agreement that anything less than a fundamental redesign of healthcare will fall short in solving the most important problem the U.S. and the world faces — spiraling healthcare costs. Related story: Money Ball for Medicine – Business Models for Healthcare

Google Hand-Holds Congr...

Google must be getting paranoid by now. I bet Larry Page can’t fart without getting a letter from Congress these days. The latest Congressional attention of course comes from the latest privacy scandal to hit the Internet. Oh, I’m sorry, I must have channeled my inner sensationalistic blogger for that last line. The only thing that has really happened, at least as Google says it of course, is the consolidation of privacy policies. That idea was enough to get members of Congress to get their hands out of lobbyists pockets and realize that the cameras might be rolling in an election year so they jumped to attention and called Google to protect your interests (wink, wink, nod, nod). Google responded on their Public Policy Blog Last week we heard from members of Congress about Google’s plans to update our privacy policies by consolidating them into a single document on March 1. Protecting people’s privacy is something we think about all day across the company, and we welcome discussions about our approach. We hope this letter , in which we respond to the members’ questions, clears up the confusion about these changes. We’re updating our privacy policies for two reasons: First, we’re trying to make them simpler and more understandable, which is something that lawmakers and regulators have asked technology companies to do. By folding more than 60 product-specific privacy policies into our main Google one, we’re explaining our privacy commitments to users of those products in 85% fewer words. Second, we want to make our users’ experience seamless and easy by allowing more sharing of information among products when users are signed into their Google Accounts. In other words, we want to make more of your information available to you when you’re signed into Google services. Now I will be completely honest here. I have not done a deep dive into these changes and I honestly could give a rip about the supposed injustices Google is perpetrating upon the masses with privacy policy consolidations and Google+ favoring searches. I will leave that for the long-winded to wrestle with over and over and over. As a rather “normal” user of Google’s services I realize that I can yell, scream, hold my breath, write 2,000+ word rants about things and to what end? None. Why this attitude? It’s because this is a free market and free markets allow for things to happen. Oh and whining is REALLY unbecoming. OK, class, let’s go over this one again. it looks like everyone needs a refresher. Repeat after me. Google is a company, not a government entity Google can do whatever it wants to do as long as it breaks no laws (that are real laws not ones that bloggers make up or redefine) Most people are not lawyers and wouldn’t know the definition of monopoly or antitrust if came up and kicked them in the shins If Google screws up and makes its products worse through its own decisions that is their problem If I don’t like what Google does I have options like Bing, Yahoo, Blekko, DuckDuckGo etc etc etc Congressmen and women like to see themselves in the news Congressmen and women make a lot of money from people who don’t like Google and and from those who do (each side’s money is green so it’s easy to be confused) Google, just like IBM and other huge companies before them, will make colossal mistakes that might take the company down. It’s called doing business. They should be allowed to screw themselves up if they see fit. There’s more but it gets old doesn’t it? Just to wrap this up Google points out that there are many things that are staying the same. Here is their list. You can choose to believe them or not. Even though everyone who wants to handcuff Google doesn’t get this, it’s still a free country and people are actualy smart enough to make decisions on their own. Oh and if they are fine with the way things are (meaning in many cases they are blissfully unaware) it’s fine too. Anyway …… Some important things aren’t changing: We’re still keeping your private information private — we’re not changing the visibility of any information you have stored with Google. We’re still allowing you to do searches, watch videos on YouTube, get driving directions on Google Maps, and perform other tasks without signing into a Google Account. We’re still offering you choice and control through privacy tools like Google Dashboard and Ads Preferences Manager that help you understand and manage your data. We still won’t sell your personal information to advertisers. We’re still offering data liberation if you’d prefer to close your Google Account and take your data elsewhere. So lock and load everyone. This is far from over and those with the most at stake (I.e lobbyists, Congress people and Google’s competitors) won’t let this rest. Good luck doing “clean” business Google. You are definitely going to need it.

Apple Buy Hollywood? Th...

