How weblogs are turning corporate machines into real conversations

George N. Dafermos

Version 0.91 Wednesday 15/10/2003

Abstract

It has been repeatedly argued that the process/technology of weblogs offers a novel approach towards the continuation of democratic public discourse. Within the boundaries of the firm though, the implementation of weblogs takes a whole new dimension to realising that weblogs are more than the sum of its parts: more than vibrant public forums and frequently updated streams-of-consciousness, alternative forms of publishing and online outbursts of gonzo journalism, and personal diaries. They are the embodiment of online self-organising social systems, are essentially characterised by management decentralisation and ultimately threaten to destabilise current organisational structures and re-invent the scope of management. Provided that weblogs are not co-opted by rigid corporate policies that aim at stifling the creative spirit that fosters innovation - one of the reasons for having weblog communities at the first place - weblogs can be successfully deployed within the organisation with a pervasive effect across all the stages of the value chain "achieving a greater return on connection from employee, customer and partner relationships". As an extension, they can possibly involve all interested groups; regardless of their level of attachment to the company.

In fact, weblogs have an infinite spectrum of potential applications whose viability is based on the dual understanding that weblogs are an attempt to break free from the dehumanised, standardised, conformant with corporate guidelines on how to address an audience PR speak that customers are increasingly sceptical of, and a flexible virtual platform onto which a process of cross-fertilisation among individual thoughts and ideas unfolds.

Weblogs, in other words, envisage a hierarchy circumvention mechanism, which empowers knowledgeable employees to indulge in conversations with the market rather than communicating solely by means of marketing pitches and press releases that besides have limited effectiveness in a connected market economy. For years it has been suggested that online communities will revolutionalise the way organisations operate, however, the only social process/technological infrastructure that has reached this potential and is dynamically evolving is the weblog. It takes no technical savvy to set up a weblog and start talking to your customers. That's why weblogs are huge: they take the power out of the IT department and the webmaster's hegemony and hand it over to where knowledge really resides - to the individual workers who are knowledgeable enough and know how to speak with a human voice. Now, organisational structure loses its historic role of managing power relations at a distance, and as a result the organisation becomes truly hyperlinked and power shifts to where knowledge actually resides.

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Table of Contents

Introduction

The Athenian Agora

Work and Organisations in Ancient Athens

The Demise of the Argonauts

Production Equals Progress and the “Dependence Effect”

Business is War

Niches and Relationships

Electronic Dreams

A Hitchhiker's Guide to Adidas 's E-Commerce Galaxy

Afraid of Conversations

Is this really the New Marketing Era?

Enter the Weblog

Collaborative Filtering: one of the same of marketing from the market's perspective?

Gizmodo and blogging-for-profit

The search for community and profit: Slashdot and Openflows

Macromedia is blogging at full speed

Corporate Policy on Employee Weblogs

Secret CIO Vs. Weblogs

Re-inventing Knowledge Management behind the firewall

Is your corporate email broken? Don't fix it, try weblogs instead!

The End of Corporate Email?

Authorship at Work

Killing Mrs. Hierarchy

The conversations in the marketplace have begun

Weblog Links Moderate Conversations

Weblog Links Depict Social Capital

Weblog Links Set Bombs

The End of the Destination Website

Conclusions: What lies ahead

Epilogue

Bibliography

Notes

Comments, Critique, and Reactions

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Introduction

We speak. We rant. We whisper and we shout. We swear and we flirt. We strike up conversations on the street, at the office, in front of the telly and while riding the bus. Some of these conversations mean to be casual whereas others mean not. It’s an undisputable fact that social conduct characterises human beings and we all have an inner drive to socialise with fellow human beings. Whether that is on the street, at the office or anywhere else.

The Athenian Agora

In the city-state of Athens, about 3,000 years ago, Athenian citizens used to meet regularly at the “town centre” to announce projects, discuss politics and military affairs and decide on matters of common interest. What was so peculiar about this congregation – that came to be known as ‘agora’ – is that all Athenian citizens had the right to speak their own mind about almost anything and address their fellow citizens and when a decision had to be made, no one’s vote mattered more than someone else’s. And everything took place out in the open. No single Athenian was privileged in terms of public exposure and all opinions voiced at the agora were judged against their own merit. The ability to speak, raise objections, comment and criticise was equally distributed among all attendants and power to decide on the action to be taken based on what was previously debated was also equally distributed. Some embraced their fellow citizens’ ideas, and joined a civic coalition to take immediate action provided of course that they managed to convince the majority while others detached themselves emotionally from these very same ideas and went on to counter argue and oppose them. Conflict, enthusiasm, dispute and all sorts of verbal demonstrations of human emotions and feelings were evident and encouraged. Legendary war campaigns, marches to the battlefield and critical community issues related to, say, education, sports or arts, were decided in this way rather than at the headquarters of the army general or at the palace of the ruling king (besides, there was no king). And that is what Democracy means in Greek: the public holds the power reigns. However, the organisation of the agora conveyed also something else: that power shifted to where knowledge resided. Athenians were empowered by the abstract, yet real social infrastructure of the agora to publicly demonstrate their knowledge by means of articulating arguments in favour or against of certain propositions and on these premises, to gain the respect, the approval and the support of everyone engaged in the conversation. Yet it is striking how distant this archaic “town centre” looks from the one we are familiar with. Time went by and approximately 2,150 years ago ancient Greek forces were outperformed by the Roman army in the battlefield, and Athens was eventually taken over by the Roman Empire. The Athenian democracy and agora did not ever recover. Never again in human history had people had this staggering ability to collectively make decisions and collectively implement them.

Work and Organisation in Ancient Athens

Athenians were not working at offices. To be precise, they were not particularly fond of work; they’d rather spend their time ‘cultivating’ their body and mind rather than consuming themselves as they reckoned at work. Ironically, they didn’t think that fighting wars was consuming and they thought highly of martial arts. For some time, they were indeed very successful at fighting and conquering places. So, slaves, commodities and all kinds of material goods were shipped from the colonies and from territories enslaved by the Athenian army to eliminate the need for Athenians to work in order to cover life’s essential needs. Goods brought in from the colonies took care of their hunger, thirst and clothing needs and slaves did most of everything else. But commerce was also thriving in Athens. At the time, there were no organisations in the sense we are nowadays familiar with. Instead, merchants and anyone interested in buying or selling something met at the agora where they talked, negotiated merchandise and prices, exchanged what was agreed and shook hands. Deal closed, sale done. If someone encountered a problem with something he bought, he’d also go to the agora to see the merchant he bought it from and unless the merchant fixed the problem, another cycle of negotiations normally would begin until both parties reached an agreement as to what should be done then.

When however an organisation had to be formed to seize a market opportunity, say sail to Egypt to buy cheap silk and then sell it to Syracuse, the agora served to gather support and manpower for the undertaking too. The project announcement would be made at the agora and anyone interested in joining the organisation would shout or approach the man who made the announcement and tell him “Hey, count me in!” or ask “What’s in it for me?”. Organisations were rather formed in an ad hoc basis, consisting of a group of people who had come together for a very specific project and once the project ‘s mission had been accomplished, say the silk from Egypt had been successfully sold in Syracuse to continue with the above example, the temporary company disbanded.

