Push Pop Press (Facebook Instant Articles) with Todd Bishop

Transcript: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

Ben:                 Well, is it anti-Trump?

David:              Yes.

Ben:                 Then, I think we’re probably fine.

                       Welcome back to Episode 13 of Acquired, the show where we talk about technology acquisitions that actually went well. I’m Ben Gilbert.

David:              I’m David Rosenthal.

Ben:                 And we are your hosts. We have a very special guest today, visiting us from GeekWire, Todd Bishop.

Todd:               Hey, it’s great to be here.

Ben:                 So great to have you.

Todd:               I’m a fan. I’m a listener. I think yours might be the only podcast that I’ve listened to every episode of.

Ben:                 Whoa!

Todd:               You’re still relatively new but yeah, I listen on my walks on the weekend and really love what you guys do on the show.

David:              Thank you, Todd.

Todd:               Yeah.

David:              We are glad to have you.

Ben:                 Yeah, it’s a privilege. For this episode, it’s going to be particularly interesting. We’re talking about the publishing industry. So we wanted to have Todd on because we thought it would be particularly fascinating to listeners to get a little inside info from someone who’s kind of experiencing the results of the acquisition firsthand.

                       So before we get into what the episode is on today, a couple of administrative things. First one, please leave us a rating and review on iTunes. It is tremendously helpful for the future of the show as we invest in better tech and we get more and more guests on, and we're able to do more things with the show. Appreciate doing that and doing any sort of sharing on social media that you feel is appropriate. Secondarily, we started a Slack community and we’ve seen some really great uptake in that.

David:              Yeah, it’s been really fun to chat with all of you guys and please, we’d love more people to join, but for people who are already in, keep the questions and discussion coming. It’s been great.

Ben:                 Yeah, and we’ve got some email asking, “Well, how do I join?” It’s on the Acquired website. If you’re on Desktop, it’s a little widget on the right side. You just enter your email and then it emails you how to do it. If you’re on mobile, it is down below the posts.

                       So without further ado, our episode this week is on Facebook’s acquisition of Push Pop Press. Try that… blah.

David:              Say that five times fast.

Ben:                 David, do you want to dive in with the history and facts?

David:              As always. So, very interesting one here. The company, as Ben mentioned, is Push Pop Press which not many people have heard of. But it was founded in February 2010 by two guys, Mike Matas and Kimon – I’m probably going to butcher his last name – Tsinteris, I believe. And they were both alums of Apple. And they had been, one a designer and one an engineer at Apple for about 4 or 5 years and they had worked on the iPhone in the years leading up to the launch.

Ben:                 Yeah, and as a total Apple nerd, these guys are legendary. I mean, you look at their portfolios, they’ve designed everything from the charging battery icon and the front of the iPhone for the first 6 offer releases to Maps –

David:              Ben, you’re stealing my thunder here.

Ben:                 I’m sorry.

David:              I literally have my notes. So yeah, these guys, they weren’t just any Apple engineers and designers. Between the two of them, they designed the first versions of the Camera app, the Photos app, the Maps app, the Settings app, the battery display, the Photos app for the iPad and Time Machine and Photobooth for the Mac.

Ben:                 Well, I should stop doing anything from memory ever.

David:              Yes. Quite, quite impressive guys. And interestingly, while they were working on Push Pop Press which was only for about two years, Mike was also working on the side. I don’t know which was the side gig and which was the permanent gig, but he was one of the first people working on Nest, and nobody knew what Nest was at this point. But they were the secretive startup from former Apple folks and Mike was also part of that team.

Ben:                 He was. And Mike has had his hands in really great software for a long time. For the Seattleite listeners out there, he’s actually a native Seattleite and worked on some really incredible Mac software that is pixel perfect called Delicious Library from Delicious Monster.

David:              That’s right.

Ben:                 With Wil Shipley and that, yet again, Apple nerd and admirer of great software, is really kind of setting the bar for creating great UX.

Todd:               And one of the greatest startup names ever, right? Delicious Monster, yes.

Ben:                 Yes.

David:              Indeed. So, we have these two superstar engineers and designers from Apple. They leave, they start Push Pop Press. What is Push Pop Press one might ask? So at the TED Conference in Spring of 2011, they unveil at the conference what they have been working on and it was an attempt to reimagine the book. What does the book look like on a mobile computer, both tablets and phones, smartphones? And the first book that they launched was in conjunction with Al Gore who interestingly was an Apple board member and also at the time I believe still affiliated with a venture capital firm, Kleiner Perkins, which was an investor in Nest. And they worked with him to launch his book called Our Choice which was about the environment. And it was an incredibly beautiful app. It was released as an app within the Apple App Store. It was only on iOS. And the technology behind it that Push Pop Press created enabled highly, highly immersive interactions with again really a reimagining of what a book was with interactive content with audio, with video all seamlessly integrated into this experience.

Ben:                 Yeah, and one of the things to note about that was it’s not an easy thing to imagine a really immersive, beautiful, kind of perfect animation curve application like this. That alone is hard. The engineering especially on those real early iOS devices is particularly difficult and these were kind of the two guys in the world that could built that, envision that incredible experience and then…

David:              Yeah, we're talking early iPads and iPhone 4/4s timeframe. And actually interestingly, now we can’t verify this, confirm or deny but it has been reported in the press that this actually might have gotten them into a little bit of trouble because apparently, again according to some articles out there, we don’t know if this is true or not, but apparently Steve Jobs noticed when these guys left and noticed what they were working on. And he believed that a lot of the technology that they used to build Push Pop Press was actually alarmingly similar to some of the patented technology that they had developed while they were at Apple working on iBooks. So he again supposedly got a little upset about this.

Todd:               Good thing there’s no non-compete provisions in California, right?