Editor’s note: Jordan Kurzweil ran AOL’s original programming and video group from 2004-2007, and before that built and Fox Entertainment’s first digital studio (1999-2002). He now runs Independent Content , an agency that helps media companies launch new digital products and businesses. Apple should not use its $100 billion in cash to buy, or buy into Hollywood . While it would most assuredly (ahem, cough) disrupt the system, it would not spur the kind of creative chaos and innovation that would lead to the Emerald City of any show, on demand, for free, to rent, or buy, or subscribe, and organized by taste or popularity, or you! In fact, Apple buying into Hollywood, would actually kill Hollywood. Here’s why: Time and again, tech companies have proven a keen disability when it comes to marketing and promotion. It is an amazing blind spot, likely born out of tech culture’s macro focus on “the platform” and its abundant disregard for the bits that fill it (the content). From iTunes, to Netflix, to YouTube, and to Yahoo!, AOL and MSN before them, not a single tech company has been able to build and launch a single media brand that connects in any real way with an audience. They have failed time and again to build awareness and excitement for original shows, live events, new content verticals and new apps with audiences remotely approaching mass. The proverbial timeline is littered with a never ending list of momentary memes, flashes in the pan and never cut-throughs: wacky one of a kind animated web shorts, Red vs. Blue , Lonely Girl , Prom Queen , In the Motherhood , The 9 , Gold Rush , The Failure Club . And building excitement — at scale — is what unlocks the value of content. In contrast to the Hollywood marketing machine, tech companies devalue content. Some would say they do this by making movies, TV shows, music and apps ubiquitously available for low cost, or, for OMG free! But really, tech companies devalue media by jamming it into impenetrable noisy troves, stacks and databases filled with other content of equal, better or worse quality making it completely undiscoverable. Look at iTunes, NetFlix, Amazon and YouTube – tell me, where’s the good stuff at? If I were Steven Spielberg, J.J. Abrams, or Matt and Trey Parker, I would not want you to take my creative baby and drop it willy-nilly into one of the behemoth digital grist mills left to fight against light saber wielding kitties and direct to DVD softcore. The Apple App Store with its hundreds of thousands of apps does not build value for individual apps, or create real revenue for but a select few top players. It builds value for Apple, by achieving scale, so Apple can make bunk loads of cash by taking pennies off of each transaction, and selling more hardware. What is missing from all digital entertainment services are efficient, effective promotional platforms — and throwing algorithms, ratings and popularity and trending data at the problem, or gobs of display ad inventory are not solutions. Yes, these tactics help sift and sort the databases of content, or game audiences into clicking and trial, but they do not bolster new brands, help them find audiences and build hits. Can the homepage of the iTunes store build mass hysteria for the next Avatar? On a smaller seemingly more achievable scale, can the homepage of YouTube create demand for the next season of Mad Men? No. But if the next season of Mad Men was only available on YouTube, it would certainly make a large group of people go to YouTube to watch (that is if they could find it), because Mad Men already has value. Netflix, Amazon, iTunes and YouTube need to develop marketing chops, and ways to communicate with audiences on a deep visceral level. They all have a huge and powerful opportunity to move audiences — an intimate, activated, one-to-one relationship with a person sitting just an arms length away from their computer screen; or on their couch with a brand-new jury rigged gadget, invested, motivated and ready to get their socks knocked-off. Instead, users are greeted with a miasma of cover art, lists of titles in all shapes and sizes and a search box — no communication, no connection. How can digital entertainment services connect with audiences? Three easy steps, and a bonus feature: People. Tech companies need to hire people to shine a light on the best stuff, and craft the stories that sell it to audiences (at least for now, until computers catch-up and develop wit, emotion, creativity the ability to write with heart). Some people call this curation. Others packaging and promotion. Design. They need to create interfaces to capture audiences and connect to users. Living, breathing beautiful displays that make you watch, and want to click. Tools. Tech companies should leverage what their platforms do best — target, track and account — to deliver those stories to interested audiences en masse. Bonus feature: Marketing money. If companies like Apple plan to get into the first-run business, they need to deploy some of their treasure chest on good old marketing, online and off — TV commercials, movie trailers, billboards, print, PR campaigns, online display, SEM, social, events and so on. And not to market their platforms, to market programming. Hollywood is right to resist licensing first-run content to the Valley. The platforms aren’t there, and there’s no discernable path to building value or profit. But once tech companies begin to crack the code of their own networks, develop their promotional muscles, and commit to spending real marketing money to build new media brands, then they will truly be on the path to fuel growth and effect positive change on an industry in search of a future. And they will have the latitude to make advances in how we consume our entertainment.