The Demise of the Argonauts

The point is that the agora was more than a place people gathered. It was a process of constantly conversing with others and it was real. Real people met real people and real problems sought real solutions. It was not plain rhetoric and it was not only for the few good men who had an angle on the king, the president, or the CEO and as such were the ones privileged to decide what is best. Looking back to the 20th century, we witness that public places resembling the agora eclipsed, and project – based organisations modelled on the Argonauts from Ancient Greece were deemed inefficient and in the name of progress were replaced with huge vertically-integrated corporate dinosaurs whose mission other than making money for the few good men, was (is) to last forever. Of course, the ‘dinosaurs’ never said they were only looking after the interests of the few good men and that they wanted to be immortal but we should not put the blame on them. After all, social welfare allegedly demanded abundance of products and ‘abundance’ demanded massive production plants and massive production sites demanded economies of scale that only gargantuan in size corporate machines could economically justify and implement. The Argonauts were simply incompetent to handle the production volume and deliver the production output required to boost progress. So, they were obliterated.

Production Equals Progress and the “Dependence Effect”

In textbook economic theory and in the real world as well, the dogma that the higher the level of production output the better it is for society is almost impossible to refute. Nations estimate their well being and competitiveness according to their production output, and higher levels of production seem to offer a panacea to all kinds of social ills: unemployment, economic security and most important of all, a higher level of production results in higher standards of life as more products come out of the factory to satisfy our wants. Put otherwise, the industrialisation that wiped the Argonauts out of the map is both economically and socially grounded. The mission of economics is to maximise production from a given set of finite resources, so every increase is for the best. And as we said, the more products that come out of the factory the more of our wants are satisfied, so the more prosperous we become.

The only problem was how to create a manufacturing system capable of skyrocketing production to until previously unheard of levels. Simple. Henry Ford prescribed a rather simple fix
to the productivity problem: interchangeable workers carrying out repetitive interchangeable tasks leading to interchangeable products. “Maximize efficiency by minimizing difference”. Production was increased all right. In fact, it reached stratospheric heights. What about consumption though? For consumption to catch up with production, the help of advertising was employed. As early as in 1958, J.K. Galbraith wrote that “production only fills a void it has itself created”. He argued that increased production and more products do not necessarily amount for greater social welfare because many of our wants are manufactured by the science of advertising and salesmanship. Had products not been advertised, wants would not have existed. Galbraith dubbed it ‘the Dependence Effect’. But even in 1958, if you asked a businessman how to stimulate consumer demand or raise awareness around a new product, he would adamantly advise to throw some money into advertising. But there were further implications down the road other than convincing people to buy staff they didn’t really need. It was only a matter of time for the avalanche of market transformations that the industrial age brought with on the supply side to catalyse the demand side too. In David Weinberger’s and Doc Searls’s lucid account of “the industrial interruption”, management’s approach to re-invigorating consumption is epitomised in full swing:

"Management wasted little time noticing the parallels in efficiencies they could achieve all along the production-consumption chain. If products and workers were interchangeable, then interchangeable consumers began to look pretty good too. The goal was simple. Customers had to be convinced to desire the same thing, the same Model-T in any color, so long as it’s black. And if workers could be better organized through the repetitive nature of their tasks, so customers were more easily defined by the collective nature of their tastes. Just as management developed a new organizational model to enhance economies of scale in production, it developed the techniques of mass marketing to do the same for consumption. So the customers who once looked you in the eye while hefting your wares in the market were transformed into consumers".

This business equation gave a thoughtful lesson to organisations: workers are all the same and should be treated as such, and consumers are all the same and should be treated as such too. Maximise profits by minimising diversity (Ibid.). The obvious implication stemming from the homogeneous, interchangeable consumers and workforce assumption is that internal and external communications should be mass-driven, interchangeable and provided in a standardised format too. Brilliant examples of such interchangeable, mass-driven, standardised communications are the ‘message’, ‘positioning’, ‘statement of corporate intent’ and the ‘mission statement’. It’s just like giving a political speech to an incredibly large audience but without giving the ability to the audience to ask questions or catapult criticism against you. On the external side of communications, mass marketing and mass media sought to eliminate any diversity employed in the ‘message’. Only one-way conversations with the market were to be tolerated. By delivering the same ‘message’ to as many consumers as possible, organisations hoped that markets would infinitely expand. But never shrink or stagnate.

On the internal side, hierarchy was deemed similarly successful in erecting artificial blocks to prevent potentially harmful conversations from occurring at the first place. Why harmful?Because the danger of challenging power relations lies beneath any real conversation. In order to complement the artificial walls raised by hierarchy, office architecture built real walls separating blue-collar from white-collar workers. Put bluntly, the mob was grouped together and had restrictions imposed on to them as to which ‘floors’ they could go to, while the noble few had their own private space for recollection and decision-making and unlimited access to all ‘floors’. That way, unless the noble few had a mood for chat – which they almost never had – there was little, if any, room for real conversations between blue and white collars.

Somewhere in between, we learnt that we all want the same kind of products and that deviating from the mass is unconceivable, if not rebellious; a kind of attitude observed among juvenile delinquents. It’s just like rock and roll. It’s evil, wrong, corruptive and will certainly disrupt our lives until it can be safely turned into a saleable commodity, a marketable product, a brand image worth paying money for, a mass product tuned in for a mass market in the midst of a mass society melody. We learnt that chaos knocks on the door when we are not satisfied by the stability and conformity that legitimate social and business institutions handsomely provide us with. Besides, the most successful institutions ever and the most long living are the army and the church. And organisations learnt that doing business is just like marching to war.

Even in year 2003, there are still numerous accounts describing the similarities between the army and business organisations and that lots can be learned from the organisation of military operations. Indicatively, a paper that appears at the 2003 January issue of First Monday, entitled Combat Power and Enterprise Competitiveness, draws a parallel between the use and management of information in the army and the deployment of intranets and networks within business organisations. The authors, John S. Quarterman, Ken Harker, and Peter H. Salus, conclude that distribution of corporate information leads to shared awareness and increased business competitiveness, however there is not even a single mention of how power relations and management at organisations will be disturbed as a result of distributing knowledge across departments and zigzagging rigid hierarchies. It is striking that the authors seem to claim that if distributed intelligence works for the army, then it should work for business organisations too.

Even cutting-edge approaches in marketing have a warlike flavour. Neuromarketing which is still at an experimental stage, seeks to delve deeply into the cognitive processes of customers so that more efficient forms of brainwashing are employed in the not so distant future. Most of the research on the controversial science of neuromarketing takes place within academic institutions with financial backing from commercial organisations but it should come as no surprise that no one is willing to disclose which these organisations are. After all it’s war, isn’t it? I came across neuromarketing at an article whose first lines read: ““For people like Cathy Denison [a major proponent and leading researcher in neuromarketing], the marketplace is a jungle to be conquered. For corporations that want to sell us stuff, it's the shopper's mind that's the jungle — a territory to be mapped” (Kelly et al. 2002).

I once read somewhere that the writings of Machiavelli, Sun Tzu and Clausewitz are essential readings at the top business schools’ MBA programmes and are consistently proven to be of immense practical value to their clean cut, dressed to kill graduates. Even Caesar’s ‘Divide and Conquer’ infamous strategy lends credibility to the methodology of market segmentation. In much the same way that ‘Divide and Conquer’ was used in the actual battlefield, we deploy market segmentation techniques to efficiently penetrate the market. The prevailing building block in this twisted, yet established view of business pedagogy is that the marketplace constitutes the battlefield, other companies personify the enemy, and the consumer is the ultimate target of the marketing shotgun. Market domination is the name of the game and marketing is the heavy artillery.