David:              Yes, exactly. Well, this was actually an IP issue. This was a patent issue supposedly.

                       So this was after launched at TED in 2011 and then interestingly at WWDC that year in June, not everybody at Apple was too upset because Our Choice in Push Pop Press actually won an Apple Design Award for the iPad as being one of the best designed apps according to Apple on the iPad that year.

                       But nonetheless, very shortly thereafter in the beginning of August of 2011, Facebook announces that they have acquired Push Pop Press for an undisclosed amount. And again supposedly according to these articles, the fact that Jobs was kind of on the warpath about this and upset about some of the potential IP violations regarding books and apps might have contributed to the outcome here and not continuing to go along as a standalone company. No way for us to know.

Ben:                 Interesting hypothesis. I never took it there before. A note on this acquisition. I think it’s safe to assume that’s a pretty small sum, not a big team, very early stage but what it did represent, I remember thinking this at the time. I had bought the book, it was incredible to play with, had great reverence for sort of the technology behind it and I’m just thinking, “Man, Facebook just keeps buying up…” and we don’t know if this was an acquihire but had done several acquisitions before of teams that were just incredible iOS designers and developers and I was like, “They really have a war chest there.”

                       Thinking back to that time period, I mean this was still a great state of flux for Facebook in the mobile era. They were doing the hybrid web thing. They hadn’t managed to translate their, you know…

David:              The Facebook apps were not native on iPhone and Android. They were doing the rapper development. It was a mess.

Ben:                 Right, and their mobile future was uncertain with their ad revenues. They hadn’t translated their cash cow from desktop yet and as we know, it became incredibly successful with the newsfeed ads, it’s one of the best ad units in history.

Todd:               But you’re right. There were times back then, I remember some, I believe, I don’t know if they were public or not at this point, but there were big questions about whether they could translate their success into mobile apps and into mobile in general.

David:              Yeah, this was right around the time there was an infamous Recode interview at the Recode Conference or this might have been before Recode.

Todd:               Probably it was back at the AllThingsD conference.

David:              At the AllThingsD conference.

Todd:               Was this the hoodie?

David:              Yeah, the hoodie where Mark Zuckerberg was being grilled on stage by Walt Mossberg and Kara Swisher. He had a hoodie on and he was sweating profusely and he was being grilled about mobile and Facebook’s missing of mobile, and he ended up taking the hoodie off and it was…

Todd:               And then it had like that Ilumaniti inside.

Ben:                 The crossroads or something, yeah.

David:              Pretty embarrassing moment. But others have speculated that moment was the turning point when he realized that Facebook needed to go all in on mobile and they really did after that.

Ben:                 Yeah.

David:              And this acquisition was part of it. Now interestingly, and then we’ll wrap up the history and facts here, as Ben mentioned, we don’t know the price of the acquisition. We have to assume it was quite small. Push Pop Press had never raised any money. It was just the two of them and a couple other people who were working on it. But when they were acquired, the founders actually wrote on the website on their blog that this was just about them and the technology. They were not going to continue in the book industry.

                       They write, “Although Facebook isn’t planning to start publishing digital books, the ideas and technology behind Push Pop Press will be integrated with Facebook giving people even richer ways to share their stories. With millions of people publishing to Facebook every day, we think it’s going to be a great home for Push Pop Press.”

Ben:                 Cough. Publishing. Cough.

David:              Cough. Publishing. Not books.

Ben:                 Yeah.

David:              Interesting. So yeah, let’s get into it. Just to wrap it out quickly. So then the team goes, the two of them go on and they work on two things that they’re still working on at Facebook. First is Facebook Paper which many people don’t remember but this is a standalone app that Facebook launched in early 2014 that’s basically a Flipboard competitor.

Ben:                 Yeah. And if you look at this, this was the first thing. I think it might have been conditional upon the acquisition but Mike Matas got to run Facebook Creative Labs and this was kind of the product to launch out of Creative Labs. And the animations and the sensibilities from Push Pop Press’s book are just right there in Paper. I mean the whole immersive design philosophy, very smooth curves between things. You can tell it’s the same team.

David:              And although Paper, it still exists, you can still download it in the App Store. It’s only on iOS much like Push Pop Press. It hasn’t been a huge success but it informs the real – it was the Trojan horse to the real meat here is that this Push Pop Press becomes and these guys are the product leaders of Facebook Instant Articles.

Ben:                 Yeah. And I think Mike was and recently left but Kimon – I’m not exactly sure how to pronounce it – is still there.

David:              Mike, what are you doing now? Call us.

Ben:                 So I follow him on Instagram. He’s like a tremendous nature photographer and he’s doing a lot of traveling. I think he’s taken some time.

David:              I’m sure well deserved. But Instant Articles is really – I’m sure many of our listeners know about it but this is really a game-changing product that Facebook launched last year. And it was interestingly, I’m sure you all appreciate this, the fact that they were working on it was scooped by David Carr at New York Times in fall of 2014 and then it ends up coming out in spring of 2015. I believe the opening line of his article where he talks about this is that Facebook is like a big dog in the park that is galloping at you and you don't know if it wants to play with you or eat you.

Todd:               Oh my God, that is so perfect. So perfect.

David:              And if you were a publisher.

Todd:               Exactly, exactly. Boy, I’m in the park, man.

David:              Yeah. You guys are in the park.

Todd:               We are, we are. So in preparation for this, I had spent quite a bit of time with our analytics just getting a sense for what we get from Facebook, what we give to Facebook. We get roughly 10 percent of our traffic from Facebook.

David:              Is it the largest single?

Todd:               It’s the largest other than organic search. So if you look at organic search, it’s close to half. But in terms of this, in terms of actual dedicated inbound referrers. So it's quite a bit of traffic. Now, in the old school publishing mentality, publishers will think, “I’ve got to get users on my site.” That is where I’m converting them into potential e-commerce customers or I’m getting them on my email list.