As time went by, market forces prevailed again. In the wake of the possibility that Japanese consumer electronics and car manufacturers could win the business war in the US and Europe, more flexible manufacturing systems substituted the controversial assembly line and more flexible forms of organisation complemented rigid bureaucracies. In the aftermath of harsh international competition, companies learnt to be leaner and more entrepreneurial but nevertheless, the conversations in the marketplace were displaced by press conferences, telemarketing, mail order catalogues and advertising brochures that filled our mailboxes but we almost never bothered to read. The agora had vanished into thin air and its place had been taken over by cunning sales reps popping up everywhere and buzzing our heads with arcane value propositions like “the exit strategy for the convergenced is grand” and catchphrases of the “wanna be a parity or a differentiator?” kind. Not that value proposition sounds friendly or is comprehensible anyway, but we have become used to the mention of it.

The war that organisations had waged over the marketplace did not leave the belly of the beast untouched. It has become commonplace to speak of a conflict culture wreaking havoc on companies at which departmentalised cultures and power relations reign with say, the engineers hating, distrusting and refusing to share information and collaborate with the marketers and vice versa (Davenport & Prusak 1997). It is only a natural outcome of working under extreme pressure to ‘annihilate the enemy’ that relationships among ‘soldiers’ get tainted and strained. In times of war, both internal and external communications are strictly monitored and confined to the bare essentials so that the danger of the messages been intercepted by the enemy is minimised and the possibility of the official hierarchy been subverted is avoided. That’s just the way it is. If you have the information, manage to keep it in the closet and exploit it commercially, you win. If however you let your enemy steal it from you and take it first to market, you lose. If you issue an order, it should be executed, no questions asked. If you though stimulate debate and dialogue rather than firmly commanding and controlling what should be done, then the hierarchy may be challenged and your supremacy be undermined. Both inside and outside the corporate fortress. Under such constraints, conversations are rendered useless and loose talk is regarded as a waste of resources. Decision-making based on hard facts is what matters. For conversations to be legitimate work, they should sound like:

Product manager: “What can you tell me about our new toothpaste?”

Market analyst: “We know that the consumer demographic - market segment of ages 15 to 40 years and income £15k - 30k thinks highly of our new toothpaste because we used state-of-the-art perceptual mapping tools to enhance the efficiency of our market intelligence methods”.

Product manager: “Are those tools you said you used accurate? And what metrics are those tools based on?”

Market analyst: “They have never let us down in the past. They depict how our new product is positioned in the market and perceived by the target group alongside our portfolio consisting of product F, product N and product R represented by axis X and competitor’s A product line represented by axis Y”. “Ah, I almost forgot to mention that we complemented the perceptual mapping findings and cross-correlated them with a sales extrapolation based on a collection of market trends from the last five years”.

Product manager: “So, what do you reckon we should do next?” “And where will we be in a year’s time from now?”

VP of Marketing engaged in the conversation: “We should increase our ‘power of voice’ in the BBC by 40% and fill the High Street with these posters that my department has already prepared”. “Well, I feel that we will have conquered 1/3 of the market within the next year provided we withdraw our products F and N from the market so that they do not cannibalise our new product and that the additional marketing resources I previously referred to are allocated to the new product’s promotional strategy”. “But again, my expectations are based upon this market intelligence report that the market analyst put together”.

This is perfectly acceptable as a fruitful conversation. What is not acceptable as a fruitful conversation sounds like:

Ben taking his cappuccino from the vending machine: “James, what do you think of this new toothpaste of ours?”

James (market analyst in the above conversation and now taking a chocolate bar from the vending machine): “Nothing special man. But when was the last time we made something special anyway?” “It’s just like any other toothpaste we ‘ve made in the last five years, nothing less, nothing more”.

Ben: “Mary told me that you were also in that briefing with the big boys. How did this one go?”

James: “Not bad at all. At least it started well all right. I was explaining our research until this marketing jerk - you know the fat ugly guy who’s always in black- started shouting. He’s not well in the head you know. If he could, he would have bought the entire BBC to run ads all day non-stop. In fact, if he could, he would actually buy the whole city, to fill it with his obnoxious posters. Oh, god! Have you seen ‘em? They look nasty”.

Ben: “Nope. I haven’t. Mary though said something like these ads make her wanna puke. But at the end of the day, they say that brainwashing consumers works, you know?”

James: “I bet”.

Ben: “So, what did you tell ‘em anyway?”

James: “I told ’em that consumers will like the toothpaste”.

Ben: “How come you know that?”

James: “I thought hey, they’ve bought all the toothpastes we ‘ve thrown at the shelves in the past, so why not buy this one too?” “I told you Benny, this one is much like the others. And we ’re not talking about operating systems here. It’s just toothpaste. And people ‘ve gone mental with their mouth hygiene these days, ya know. They’ve become really careful when it comes to their teeth. I bet they’ll buy it. We’ve got a reputation in the market, that’s gonna come handy”.

Ben: “So, what happens if they don’t buy it?”

James: “Look, I simply told ‘em that the research shows they’ll like it. If they don’t, that ‘s other people’s problem. Not mine. Unless the fat guy’s boys screw it up with these horrible ads, the toothpaste will be OK. No one will blame me for their own incompetence”.

Product manager: “Hey you over there! It’s time you got some work done, you lazy! You’re paid to work and not to fool around. Go back to your offices now! Break’s over!”

After a year, it is obvious that the new toothpaste has not been well received by consumers. It has given quite a blow to the corporate image and the toothpaste’s marketing budget has swallowed so much money that even the CEO is furious. There’s been talk around the company that there will be quite a few jobs hatched and as a result, the air in the company smells of hostility, fear and agony. The CEO calls the VP of Marketing, the Product Manager and a few other big boys at this office. Let’s imagine how it goes:

CEO: “Why we lost so much money? And why didn’t we make any money? How’s that possible, can you tell me, ha? The product was supposed to be a

success, wasn’t it? And on top of everything, we also took two of our products out of the shelves…so much money is lost every day. I am accountable to the shareholders and the shareholders ask me why? Why? You do understand that the situation is pretty serious and I won’t tolerate any BS here, you hear me?” What went wrong Samuel?

Samuel aka the Product Manager: With all the respect sir, I did everything I could for the toothpaste. I gave it my soul and body. And the product had the full attention of my people at all times. My guess as to what went wrong is that every once in a while consumers change their minds about what they like. And this is probably the effect of our competitors’ ads. They’ve bought so much prime time on TV and their ads are targeting the female segment. There is even this cute actress in the commercial, and her popularity has risen tenfold during the last year, some guy working in the show-biz told me. And I guess that lots of women do the family’s weekly shopping these days.

CEO: So what you’re telling me right now is that we didn’t do any ads for women and that’s why we made a fool of ourselves? Get a grip, Samuel! Our sales have plummeted! And what about men? Did they stop buying toothpastes all of a sudden?

Samuel aka the Product Manager: I ‘m not sure about men. But I’m 100% positive that our competitors’ promotional strategy was more effective than ours. And this is the marketing department’s job.

VP of Marketing: “There is no such evidence which shows that women do the family’s weekly shopping and latest surveys prove that our ads are as effective as ever. In my opinion sir, the marketing department did everything within its power to make sure that the product re-inforces our positioning as a market leader. We even pioneered customer loyalty programmes this year and managed to cut some great deals. The only thing that comes to my mind as being responsible for this is the market intelligence report. Obviously, consumers never wanted this product. Otherwise, they would have bought it. I’m telling you, the mistake is in the market analysis. Where is this guy who told us that consumers would buy the product? We should give him an earful, that’s gonna teach him a lesson. With all the respect sir, if I were in your shoes, I would fire him!”