David:              Subscriber list.

Todd:               Exactly. And I think Instant Articles is one of the best examples of that mentality shifting for publishers that are a little more progressive.

David:              And we say a word too about what it is for people who haven’t really dug into the product. This is a major change in the way content and articles that is owned and written by publishers is being distributed. So, before Instant Articles, if somebody shared a link to an article on Facebook and you clicked on it on mobile, you would be taken to the mobile browser and read the article on the page as Todd was saying, at the publisher’s page. But with Instant Articles, publishers are actually giving their content over to Facebook. It’s being hosted on Facebook’s servers and then displayed in a very Push Pop Press-like, beautiful, immersive reader that loads instantly rather than clicking through to the mobile web and waiting for everything to load. And even more importantly, for this discussion, Facebook can sell and serve its own advertising within the article. Now, publishers can too and if publishers sell the ads in the article, they keep 100 percent of the revenue, but Facebook can also sell in and then they keep 30 percent of the revenue.

Ben:                 Yeah. To put some numbers behind how much faster it is, they say an average webpage article takes about 8 seconds to load and people just bounce off that to a tremendous amount. They click it –

David:              Especially on mobile.

Ben:                 Yeah, yeah, and they say it’s 10 times faster in an Instant Article.

Todd:               Yeah, I can’t count the number of times when I’ve gone. This is not worth it. I’m going back and finding something else to read. So I think that whole construct and that assertion of theirs is very valid based on just casual everyday user experience. But this is a mentality shift for publishers because you’ve got so many readers on Facebook already and the old school mentality is hey, we need to get them on our site. But when you start talking about the monetization, that’s when it starts to go okay, well, you know. To go back to your dog park analogy, maybe I’ll let Facebook, you know, I don’t know. I don’t want to say it.

David:              Click my face? Yeah.

Todd:               Exactly. That is much better than what I was going to say. Thank you. So yeah, I mean that is the thing. We’ve actually experimented with Instant Articles a little bit and I should say this is part of a broader set of these types of approaches. Google has Accelerated Mobile Pages, very similar. We’ve actually had a lot more success with AMP than we have with Instant Articles. Apple News, of course, and then Flipboard. All these things are examples of publishers saying okay, the articles don’t need to be on our site, but what do we get in return for allowing you to host them. And really for us, it’s the monetization.

                       With Facebook Instant Articles, Instant News, we have not yet seen the kind of user base that would justify putting a lot of effort into it and because the revenue just isn’t there yet. Google is actually a bit of an exception because they’re so integrated DFP(Double Click for Publishers). And it’s our native system, Google gets it. So in that way I think Google may have a bit of an advantage in terms of the monetization and then in attracting publishers in this whole Instant Article world.

David:              Yeah, interesting.

Todd:               So that’s our view, yeah.

David:              Even though Facebook probably has a significant advantage in terms of traffic.

Todd:               Exactly, yes.

David:              But Google has much better monetization tools for you.

Todd:               Yes, for us as a publisher. But there’s no denying the reality of Facebook’s user base.

David:              So I’m curious. How do you and John think about this? We're talking before we started about old web publishers, talking to The Philadelphia Inquirer… I worked at The Wall Street Journal back in the day and I mean, the cost structure at the Journal, we spend a billion dollars every year on everything putting out the paper and creating a website and all this, and it was all about creating that relationship with the reader. And now we live in a different world.

Todd:               Yeah, it’s definitely changed. We talk about our publishing process. Just as an example, we’ll publish a story on WordPress and then every reporter for us, the next step is to go to Facebook and you’re really not done publishing until you've published a link on Facebook. And so obviously Instant Articles takes that a step further because it's just automatically populating that with the cached version, the Push Pop Press version essentially. So it’s just you think of your readers in a much broader way than just the people who are on your site.

                       You think about other things too like we’ve been experimenting a lot with retargeting and the whole notion of once a reader leaves your site, you can still serve them ads from yourself for events for example or for your advertisers, on behalf of your advertisers on Facebook. So, we think about it as it’s much more holistic now. And in that way, Facebook has broadened the horizons. They’ve taken away the audience but they’ve also opened the door for you to get there.

David:              Well, it used to be, I mean every publisher, large and small, had their own ad sales force, right? And that was where a huge part of the cost at the Journal and elsewhere. But that ability to sell that audience was so limited relative to a Facebook and so now you live in a world where it probably doesn’t really make sense as a publisher to invest a lot in your own ad if you can just click a button. I’m curious what do you think.

Todd:               Well, I think a couple few people back at the office are going to be listening very intently to this.

David:              Yes. I mean we had hundreds of ad sales –

Todd:               Exactly.

David:              But you know, I’m sure you guys don’t have hundreds.

Todd:               We have three and the advantage there obviously is that in terms of direct sales, you can provide more value, you can provide custom packages, you can bundle in events and so your margins are higher than just going through some kind of network buy. So for us at least in our size there’s still a big value in having direct sales.

Ben:                 Not to mention you actually know what experiences be delivered to your reader. You don’t have to hope and pray that some network is inserting a thing that you want next to your context.

Todd:               Oh that’s absolutely right, yeah. The control issue is something there. And that’s all about just making sure you’re delivering the right value to the reader and to the sponsor.

Ben:                 For Accelerated Mobile Pages, for Google and for Facebook Instant Articles, do you guys do your own ad sales or do you hand that off to them and take the 30 percent cut?

Todd:               So we’ve only done a little testing with Instant Articles and actually it’s a whole other issue. We’ve run into a problem with the plug-in created by Facebook and Automattic, the creator of WordPress. Like I said, this could be a rat hole, so you can edit the sound later, Ben. But they have some work to do on that plug-in and so we haven’t been able to fully test that.

Ben:                 And that’s the plug-in that theoretically makes it easier for publishers that Facebook can go in and automatically suck out your content and then put it into an Instant Article without you doing a whole lot of work.

Todd:               That’s right, exactly. For Google Accelerated Mobile Pages, just because of the extension from DFP, all of our ads can go there. So if we direct sold an ad that appears on the site, it can go into AMP, into Accelerated Mobile Pages.

Ben:                 Wow, huge advantage to Google on that.

Todd:               Yes, absolutely.

Ben:                 As a consumer and a reader, I’m much more of a fan of Facebook and Instant Articles because you get this experience where I’m in a native experience, it’s already downloaded, all the content from the article, and I just go right into it. On Mobile Pages, whenever you’re on a website, you’re keenly aware that you’re on a website and it’s not quite native. So for those of you who haven’t or don’t know if you've hit an Accelerated Mobile Page yet, it’s when you search for something on Google and there is a result that’s for a news story that sort of keeps you on the search results page but there’s an article overlaid on top of it. And I’m always a little disappointed like yeah, it’s a lighter website and it's accelerated but it's still kind of a webpage and it would be nicer if it was more native.

David:              A Push Pop Press-like experience.

Ben:                 Right. So it's interesting to hear it like…

David:              I definitely want to keep this conversation going but let’s move into acquisition category.

Ben:                 All right. So even before you read their press release, I said that it’s primarily a people acquisition; secondarily, a technology acquisition. And it sure sounds like we're in agreement there.

David:              Well, I had primarily technology and secondarily, people. But it’s all semantics.

Todd:               Yeah, I’d have a hard time disagreeing with that. My question is what were they doing between 2011 and 2016. There was a talent acquisition or a technology acquisition. It took them a while. I guess it was 2015 that they came out with Instant Articles.

Ben:                 I think Paper. I think for a while they were kind of playing around with what is the thing that we’re going to build and that was sort of why Creative Labs was its own little entity in Facebook before Paper came out.

Todd:               Yeah, got you.

Ben:                 I think the team for Paper actually got pretty large and it was a sizable effort where… I don't know the exact quote but I remember Zuckerberg announcing it and saying like this is a new direction for Facebook, like this is the new way you experience Facebook.

David:              And he was right. It just ended up becoming within the Facebook app itself.

Ben:                 Yeah, yeah.

David:              Which I think was interesting. The other thing is that, like you were saying earlier, the core Facebook app was such a mess in those early days. I think it’s amazing how much functionality has been brought back into that app and how big that piece of software has become.

Ben:                 Yeah, yeah. You want to go with what would have happened otherwise?

David:              Yeah, well, I think this merits an interesting detour. Let’s say they stayed independent and continued trying to reinvent the book. Good idea? Bad idea? How does that play out?

Ben:                 There’s no way they don’t get picked up and if it’s not Facebook, it's someone else but will also spend that. Like I think that they’re so good and it’s so inexpensive when they’ve built it. It was so interesting to so many players that like I don’t think this scenario exists, but let’s go down to what would have happened if they had kind of reinvented the book.

David:              All of a sudden they’re competing with Amazon.

Todd:               And they’re getting sued by Steve Jobs.

David:              Maybe. Yeah, I mean it’s interesting like it would have required – For that to really work as a business, it would have required content producers like writers, authors to embrace a whole new medium basically and what’s interesting about that versus what it became with Instant Articles is the authors of content, publishers don’t do anything different. Facebook sort of does its magic and makes it look beautiful.

Ben:                 And they can. Facebook wants you to. There’s all this kind of unique things that you can do with data visualization and parallaxing images and things like that.

David:              But you don’t have to.

Ben:                 No.

David:              Yeah. And I think probably very few. It's splashy when publishers do but they probably don’t do a lot of it.

Ben:                 Probably hard to justify the ROI on that.

David:              Whereas you would have to create a massive behavior change in terms of producers to really reinvent the book. So likely it would have been hard.

Ben:                 One way we could see that proxy for that playing out is with iBooks Author. Apple came out with that software to create textbooks and it’s supposed to be exactly the same thing like things that move, things that slide, interactive ways of learning. And when they announced it onstage, I was thinking like this is really going to require some serious things that Apple is not necessarily good at, like they’re going to need a lot of sales people, a lot of relationship managers really to go and convince the five major textbook publishers. Pearson and the likes of them that like this is their future and I just don’t think they doubled down on that.

David:              Yeah, it didn’t work.

Todd:               Yes, it seems like the other natural acquirer here would have been Amazon. Am I off-base on that? I mean, just given the books angle.

Ben:                 Yeah, it sure seems like it.

Todd:               Or Barnes & Noble maybe if they were back in… because it was 2011, you know. They were still sort of in the game. It’s a digital world.

Ben:                 Yeah.

David:              That is cool to think about like what if Kindle were “beautiful”. No offense to anyone working on Kindle.

Ben:                 It’s gotten a lot better.

David:              It has gotten a lot better. I love Kindle. It’s probably one of my most used apps and devices. I use both the app and the device.

Todd:               Yeah, and the Oasis is pretty darn sweet. I’ve used one.

David:              I would love to get one but I just can’t get justify $300 for it.

Todd:               And of course e-ink is a whole different game to what we’re talking about here. But yeah, there’s still lots of room for improvement in the whole digital e-book landscape.

David:              Yes, lots of room.

Ben:                 I do want to raise the point to I think they had the luxury of being super, super selective of if they were going to get acquired, who it was going to be by. They strike me as the kind of people that if they didn’t have tremendous respect for the company and didn’t feel that their principles of design and beautiful experience were sort of like embodied in the efforts of whatever that company was trying to do, I don’t think they would have gone, so I think that narrows –

David:              I mean they hadn’t raised any money so there were no evil VPs on the board forcing them to sell. But yeah, I think you’re probably right. And not to mention that, was it Mike I think was working on the side or fulltime at Nest. So this is not a forced sale by any means.