It is hard to make any sense of the above. That’s not the issue here. Organisations are missing the point. By not caring to listen to what the market (that is their customers) has to say since their favourite industrial age equation dictates that economies of scale in production should equal economies of scale in consumption, they intentionally decide to ignore what everyone around has to say. Or offer. Whether inside or outside of the corporate fortress. As anyone who ever took a marketing course knows, there are external customers (the ones outside the fortress) and internal customers (inside the fortress). The market is not only out there. It also breathes deep inside the company. And the external market is not something that stops where the internal market begins. The two markets theory is mistaken. There is only one market. And if you want the market to respect and trust you, you ‘d better respect it and trust it too. The practical implication is that by dismissing your internal market as mere fiction - as a modern wit of marketing theory that ought to be put back into its place by a proper amount of hierarchy - you ensure that any bonds you may have with the external market will be broken. In the above conversation, and I mean the first legitimate one, all we make out of it is a bunch of hype bundled with fictional assumptions burst out of the mouth of corporate zealots who remorselessly take their arrogance and ignorance as a symbolic manifestation of status and knowledge. Ignorance because they discard customers as brainless consumers who are incapable of making any choices on their own, and arrogance because they dismiss their fellow workers as brain damaged corporate cogs that they can easily trick into believing that Japan is in Europe, provided they know all the catchy marketing buzzwords and deploy all these flashy powerpoints that make you go epileptic after two minutes in a dark room. Customers are not brainless and they do not want you to treat them as if they are. And people in organisations are not brain damaged. But they won’t jeopardise their salary by telling you what hierarchy compels them not to say.

The only conversation from the above that can be said to have a portion of truth and substance is the second at the vending machine. It’s the only conversation which tells us what two employees think of the new ads. They think it couldn’t be any worse. Naturally, the CEO, the product manager and anyone else who’s having legitimate authority to make decisions has never heard of it. And frankly, why should they? They never asked for their subordinates’ view of the world. They surely never asked their customers’ opinion. And most importantly, they never delegated any authority to them to make decisions. If you don’t trust people to make decisions, then why should they trust you? If you don’t motivate people to take their job seriously, why should they? And if you don’t empower them, you can’t expect them to be accountable for not telling you what they think.

Niches and Relationships

It was not long before a decline in the ideas of mass society and mass market was imminent. People no longer wanted to be identified as part of the mass and since the products we consume are always been seen as a trait of our personality, in effect defining our social identity and status (you are what you consume), consumers no longer wanted to be buying what everyone else bought. They started crying out for more choices and more choices they got. In the 80s and 90s, the agenda for business, politics and culture was all about expanding choice. The choices indeed proliferated. Instead of having to choose only between Italian and Chinese restaurants for a night out, Thai, Mandarin, Greek, Turkish, Mexican, French and Indian restaurants came to the rescue of our gastronomic appetite. That’s what niche marketing really is: different adaptations of the same product delivered to different adaptations of the same market.

Around the same time, relationship marketing (RM) was starting to get remarkable attention. Its central thesis, as I understand it, is that by reviving the conversations in the market and starting to talk to customers, immense gains will be appropriated as the result of increased organisational responsiveness to market needs. Relationship marketing, at least in its core, was all about being close to your customers and conversing with them. For example, a restaurant owner who’s always close to his customers, asking them about what they like and what they don’t, and making decisions based on his customers’ feedback, is mastering the art of relationship marketing (Gummesson 2001). Similar examples abound in RM textbooks and discussions. Thus, it was reckoned that RM suited service – based organisations and industries rather than product-based ones. The irony is that marketers always boast that what matters is the relationship and that key to success is the cultivation of a marketer-customer relationship, but they never seem to really take it to its word. Then the Net with its revolutionary potential to provide a platform onto which interactive, highly personalised marketing communications could be realised and economically justified even in mass markets promised to change everything.

Electronic Dreams

By the mid 1990s, no matter whether you looked in the online or offline world, mass customisation and niche marketing had become the new corporate mantra. Mass customisation was the new frontier in business competition (Pine 1993) and one-to-one marketing was the key towards competitive advantage (Peppers & Rogers 1997). Hagel and Armstrong saw the emergence of ‘market segments of one’ in cyberspace (Hagel & Armstrong 1997) and Don Tapscott evangelised ‘mass customisation on the Net’ (Tapscott 1996: 92).

The U-turn from mass to niche marketing propelled a series of management transformations. Had it not been for niche marketing, many organisations might have never considered evaluating the profitability of customers at an individual level. Marketing revolutionaries Peppers and Rogers (1997) postulated that if loyal customers generate the majority of profit and the process of attracting potential customers and converting them to actual ones constitutes a great financial burden - which is true given that advertising costs represent(ed) the greatest expense in any marketing plan - then marketing's role should shift from customer acquisition to customer retention. By creating an interactive relationship and constantly motivating the consumer to give more information, the marketer can offer more products to satisfy increasingly more of the customer’s needs, argued Peppers and Rogers (1997).

This value proposition did not go unnoticed through corporate radars. Corporations no longer had to invest in attacking new markets and obsessively trying to proselytise new customers. No more risk. Limitless growth and expansion could now be achieved by focusing on your loyal customers.

It really caught on: loyal customers cost less to retain, are receptive to what the company has to say or sell and they are the best marketers a company can have since ‘word-of-mouth is the most effective marketing of all’. What customers ask for in return is a ‘relationship’, which on the marketing side, means 'personalisation'. And this was what relationship marketing aimed at. The so acclaimed during the dot.com hysteria [1], e-CRM, was the e-version of Relationship Marketing.

E – CRM means one of two separate things or both. “One meaning is the use of Web technology to achieve CRM objectives, for example, the sharing of customer information across the company. The other meaning is the extension of CRM to customer interactions taking place over the Internet” (Classe 2001: 44). Theoretically speaking, e-CRM means using the Internet to better serve the customers by getting to know more things about them. In practice though, e-CRM referred to two distinctively different things. One was capturing as much as possible personal customer information by tracking and monitoring every single user ‘click’. Long forms to fill in, data mining techniques, cookies, and prying software that came to be known as e- CRM software was deployed to track how people get to the website, why and when they leave and where they go next. The other was replying to customer enquiries via email. No matter how simple this may sound, there are plenty of corporations struggling to respond ‘in a personalised’ - or simply humane - manner to customer enquiries via email.

A Hitchhiker’s Guide to Adidas ‘s E - Commerce Galaxy

I have nothing against the idea of marketer-customer relationships on the Net and it’s hightime that customers had their voices heard. Unfortunately, organisations forgot how to speak and listen. Someone I know once sent an email to Adidas. His problem was that he couldn’t find any Adidas (Stan Smith model) sneakers on colours other than white. He had gone to all the athletic shops nearby to where he lives (in the North East of England) but to no avail. No matter how many shops he went to, the only colour available was white. But he was a loyal customer: he never bought any sneakers other than the particular Adidas sneakers. Net-savvy as he is, he decided to check the Adidas.co.uk website. He eventually got to the below page:

Figure 1: Stan Smith: How can I select another colour?