Ben:                 No.

David:              All right. Let’s jump back in to tech themes because I think we can really pack some cool stuff with Todd here. Well Todd, why don’t you go first?

Todd:               Yeah. This really does speak to the broadening horizons for publishers and the risks and opportunities that come along with that. I’ve been around since the days when I had one daily deadline for one story that needed to get to the printing press by 11:00 at night, you know. So not to date myself here, but…

David:              I remember those days too from 2009 at The Wall Street Journal, so it’s not that long ago.

Todd:               So I think we’ve gone through a few transitions there for publishers. First, obviously to the web and then to mobile and now in some ways you’re seeing a fourth transition to beyond your own property, what needs to happen, what can you do, who can you reach and how can you monetize it. And that really is the big thing for me here.

Ben:                 Yeah, so Todd, I’ve had a crazy idea for a startup for a while and this is the perfect time to poke holes in it. Could you start a publisher at this point that doesn’t have a website, that purely exists on social? It’s only on AMP, it’s only on Instant Articles.

David:              Well, one might argue this is what BuzzFeed is.

Ben:                 Yeah, they have a destination site. I’m curious how much their destination versus social.

Todd:               I think you could and I think you should. And that would be fantastic. I think you should do, yeah, everything but a website. So in other words, publish on Facebook. The Verge has been talking about this and I think their new gadget blog is focused almost exclusively on Facebook. I think it’s The Verge. I get all those. The Verge, Gadget, and Gizmodo. They just blend together in my mind after I read those.

David:              They’re all good. I’m a big fan.

Todd:               It is The Verge, right? Did the Gadget blog just on Facebook?

David:              I don’t know actually.

Todd:               Correct me on that one.

Ben:                 David, I’m a big GeekWire fan.

David:              I don’t think The Verge and GeekWire are competitors but yes, I’m a big GeekWire fan as well. But it’s interesting. One of my themes I was hinting at earlier is this sort of reinvention of the publishing industry. I’m curious how you guys at GeekWire, I mean, you are a news site of course, probably first and foremost, but there’s so much more to what you do. You’re a community. And how do you think about life in your business model in this new world?

Todd:               Yeah, absolutely. So I can share a few broad details about roughly 60 percent of our revenue has nothing to do with the website. And it’s not because it’s coming from Facebook or anything else. It’s probably not accurate to say it has nothing to do with the website but we get event revenue. I mean that is a major driver of our business.

David:              And you were saying your ad sales efforts are focused on a holistic package, right? You’re getting ad units on the site but you’re also getting sponsorships at events and you’re offering something beyond just a website.

Todd:               Right. The way we look at it is that our news brings people to the site and then we create a community around that news and then the question is okay, you've got this great community, how can you provide value to that community and to the people who want to reach it. And if you think about it in that abstract way, then all these really interesting possibilities come up. If you just think about it as “I’ve got people coming to my website, I want to serve them ads,” then it’s too simplistic and it’s a decade ago mentality. So this is all part of that broader evolution and how publishers think.

Ben:                 In thinking about Instant Articles, some of the bigger publishers that have this sort of a trained behavior of a whole city going to their website every morning, much like they used to read their paper at their dining room table every morning and they worry about doing something like this because it untrains that habitual behavior of going to the site. Do you guys worry at all about sort of losing that oh, they’re not used to going to GeekWire anymore?

Todd:               Certainly there is a core set of your readers who will always do that, but so much anymore the front door or, yes, the front door of your website is not your homepage, it’s an article that somebody comes into and when we think about the design of the site, we think about that, you know, this is really the place that people are coming to. And that’s driven by social. It’s the fact that people are getting a link off of Twitter or off of Facebook and they’re coming in to your site through the backdoor essentially.

David:              It’s a phenomenon that… I know I subscribe to them, I’m sure. Probably we all do and many of our listeners. I don’t go to the news anymore. The news comes to me.

Todd:               Right. So if you’re not playing at all in that entire ecosystem, then you’re taking a big risk. And there are some people who can do it successfully. There’s a great biotech site in Seattle run by a guy named Luke Timmerman and he does $99 a year subscriptions and has a built successful one-man business out of it. So there’s different approaches but for the most part if you’re going to be a holistic publisher in this world, you've got to play in all of this stuff.

Ben:                 It’s interesting. So I was going to bring up one of the tech trends that identifies to me is sort of the corporate unbundling away from core competency where you can decide to take a dependency on a different business for something that you’re deciding is not the thing that is unique and differentiating to you. And so one thing that I’ll bring up here is Ben Thompson has a great theory about –

David:              I was wondering how long we would go in this episode before we reference.

Ben:                 Time is trajectory and this episode is 32 minutes. Actually I don’t know what mark it will be. But he has a great theory about okay, I can be a one-man independent publisher because I have this very sustainable business model where people pay me directly and I know that I’m not a destination site so I need to run extremely lean because I only have this very specific business model that allows me to do that.

                       And then on the other side of the continuum you have The New York Times and they can afford to do all things for all people because they have just all eyes on them. They’re the first thing that people check. I mean there are very few of those who have survived the Facebook-ization of the front door of the internet. And it’s interesting to see how publishers in the middle play with that.

                       And I think Todd, you raised a great point that you sort of have to embrace that it’s the world around our publication.

Todd:               I just pulled up our analytics to maybe shed some light on this. So about 45 percent of our inbound traffic is from organic search, 22 percent is from social, all forms of social. I’m sorry, 22 percent is from direct and then about 18 percent is from social. So you got a sense for we still have a pretty good direct audience there.

David:              That’s actually crazy to me that organic search is still by far the largest.

Todd:               It is. That may speak to the quirks of our audience or our site but I don’t know if that’s the case of everybody.

David:              And that does not include direct.

Todd:               That does not include direct. Yes, that’s organic search.

David:              Wow.

Ben:                 That’s a testament to the omni-bar right there. I think as much as we’re –

David:              Yeah, we have a good point. Google is serving ads on – Well, let’s go buy some Google shares right now.

Ben:                 Nobody knows the difference between –

David:              Do not dispense investment advice on this show.

Ben:                 We should probably be legally bound to say that more often. Most people don’t know the difference between typing in words and typing in the URL. So they’re going to the internet, they’re typing in the words, and if GeekWire is the first thing that comes up with the information about what they’re looking for, they hit it.

Todd:               Right.

Ben:                 And it’s interesting only that… well, the interesting nuance there to me is that more people are being active about the news that they choose to learn about rather than reactive to whatever comes up in their Facebook feed. I don’t think I was giving people enough credit.

Todd:               Yeah. Like I said, we may not be representative of the broader trends out there. There are some quirks around these.

David:              But still, it’s fascinating.

Todd:               Yeah.

David:              Would it be fair to say that you guys at least have reimagined your product from being journalism to being a community, from being a news site to being a community.

Todd:               I’d say it’s still at its core a news site and that’s the thing when you look at the drivers of the business, doing quality news. We’re trying to break news. That really is your ultimate competitive advantage and that gets to what you were talking about, Ben. It’s like focus on your core competencies. Developing a social network is not my core competency. I was trained as a journalist and most of the folks at the company were. And so that really gets to what you were saying there.

Ben:                 Yeah, and I think I should just say like you guys do a really amazing job at that.

David:              We should say too that we are both big fans.

Todd:               Oh, thanks.

David:              GeekWire is I’m sure for all of our listeners in Seattle are already fans but for people who are not in Seattle, you probably also have heard of GeekWire but it is a fantastic technology news site and I think especially speaking as you see here in the Seattle community, just a lynchpin of the whole technology in the northwest.

Todd:               Thanks. I should say only 30 percent of our traffic is Washington state. So Washington state is our largest individual market but it’s not the majority of our traffic. It speaks to a couple of things. First, there’s intense interest in what’s going on here from other parts of the world. What we found at the site on the premise that Seattle and the Pacific Northwest deserve a national and international technology news site of their own, and so the traffic kind of bares that out. That’s my stump speech. That’s my elevator pitch. I’ll be on a future episode. I’ll be on Episode 150 of Acquired, “The Acquisition of GeekWire.”

David:              The Acquisition of GeekWire.

Ben:                 Washington as the largest single geography but not a majority, you and Acquired both.

Todd:               There you go. Nice. Awesome. Perfect.

David:              Well, basically we can do a merger.

Todd:               We’ll talk after.

David:              We’ll talk after, yeah. That’s not on the record.

                       So we’ve covered great tech themes here. The other one I wanted to bring up quality is Ben Thompson, his aggregation theory which we’ve talked about also on the show before, but basically is a theory that in the past, and it’s represented nowhere better than publishing and journalism, where in the past you needed to aggregate distribution. As a distributor, you needed to aggregate journalists and you needed to aggregate delivery routes of newspapers. Everything basically looking backwards from the customer. You didn’t really care about the customer. The customer needed to come to you. In the internet world, you need to aggregate the customers and then all of the producers will come to you. And this is what’s happened with Facebook here, with Instant Articles. They cater to the customers. They care about the user experience. They care about making it beautiful which is why they acquired Push Pop Press so that the customers come to them, or the customers are their customer, the readers. And then the producers come to them. Which I just think it’s super, super interesting.

Todd:               That’s great. I had never thought about it that way. And it’s true. It's completely true. And that’s why Facebook has so much power. I mean if you watch just the casual person pick up their phone, chances that they’re going to open the Facebook app first are so high.

David:              Incredible.

Ben:                 They decide what you’re going to be entertained by. That is a tremendous sort of deal.

Todd:               And informed by which is the whole issue that’s come up recently with the issue with the Facebook Trending Stories.

Ben:                 Yeah, that’s an interesting thing. Should we touch on that a little bit?

David:              Yeah, go ahead.

Ben:                 For our listeners who haven’t been tracking, there was basically… There are mixed feelings about how true it is but basically not in the news feed itself but in the little trending news widget on desktop on the top right or on mobile when you tap into an empty search field, you see the hand curated top news that Facebook thinks you would be interested. The news story basically alleges that they had talked to someone who used to work on that team and they said it was anti-conservative, and the blowup from that has been unbelievable. The interesting takeaway is boy, if the blowup from that little thing has been that big, that little thing that half of you probably haven’t even seen and most of you probably have never clicked on, people give Facebook a tremendous amount of credit for having this agnostic algorithm. So can you imagine if they were doing anything in the news feed algorithm to tilt one way or another. I mean they’re viewed as like this arbiter of the truth and there’s this pure clean algorithm that decides what you look at. And I think that trust that they have instilled in people is powerful.

David:              A crack has emerged though in the past month. Let’s see what happens.

Ben:                 I think very, very dangerous for them.

Todd:               But it speaks to their power and it speaks to that whole flipping of you aggregate the users.

David:              You aggregate as long as users are coming everyday to Facebook as a producer, as a publisher, you have to be there.

Todd:               Yeah, absolutely.

Ben:                 This gets right back to what we said last episode that their crown jewels are engagement and it’s engagement and time onsite and just how much of your life you’re giving to Facebook, and that’s the power that they wield.