The shoes shown in the page were white but there was a box at the top on the right of the page which indicated that other colours were also available. My friend tried to select another colour but in vain. He thought that it was probably a technical problem with the website and decided to get in touch with Adidas. By further navigating the Adidas website, he quickly got to the bellow page:

Figure 2: Hmm…, let’s see how we can contact Adidas

He checked the FAQ section and did not come across anything that answered his question. He then checked the ‘Contact Information’ section which provided a Fax number, a phone number and an address. He gave it a quick thought and decided that an email would be less intrusive and more appropriate for such an inquiry. Making it easy for him, the website offered the below form to fill in:

Figure 3: The Adidas Website E-mail form

So, he dropped a line to Adidas.

He wrote:

A few days later, an email from Adidas hit his inbox. What they replied to his inquiry read:

Despite being a native Englishman, my friend could not figure out what “colourway” really means. Or why the verb “range” was used in the email. After ‘doing some research’, he reached the conclusion that they took him for a retailer, or wholesaler, or anyway some business trying to get Stan Smith trainers in white since “colourway” is a word frequently brought up during ‘business talk’. The fact that he might have been an ordinary folk wanting to buy a pair of shoes completely evaded them. Then again, his email read that he had a pair of Adidas in blue but they were now worn out. No business would have said that. But organisations have not only forgotten how to speak; they have also forgotten how to listen.

Afraid of Conversations

But it’s not simply that organisations have forgotten how to speak and listen to their customers. They are afraid of doing so. They are petrified of letting go.Third Voice was a web browser plug-in that enabled people to write comments onto web pages, actually a sort of ‘posting sticky notes’ without though making any changes to the target sites. For other people to see the notes, they needed to have the Third Voice software installed into their computers and they could ‘turn it off’ whenever they got tired of looking at the notes. If the Third Voice plug-in was not installed, there were no changes in the way the ‘annotated’ websites looked like. One would expect that companies would welcome such a technology, as it would ensure that customers have a pretty easy way to tell the organisation what they think and also let other people know about it.

For example, my friend who had struggled to buy a pair of blue Adidas, could have posted a note at the page featuring the white shoes saying “It’s no good trying to choose another colour. Nothing’s gonna happen. Don’t know if that’s because of a technical or design problem with the website or because the Adidas people wanna make us think that they have other colours than white”. The note he would stick at the email form Adidas provides would probably read like: “Don’t waste your time fellas. They didn’t even bother to read my email. I simply asked them where I could find a blue pair of Stan Smith because the ones I have are now worn out and they came back to me with some nonsense, probably thinking I was a retailer. Perhaps, it ’d be a better idea to give ‘em a call instead”. If you ask me, the above would be excellent feedback on the usability of the website and should be considered to be invaluable input with regard to the way Adidas handles customer inquiries. Not only companies should be receptive to such criticism, they should encourage it. In such a way, the Adidas website developers would have had an incredibly larger group of website testers to help them with than they would have ever imagined, and this would inevitably result in a much more usable and reliable website from the users’ point of view. What is more important is that all this help would be for free. It wouldn’t cost Adidas a single penny whereas the typical website testing process if assigned to a web development/engineering consultant or any other human-computer interaction specialist would definitely amount to a considerable cost. In a similar vein, the Adidas management team would be made aware of shortcomings in the way they deal with customer inquiries and would sought not to repeat the same mistakes or face the music.

Third Voice went under in April 2001 and its Web site, http://www.thirdvoice.com/, is defunct as of 2002-11-30. Although the corporate outrage managed to shut Third Voice down, the website of the "Say NO to Third Voice" campaign is as alive as ever: http://www.worldzone.net/internet/pixelsnttv/. Organisations loathed Third Voice and dreaded the possibility that some customers might see negative comments posted by other customers. If companies think they will avoid such criticism by choosing not to listen to what their customers have to say or mute them by blocking technologies like Third Voice, well…they are wrong. People talk to each other. The ‘Adidas guy’ has told his story to more than 500 people to this day and this is a very modest estimate. He happens to be the best lecturer in E-Commerce I ever had the chance of getting to know and his tutorial on e-CRM is premised on this very same story. Last year only, I reckon he told the story to more than 400 of graduate students. And I bet he has also told his friends, relatives and co-workers. That is offline conversations. God knows how many mailing lists he’s a member of and how many email buddies he’s got [2].

It’s obvious that most companies are bewildered by the ever perplexing web of conversations that the network of networks is actually made of. On the one hand, they are not willing to abandon their mass-driven, one-way approach to the market and engage into real conversations. There is no need to do so: bombarding customers with marketing messages works fine (that’s what they think anyway) and lobotomising employees with the hierarchy axe so that they are unable to have their own mind also works. On the other hand, there is the Net which envisages an ideal infrastructure for circulating ideas and indulging into conversations. This is the great tension that management currently strives for reconciling: how to make use of the Net without deviating from established best practices, how to network without becoming really networked, how to connect without being connected.

Is this really the New Marketing Era?

Paul Postma’s The New Marketing Era does a fine job in highlighting this agony, without having any intention of explicitly doing so though. Postma shares his contemporaries’ superficial zeal that “information and media are transforming the marketing environment and that relations make the world go round”. He has also jumped on the e-marketing bandwagon according to which “mass marketing in consumer markets can be complemented, and sometimes replaced, by one-to-one marketing”. In short, Postma’s main thesis is that it is now “possible to establish a personal relationship with customers in mass consumer markets in a way that was previously impossible on any significant scale” by listening to what the market has to say. No more top-down monologues, says Postma, where the company calls out to the market. Now, the company listens to what customers say and reacts by providing them with the products and services they have asked for.

In the first half of his book, Postma prophesises that conversations between customers and marketers will eventually override one-way marketing communications and he centres his arguments on the proliferation of technological innovations that render old assumptions obsolete. Moving on to the second half of the book though, Postma focuses almost exclusively on marketing databases. Databases are the key to sustainable competitive advantage in the new marketing era, says Postma, and urges marketers worldwide to develop a new attitude towards databases: “We should dare to listen to the database instead of talking to it”. By that, Postma means that widely used demographics, especially when based on managers’ assumptions of the market rather than the criteria used by actual customers, will inevitably result in wrong decisions. But nevertheless, what Postma proposes boils down to filling the database with as much customer information as possible and then segmenting this information into commercially focused groups. Apparently, the lion’s share of database marketing efforts never results into one-to-one customer – marketer relationships since some form of segmentation, clustering or grouping is always sought. Although the book includes some excellent advice on direct marketing and thought-provoking examples of how customers respond emotionally to ads, there is no other insight to be found there. In all, Postma’s starting point is that conversing with the market is the way forward but then, somehow disappointingly I should admit, he goes on to convince the reader that conversing with databases is what market conversations are all about. My question is why should a database intervene between a marketer and a customer? And frankly, I don’t really get it: how you can carry on a conversation with a database? This is the real chasm that organisations hesitate to cross: moving from what sustains the institutional rigidity - the one way monologue with the market – to what the market really is – a dialogue, a story, a tale told with a human voice.

But now for the first time in history, the agora might come back. Weblogs promise to change all that. They promise to bring the conversations back to the marketplace. If you keep your ears open, you can hear the murmur getting louder and louder and louder…until power shifts to where knowledge resides.

Enter the Weblog

Bloggers are turning the hunting and gathering, sampling and critiquing the rest of us do online into an extreme sport. We surf the Web; these guys snowboard it. Bloggers are the minutemen of the digital revolution (Henry Jenkins 2002).