David:              Interesting to contrast that with Snapchat too from the last episode which is they said like we’re not going funky algorithms, we’re not tracking you, we’re not anything; we’re like you watch the stories you want to touch and you follow the people you want to follow. And it’s hard to discover things on Snapchat. Interesting.

Ben:                 It is.

David:              All right, should we move on to conclusion and grading?

Ben:                 Yeah. This is an easy A for me. I think they really couldn’t have done any wrong. I don’t think that this acquisition necessarily made it so that they were going to go this direction. I think that this is doing something like Instant Articles is a natural course and they would have done it maybe just like slightly less beautifully but I think great people to pick up. They were great leaders at Facebook, just talking to friends that worked with Mike. I think only good things.

David:              Yeah, I agree. I’m just thinking… I think you’re right though. If they hadn’t acquired Push Pop Press, they would have done this anyway. It just would have been less beautiful. So in that sense it was probably really a great acquisition. I don’t think they spent that much. We don’t know but they probably didn’t.

                       Yeah, I’d give it an A too. I think what’s nagging at me is there is an element of creepiness to Facebook as we were talking about this crack that’s emerged, one. And two, could there have been something bigger that Push Pop Press could have been. I don’t know. This was a great buy for Facebook, no doubt.

Ben:                 Do you mean within Facebook?

David:              No, not necessarily.

Ben:                 I think we typically… To lay out the criteria for how we grade these, it’s usually imagining that you are a shareholder of –

David:              The acquirer. I don’t know what else they would have done within Facebook that would have been great. So yeah, A. But I feel like Todd has got some…

Todd:               Well, what was the thing? Did you say it was Paper that they worked on? What was the… inside Facebook.

David:              Yes, Paper.

Todd:               I think if that had been like a runaway hit, then it shouldn’t have been an A. I don’t know.

Ben:                 I didn’t have the +.

Todd:               Okay, I got it. So I’ll give it a B+. I’ll reserve the right to move that to an A if they fix the damn plug-in. Did I get an explicit language warning there just now?

David:              No, we’re good. We're good.

Ben:                 And it's interesting. The only thing that I think could lower it is – you raised an interesting point – is this a strategically good idea for Facebook like should they be focusing so hard on news and not just what you would discover that already lives on Facebook.

Todd:               I think it was brilliant strategically.

David:              Yeah, totally.

Todd:               I mean the whole notion that they become the platform, they host it, they serve it up, they’re in control. From Facebook’s perspective, it’s hard to see how it’s bad.  

Ben:                 So if Facebook’s goal is engagement and they want to keep you in the Facebook experience and ecosystem longer and they really want to be the internet to you, we’ve seen social, we’ve seen publishing, what’s next? What else lives within Facebook that’s not currently within Facebook that will be the next Instant Articles?

David:              Well, Live that they’re investing hugely which is in television.

Todd:               Of course they did this with games for a while. It would be interesting to see if that was reincarnated in a new way. Of course, virtual reality with Oculus.

Ben:                 Yup.

Todd:               Yeah, Live is a whole other topic. We’ve been experimenting with that, too. It’s totally changed the way we think about video.

David:              Oh, cool.

Ben:                 Oh, I’m curious.

David:              Really?

Todd:               Yeah. So we’ve been doing live streaming and we now have a debate every time. YouTube or Facebook? YouTube or Facebook? And in the past month the balance has shifted to Facebook because you just see instant engagement.

David:              Have you guys tried Periscope?

Todd:               We tried that a little bit. Yeah, Periscope.

David:              Have you tried Snapchat at all?

Todd:               No, no. Snapchat’s one where we’re not as advanced as we should be honestly. And that’s part of the problem as a publisher. It’s like where do you put your resources? There was that ad, the joke where the two executives are going up the elevator and the two bike messengers are talking about some hot new social network. Sometimes it can feel like that and you never know exactly when to jump onboard. Pinterest is another one where we have not gotten as much traction. But Live –

David:              Live on Facebook has been big for you guys.

Todd:               It has. Now we’re not monetizing it yet, not directly.

Ben:                 Is anyone?

Todd:               I’m not sure. I’m not sure if that’s an option at this point.

David:              You could hawk products while you’re talking live, but that wouldn’t be as part of a Facebook product.

Todd:               And now Facebook’s got the whole thing too where publishers can actually do sponsored content. So they sell the sponsored content and they’ve got in the Facebook business interface they’ve got the little handshake icon. And so that’s opened up new options too. So a long way of saying Facebook is finally starting to make it where it’s financially at least worth exploring as a publisher versus just putting your stories on there and hoping that you get traffic back. That’s the big shift that we’ve seen.

Ben:                 And did you see that… you mentioned that with live video, there’s the debate between the two. With pre-recorded video, are you using the same thing where you’re going “Yeah, let’s put it on Facebook and not on YouTube?”

Todd:               No, we aren’t and part of that is because Live is just such an interesting thing to do right now. And so we’re still very much keyed in to YouTube. Oh no, I take that back. We’re now posting it on both YouTube and Facebook after the fact. But the reason it’s a debate and either/or a debate is because some of our equipment, you can’t simultaneously live broadcast to both, whereas you can obviously later upload to both.

David:              Is there a particular event there or live event that you've done that you think is like really an example of the future?

Todd:               Yeah. So we’ve been doing tours. In fact we did a tour of the Facebook headquarters. It was very meta. And so a joke to Mike Schroepfer, their CTO, I said ,“Yeah, we’re going to be trying this out on a little social network, you might have heard.” He didn’t get the joke, like total paranoia. He thought we were streaming it on something he had never heard of. I said, “No, no, we’re doing it on Facebook.”

David:              We’re doing live streaming on Down to Lunch.

Todd:               Yeah. But even just the quick stuff, you've got your phone, obviously that’s fully produced. We’ve got handheld mic and we’re walking around with him streaming to a box that goes to Facebook. But just the whole notion of being a reporter, of being anybody out there, being able to pull out your phone and immediately broadcast to a giant audience. Now of course this has been around for a while with UStream and those kinds of things. But it gets to your point, Facebook has the user base and so it changes everything.

Ben:                 And it has your user base.

Todd:               That’s right.

Ben:                 Because it’s presumably people that are fans of GeekWire on Facebook see this right at the top of their newsfeed when you’re live.

Todd:               Right, exactly. So yeah, it’s changed the dynamic a lot now that it just seems like there’s been a cascade of changes over the past year basically.

Ben:                 Yeah.

David:              Yeah, Facebook is investing heavily on all this stuff.

Ben:                 They are. Should we get to the Carve Out?

David:              Let’s do it.

Ben:                 All right. Todd, do you want to go first as our guest?

Todd:               Yeah, absolutely. So my Carve Out is actually another podcast.

David:              Of it?

Todd:               But it touches on themes that you all touch about. And so I’m going to be very specific here. Gimlet Media’s Startup podcast. Now I’m sure a lot of people watch… Here’s the dynamic that happened with this. A lot of people listened to the first season which told the story of Alex Blumberg, the former This American Life reporter journalist, starting his own company which was fantastic. And then season 2 kind of sucked honestly.

Ben:                 Didn’t the Dating Ring shut down?

Todd:               Is this how it happened? Yeah. I personally didn’t… I was not into that whole season. I had suffered through it. Season 3, if you got lost in season 2, go back and start again on season 3. And I don’t want to ruin it but they do a story where they tell the… How can I do this without ruining it for everybody? They tell the story of a startup and its founding and then do a reveal. And they tell you I think it's at the end of the second episode what the startup is that they’ve been talking about. It’s one that everybody knows. It’s one that you’ve featured on one of your episodes last fall.

David:              Oh wow!

Todd:               As soon as you start hearing, you’ll be like, “Oh yeah, I know what company that is.” A lot of people out there won’t know, like casual listeners not in the tech industry won’t know which company they’re talking about. So that’s my Carve Out. Startup Season 3, the first couple of episodes.

Ben:                 God, I love the teaser. Unspoiled, this is great.

David:              You’re a good pitchman.

Todd:               Good, good.

David:              I’ll go next because it’s somewhat related unless you have another podcast, that’s audio or auditorily related?

Ben:                 Not now. Mine are the words.

David:              Okay. So my Carve Out for The Week is something to listen to your podcast on. Super interesting. I read this article on Backchannel which is part of Medium, which is Medium’s tech collection.

Ben:                 Which is great. Backchannel.

Todd:               That’s the name.

David:              Yes. And the title of the piece is called What if the Future of Technology is in Your Ear? And it’s about this Bluetooth earpiece that fits in your ear, it looks like a hearing aid. You can buy it in a variety of skin tones and you can’t tell it’s there. And it’s made in China by some Chinese company and you can buy it for $11 on Amazon. I bought it for $11. When the piece was written, it was $13.It connects to your phone via Bluetooth and you can stream audio to it, you can stream music, you can stream Podcast, you can stream audio books, you can talk to it via Siri. The article is about like the device is kind janky, but it’s amazing for $11. And then you can talk to Siri in your ear and it’s like the movie Her. It’s that and it’s $11 on Amazon. The article is really good. And then the device, I listen to all my podcasts and audio books on it now when I’m driving, when I’m walking.

Todd:               Wow.

David:              It’s just in my ear and nobody knows it's there. It's pretty cool.

Ben:                 Just wait until Siri is good and then it will be…

David:              Yeah right, we’re waiting on that. iOS 10 maybe.

Ben:                 WWDC, fingers crossed.

                       Mine is an article on Medium by Andy Dunn, the founder of Bonobos called The Risk Not Taken. And it’s this really great reflective piece about different points in Andy’s life. One when he was starting Bonobos and one event many years earlier. Really just about times when he’s faced a difficult decision but already sort of knew the answer and he calls it that little voice, little something on his shoulder and it shows up and he looks over and he doesn’t recognize it at first and then he realizes, “Oh my decision’s already made and I have to go do that thing.” And it’s a really interesting play-out of the two different paths that you could go, taking the risk and not taking the risk. And it’s really poetically written. Really, really smart guy. And really great for any readers who are sort of looking to try and figure out should I take the risk, should I not take the risk or maybe perennially thinking about these things.

David:              That is good.

Todd:               What’s the name of the article again?

Ben:                 The Risk Not Taken by Andy Dunn. And it will be on our show notes or the show description. You can hit the little icon next to this episode and find the link.

David:              Before we wrap up, I think we need to talk about this for a minute at the mettle of it all. We just did this episode about Facebook, Instant Articles and publishing and two of our three, well, all of our Carve Outs were media related. And two of them were on Medium. One was a podcast. These are all new forms of journalism and publishing that are outside the bounds of Facebook really in a lot of ways.

Todd:               For now.

David:              For now. But it’s interesting that just when you think the walls have closed around the garden, there are flowers springing up outside.

Ben:                 Speaking of poetic.

                       All right, before we wrap up here, Todd, where can our listeners find you?

Todd:               GeekWire.com. It’s that simple.

Ben:                 Awesome.

Todd:               I’m Todd Bishop on Twitter.

Ben:                 Also probably on Facebook.

Todd:               And on Facebook.

David:              A big thank you to Todd. It’s been awesome.

Todd:               This is really exciting for me. Like I said, I’m a loyal listener. I see the…

David:              Are you going to listen to this episode?

Todd:               I’ll probably wait a month. That’s how I tend to do things. So yeah, I really appreciate you having me on. Thank you.

Ben:                 Thanks for coming.

David:              Thanks for coming.

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