It’s quite hard to accurately describe what a weblog really is. Or what people mean when they say they are blogging. One could easily conclude that a weblog is a technology, or a social process culminating in an online phenomenon or even an online kind of a diary, if not to say a new form of journalism. The term is as broadly defined as peer-to-peer, to say the least. In fact, a weblog can be all of the above and none of it. Some people blog for fun, some for business and others for god knows why. Just like any other technology, if we could say that it is a technology, a weblog rests upon the people who adopt it to find a purposeful application for it. Technology shapes people, but people also shape the path upon which technology evolves. What matters is not technology but the use technology will be put into when in the hands of people. The same goes for any social process. Democracy differs enormously from place to place, say from ancient Athens to contemporary Athens. If you think that the above does not make any sense, you’ll be further puzzled down the road. If you ask me what a weblog is, I would say that a weblog is a personal website but not static and unchanging like the websites we’re used to (best examples of which are 99.99 percent of corporate websites), but it can also be a group website where people brainstorm, rant and ramble about whatever is on their mind without paying much attention to typos and consistency in style. A weblog can be updated and change frequently, sometimes many times within a single day, but this of course rests upon how lazy or energetic and passionate the blogger is (or bloggers are). To add further confusion to the above, a weblog can be highly interactive in the sense that random people can play an active part in the ongoing discussion by commenting on what’s already written on the weblog or they can even start an off-the-topic discussion, provided the weblog’s infrastructure allows for such things. On the other hand, a weblog can be a very solitary textual account of one’s feelings and thoughts, a written manifestation of a person’s vanity when an ego trip has taken over and does not allow any space for interactivity with the outer world.

According to the book which tracks the evolution of my favourite weblog from a student’s website to a weblog jointly written and maintained by as many as 30,000 people,

a weblog can be anything from a journal to a stream of consciousness commentary or even a full-blown news site. The important features are a steady stream of fresh content and a willingness to link to other existing sites as a raison d'être. Think of the Captain’s log on Star Trek and how it usually served to introduce and frame the upcoming story, and add in a very quick feedback loop. For the most part, weblogs are simple and straightforward. People can publish their thoughts, even for the first time, with almost no training (Chromatic et al. 2002).

A weblog can be a story or just a pointer to a story worth reading and telling others, a conversation or something like an online post-it note with some commentary attached, a professional journalist’s terrain or an amateur writer’s playground, a company’s official online presence or a disgruntled ex-employee’s angry outburst. A weblog is what we make it to be. But first, let me tell you a little about bookselling.

Collaborative Filtering: one of the same or marketing from the market’s perspective?

“Weblogs and collaborative filtering make traditional marketing look stupid. Marketing for 100 years or so has consisted of the beaming of messages to demographic segments. Now marketing means me and my web buddies make fun of the messages being beamed to us. I can find out in 0.87 seconds whether Maytag washers are really more reliable. Further, the last person I want to talk to about Maytag washers is Maytag, Inc. because I know they'll just lie to me” (Interview with David Weinberger).

In a thorough study of the leading e-tailer, Sandeep Krishnamurthy (2002) chronicles Amazon’s business evolution and attributes its success as a bookseller to a wide spectrum of factors, most important of which being that Amazon turns its inventory faster than bricks-and-mortars, has reduced the book return rates, passes on cost savings in the form of cost reductions to consumers and enables unknown authors - ‘outsiders’ – to reach a global audience. But most crucial above all, in Krishnamurthy’s view, is Amazon’s vision: to become Earth’s most customer-centric company and biggest store; essentially a “platform on which you can do a lot of things” as Amazon.com’s founder, Jeff Bezos puts it (Hof 2000).

Amazon has not revolutionalised the bookselling industry because it offers such a vast collection of books, many of which are cheaper than at high-street bookstores. Neither because it has laid the ground for cross-selling opportunities by deploying highly sophisticated CRM technologies which track and record every single customer click. What is so special about Amazon.com is that it invites readers to send reviews of books and to rate them on a five-star scale along with a commentary expressing their thoughts and opinions on the book. Authors have the right to reply and other reviewers can comment on how useful the review was to them but they cannot change the review.

This process or technology – called collaborative filtering, weblogs or social navigation - has drawn quite some attention [3]. “Among marketers, the hope is that such computerized recommendations will increase demand...It means that people might read more, or listen to music more, or watch videos more, because of the availability of an accurate and dependable and reliable method for them to learn about things that they might like” (Gladwell 1999) former Microsoft executive and co-founder of Net Perceptions, a firm specialising in collaborative filtering, Steven Snyder says. According to Net Perceptions’ website, “This is an example of where technology really is helping us provide better service and sell more — and that is the name of the game”. And e-commerce specialists Fingar, Kumar and Sharma (1999) claim that “collaborative filtering is at the heart of one-to-one personalisation and community building...the technology can be used to collect ratings about items available in an I-Market…Once an I-Market has collected a critical mass of ratings, it can respond to customer enquiries with recommendations that are tuned to customers’ preference patterns. Customer-driven collaborations and buying patterns tracked by collaborative filtering facilities can also be used to achieve advertising precision never before possible – the ultimate tool for up – selling and cross-selling”.

While Fingar, Kumar and Sharma (1999) regard ‘collaborative filtering’ as a community building and personalisation tool that aims at seizing cross-selling and up-selling opportunities, Malcolm Gladwell (1999) is far more radical. He believes that ‘collaborative filtering’ gives the chance to under supported (in terms of traditional marketing promotion) ‘outsiders’ to beat the ‘blockbuster’. It gives the opportunity to the ‘no-brand-name’ to outperform the established brand. Gladwell (1999) explains that collaborative filtering…

…works as a kind of doppelgänger search engine. All of us have had the experience of meeting people and discovering that they appear to have the very same tastes we do—that they really love the same obscure foreign films that we love, or that they are fans of the same little-known novelist whom we are obsessed with. If you and your doppelgänger love the same ten books, chances are you'll also like the eleventh book he likes. Collaborative filtering is simply a system that sifts through the opinions and preferences of thousands of people and systematically finds your doppelgänger--and then tells you what your doppelgänger's eleventh favorite book is.

Chris Locke is sure that collaborative filtering is neither just a “sophisticated version of “Would you like fries with that?” [nor a technology which simply] automates cross-selling and up- selling opportunities” (Locke 2001: 113). As he says, the view looks radically different from a high vantage point. “Collaborative filtering works bottom-up by feeling out the edges of emergent micromarkets based on personal tastes and interests, in effect defining potential online communities” (Ibid). Locke reminds us that the ideal form of marketing is world-of-mouth or ‘markets are conversations’ and all these kids that rush to the Harry Potter dedicated pages at Amazon.com do not see ‘collaborative filtering’; they see ‘conversations’ among people sharing the same interest: Harry Potter. So, “They are beginning to talk to one another. They understand. No one had to explain it to them” (Ibid:109). So, “what’s the commercial benefit?” The fact that the forthcoming but yet unpublished Harry Potter book is from now amazon’s number one bestseller should be indicative of these conversations’ commercial value.

Figure 4: Customer Reviews of Harry Potter at Amazon.co.uk

Locke contends that “Amazon.com’s real innovation was to create a marketplace where customers, not advertisers and marketers, could access the value of products…the really interesting marketing action is not how this information is being used to pitch products – “would you like War and Peace with that?” – but in how it’s being used to hook people up and get them talking with each other. “Hey, I just read War and Peace, and man, I gotta tell ya, this Tolstoy dude rulez!”” (Ibid:114). And Amazon.com does whatever possible to enrich its relational space through member pages, wish lists, purchase circles and discussion boards; essentially encouraging online communities to coalesce around topics of interest, such as books, movies and music.

Still not convinced? A friend recently told me that he’s never paid much attention to customer reviews at amazon since he reckons it’s all fake (however I always do) so I owe to provide him with another story: the story of Andrew Sullivan’s “Unfit to Print” Weblog. Andrew Sullivan, former editor of New Republic, is a blogger. And his blog has an online following well exceeding 500,000 people. So what Andrew Sullivan does in order to stimulate some discussion between him and his readers is to choose a book every month and encourage his readers to discuss it with him throughout the month by means of posting notes and opinions, raising objections, asking questions, recording their musings and reflections at his Book Club which is a category under his weblog. Apparently, the Book Club is not only a category of Sullivan’s Weblog but a rather vibrant community as within days from founding the book club, his first book-to-be-discussed, Robert D. Kaplan's Warrior Politics, skyrocketed up the Amazon charts into the top five. And the last selection of the Book Club, Christopher Hitchens' Why Orwell Matters, went in a few hours from 1074 to number 3.

Figure 5: Andrew Sullivan’s Weblog Book Club discussing Kaplan’s Warrior Politics

My friend can rest assured that none of Sullivan’s readers are being paid for contributing reviews, they’re just in it for the fun of blogging along with others. For the fun of discussing a book those others too have read. Intelligently, Sullivan came up with a way to make some money out of these book discussions: for every book that’s discussed at his weblog’s Book Club, there’s a link to the Amazon’s online bookshelf and Sullivan gets a 15% percent on sales if you buy the book by following the link to Amazon from his weblog.

Figure 6: Links to Amazon from Andrew Sullivan’s Book Club

One might counter that what Sullivan’s Book Club does is nothing new as it is just an example of a prominent opinion leader and that’s what opinion leaders do: influencing the masses into making certain decisions or buying certain products. Of course, this is a top-down process of ‘marketing coercion’, from the opinion leader to the masses. I would certainly agree with the assertion that Andrew Sullivan is an opinion leader. But I firmly believe that it’s the power, the passion and the energy embedded in his weblog that boosted the sales of Kaplan’s book rather than the compulsive opinion of a single man. Had not been for the weblog, all Sullivan could have done, as an opinion leader, is to suggest a book for others to buy. That’s not what he does though. What he does is to invite others to join the conversation and I am sure that his readers do not see an opinion leader but someone who’s keen on having a chat with them.

So, you may now think that weblogs work for ‘pushing’ and boosting the sales of books, records, films and other products which Malcolm Gladwell calls “taste products”, but that need not mean that weblogs will also work for companies other than those in the bookselling or music business. OK then, you’re not selling books or CDs or videos. Let’s start from betting your company on a weblog.

Gizmodo and blogging-for-profit

Somewhere in the fascinating world of weblogs, a flaming conversation has begun: is blogging-for-profit viable and where does its potential lie? A new weblog about tech gadgets called Gizmodo appeared on the blog-for-profit horizon in August 2002 and its founder, Nick Denton claims that revenue will flow in from affiliate referrals to Amazon's electronics store in much the same way that Andrew Sullivan is making money from affiliate referrals to Amazon’s virtual bookstore [4].

Figure 7: The Gizmodo Weblog

At his personal weblog, Nick Denton explains the rationale behind this new venture:

I have no idea how much Gizmodo can bring in revenues. All I know is that weblogs are a compelling form, gadget addicts are all online, and Amazon.com's API makes it easy to connect product with content. Most importantly, this is a low-risk commercial experiment. Most media companies suffer from overblown editorial, an ad sales force with padded expense accounts, and overly complex publishing systems with a team of primadonna sysadmins to maintain it. By contrast, Gizmodo will be a couple of hours a day of Pete's link- picking skills, some automatically generated Amazon.com links, and $150-worth of Movable Type. Media has never before been this lean (http://www.nickdenton.org/archives/2002_08.html).

It’ not surprising to see why statements and ventures such as the above trigger a plethora of reactions by bloggers and non-bloggers alike. At the first place, it sparks the good old discussion about blogging for money. This discussion usually revolves around two main tenets: first, some believe that only professional bloggers are well suited to do the job (and be paid for doing it) and thus, companies willing to pursue a ‘blog strategy’ should put one professional blogger into their payroll and assign him to cover all aspects relevant to their business as a full-time job. This is the professional blogger business model that Meg Hourihan (2002) suggests.

Others rely their hopes on donations by readers and advertising revenue. However, for such a model to be sustainable, numbers and eyeballs matter more than anything else and there are not many Andrew Sullivans out there purportedly making $6,000 per month through donations. Even Andrew Sullivan (2002) claims that there is no one-size-fits-all business model, if there is any, and that he blogs for reasons other than making money. He recognises the potential pay-off in terms of promoting one’s work to an audience quite bigger than otherwise within one’s offline reach and that one’s career prospects may be enhanced but nonetheless no one has yet offered him any money to blog. This is the case for indirect methods of revenue into which the affiliate model that Gizmodo relies upon has also come to be included.

Clay Skirky (2002) has put forward a lucid explanation as to why blogging-for-money is not tangible:

A lot of people in the weblog world are asking "How can we make money doing this?" The answer is that most of us can't. Weblogs are not a new kind of publishing that requires a new system of financial reward. Instead, weblogs mark a radical break. They are such an efficient tool for distributing the written word that they make publishing a financially worthless activity. It's intuitively appealing to believe that by making the connection between writer and reader more direct, weblogs will improve the environment for direct payments as well, but the opposite is true. By removing the barriers to publishing, weblogs ensure that the few people who earn anything from their weblogs will make their money indirectly.

Shirky agrees with Sullivan that only indirect methods for revenue are feasible and that blogging “is mass amateurization, and it points to a world where participating in the conversation is its own reward”. Even so, Gizmodo’s affiliate model is such an indirect business model and thus, is subject to several factors that will ultimately decide upon its fate.

Not to forget, Gizmodo has near zero costs. As a blogger noted: “sure it's got a chance to be profitable. Eventually, with affiliate revenue, (maybe) some ad or sponsorship revenue and near zero costs, it will probably eke out a profit someday. Nothing wrong with profit....”.

Dave Winner responded that the odds of making a profit are slim since hordes of people interested in tech gadgets will exhibit more or less the same behaviour: they will blog and most importantly, they will blog for free. So he’d rather ‘google’ when he’s on the lookout for a new gadget rather than go directly to Gizmodo. Of course, if Gizmodo’s reviews showed up on Google, then he might pop to Gizmodo’s blog. In a follow-up to the same discussion, he pointed out that the CEOs of gadget companies will be blogging in the years to come and that’s the most direct business model for weblogs. Anything else is doomed to fail simply because of all those bloggers out there blogging for free, blogging for the mere fun of doing so.

From there on, the discussion snowballed into myriads of other directions. A blogger called Jenny Berger voiced the opinion that “Asking why blogging should be profitable is about as productive as asking why shouldn't it be profitable. Have we not yet figured out that on the Web, there is no "should," only "can?”

Another blogger, Rick Bruner (2002), pointed out that it’s very hard if not actually impossible for this Gizmodo-like model to be economically sustainable unless you have massive traffic.

Although all previous comments have their own merit, the most constructive comment was concerned with the power of engaging the market in a real conversation and that commercial value stems from a real voice unhindered from bureaucratic constraints and standardised corporate PR formats:

It [Gizmodo] looks like a great source of information, and it serves that purpose well. But most of the popular weblogs I read have other aspects that make them more compelling. Things like the personality of the editor(s) behind the weblog. Gizmodo, in its current state is pretty "dry." There's no personality or character there at all, just info. Weblogs should have opinions. Weblogs should have character. Tie it all up together with good information, and you've got a site people will come back to again and again.

So, it’s a matter of whether you speak with a real voice or not. Expanding on the previous comment, another blogger commented that “if enough readers make a "connection" with Gizmodo, if they hear something unique in the voice of the site editors, if they learn to trust the instincts of writers, they'll keep coming back”. That’s the point. Even Dave Winner who had previously positioned himself as a non-believer agreed that if weblogs have a true voice, they also have a chance of succeeding.

The search for community and profit: Slashdot and OpenFlows

Slashdot is perhaps the most vibrant weblog community. On any given day, the Slashdot weblog, entitled News for Nerds, Stuff that Matters, hosts a dozen or so of incredibly lively discussions bonded together by an underlying interest in how technology shapes society, business and politics and vice versa. Housing the virtual discussions of scores of IT professionals, computer science students, open source supporters, and technology enthusiasts, Slashdot has scaled from a one-man-show to a global community unlike any other.

One would logically suspect that for a website to serve over a million of page requests a day (OSDN 2001) and offer an endless flow of news items with accompanying discussions among thousands of people, a legion of system administrators would be required. And it is. Myriads of people voluntarily submit stories to the Slashdot system which with the help of a select few ‘lead-gatekeepers’, who actually constitute the first level of moderation, filters through the sea of submissions and decides which stories will make it to the weblog for discussion among the community. But moderation is not the issue here. In a business world where numbers matter, the sheer volume of community members – calling themselves slashdotters – would normally be expected to be more than sufficient to pay the bills. Slashdot sells a wide spectrum of stuff that nerds are intrinsically interested in. Illuminated keyboards for nocturnal types, cups featuring geek friendly logos, fancy gadgets, sci-fi books, DVDs, CDs and then some are on sale. Plenty of slashdotters are also submitting reviews of books they’ve read along with links that take you straight to bookshops. They also sell space to advertisers who are more than keen to have their banner ad on the top of such a bursting with traffic weblog. But in the end it seems that affiliate marketing, banner ads and all those products fail to provide a sustainable revenue stream. Not enough to keep Slashdot afloat anyway. To supplement its revenue or actually to survive, Slashdot relies on corporate underwriting by the Open Source Development Network (OSDN), a network of web resources catering for the needs of open source developers and owned by VA Software Corporation, whose revenue model in turn is based on selling hardware tuned in for running open source software.

From the viewpoint of a marketer, Slashdot represents an unsolved enigma. Any marketer would pride on the economic invulnerability of a website whose online following and subscriber base equals that of powerful mass media. Any marketer would dream of masterminding a web venture whose main product and organisational process is turning conversations into marketable content. Why then, given the admittedly well-balanced portfolio of revenue streams, does Slashdot have to depend on corporate underwriting instead of sailing off on its own? And if Slashdot, which has garnered a huge community that continuously contributes to the ongoing conversations in the absence of any direct financial incentives, is in absolute need of corporate underwriting, what should one expect from more mediocre undertakings? Is blogging-for-proft, in other words, doomed from the outset? Or to dig a bit deeper isn’t the online community a valuable addition to e-commerce ventures as so many publications and consultants seem to suggest?

For one thing, subscriptions and tip jar donations are not likely to work because volunteers provide the content that makes slashdot what it is. How could anyone ask the slashdotters to pay for access to what themselves provide for free? The same goes for donations. They could, however, insist that slashdotters pay for the privilege of using the community space that the slashdot weblog infrastructure essentially is. I had once rented a huge deserted garage space in the outskirts of Athens to have a party with my friends. I had no objection to paying some money in order to use that space so why not do the same with slashdot? Oops. I forgot that anyone could start a weblog at no cost outside of the time required to set it up. And given that most of the slashdotters are computer-literate, that is not likely to be much of a hassle. I also forgot to mention that the underlying source code that powers the Slashdot weblog –called Slash [5]- is free software. That means that anyone could set up their own version of Slashdot by using Slash. And with some minor tweaking, one could easily change the look-and-feel of the weblog so that it wouldn’t look exactly the same. So, even if one feels that the Slashdot infrastructure is technically or aesthetically superior, there is no restraint in using it and no way whatsoever in forcing one to pay for using it. In fact, there are scores of weblogs powered by Slash.

OpenFlows is one of those weblogs and a lively one. It is an online community sheltered by a weblog. At the same time, OpenFlows is also a commercial organisation whose business model is based on implementing, customising and providing support services on open source/free software. So what does this have to do with weblogs? I will explain. Say I am writer and I have decided to start a weblog to promote my new book and discuss with my readers the ideas in it. Say that I also like the Slashdot weblog and would really like mine to work in a similar manner but look different so that to have its own personal aesthetic character. Unfortunately, even though Slash is free and I could adopt and modify it to suit my needs, I know next to nothing about programming. So what do I do? I arrange that Openflows do it for a fee. This hypothetical example is not far from the truth. No Logo, a weblog dedicated to discussing the ideas in Naomi Klein’s No Logo book is powered by Slash and OpenFlows is the company that tailored it. That’s how Openflows makes money.

A friend of mine while reading the above shouted “So is it customisation and selling services to companies who want to jump on the blogwagon where the money is?” and he went on “consultants and website designers have been doing this for ages…or is it selling weblogs to the masses?”. First of all, I reckon we all agree that consultants and website designers have been doing it for a long time. And selling weblogs to the masses is not my point here, although companies such as Radio Userland and Pyra Labs (recently acquired by Google) are doing pretty well by doing exactly that. My aim is to show that weblogs mean business but not necessarily in such easily identifiable ways. Had it not been for the OpenFlows weblog, which is of course free for all to use, I doubt if any company or individual would hire the programming talent of the company known as OpenFlows. The weblog, in other words, is a living ad of the company. It demonstrates in real-time and under real-world circumstances, rather than in a closed-doors demonstration distanced from reality of the typically encountered product marketing pitches during industry conferences, that the company’s product does not collapse under pressure and the company is really committed to what it’s selling. By engaging in community dialogue at its own weblog, it also demonstrates that the company is open to criticism and feedback from the marketplace. The company is not distancing themselves from the marketplace; on the contrary, they do all they can to connect to the marketplace and engage in a conversation.

In the infuriating Cluetrain Manifesto, theses 34 – 40 read [6]:

To speak with a human voice, companies must share the concerns of their communities. But first, they must belong to a community. Companies must ask themselves where their corporate cultures end. If their cultures end before the community begins, they will have no market. Human communities are based on discourse – on human speech about human concerns. The community of discourse is the market. Companies that do not belong to a community of discourse will die.

For one thing, OpenFlows understands that “companies that do not belong to a community will die”. We should remind ourselves that OpenFlows is cashing in on open source/free software. Making money out of open source/free software is not evil - as some people wrongly believe - as long as the community rules are strictly adhered to. To rephrase that, if the company does not ‘belong’ to the community, a commercial symbiosis (between the community which provides the product to start with and the company) is most certain to fail. And failure results in inability to use the product. Therefore, it is safe to say that Openflows is a community-centric organisation; is run in harmony with the open/source community ethics and its weblog is dedicated to the continuation of public discourse centred on issues of interes