Another Web service has decided that success in business requires the company's primary offering to be given away for free, to be financed by advertising.
No, it's not AOL (although that company is embarking on a conversion to free but ad-supported content). It's a service known as Clip & Copy, which is launching its so-called 2.0 iteration after a long gestation period, at least in Internet years.
Clip & Copy hopes to provide free news links daily or weekly on any topic that you can conceive of. Can this business model be sustained by advertising? Let's take a look and see.
Making News Links That Pay Off
In a telephone interview, Mike O'Donnell, the president and CEO of parent company Data Depth Corp., explained that Clip & Copy has gone through an evolution from its early days, way back in 2001:
Publishers. Data Depth makes formal arrangements with publishers of online material, allowing Clip & Copy not just to link to articles but also to sell licenses to readers. The licenses allow buyers to make copies of articles for distribution throughout a company, to clients, and so forth.
Subscribers. Clip & Copy, a new Web site for the service, just went live last weekend. It solicits visitors to sign up for daily or weekly e-mail alerts, which include links to stories on any topics the subscribers type in. The user interface to select your topics look a lot like Google's advanced search page. You enter a series of words or a phrase, and Clip & Copy sends you links to stories that match.
Advertisers. In its early years, Data Depth relied primarily on license fees paid by subscribers who wished to mass-produce articles found via the service. Today, O'Donnell explains that Clip & Copy can make money by inserting text ads into the Web pages that subscribers visit.
Friends. A prominent feature of the e-mail news alerts is a "Tell a Friend" link. Like the links found on many such services, this service allows subscribers to send an e-mail about a particular article to other people. When these friends visit the Web site where the article is posted, text ads are displayed to them, too.
This model by itself isn't new or revolutionary. O'Donnell concedes that Clip & Copy is similar to the better-known Google News Alerts, which are also free. But he thinks that his offering has advantages.
Advertising That Subsidizes the News
First of all, Clip & Copy has relationships with content providers that Google does not, O'Donnell says. The articles linked to by Clip & Copy are likely to remain online indefinitely, whereas many of the news links in Google News Alerts expire after a few days or weeks. Data Depth also offers publishers a share of the revenue created by text ads.
These ads aren't coming from the "Big Three," O'Donnell says. (That would be Google, Yahoo, and MSN.) Instead, the ads are being provided by a second tier of search marketers: Adknowledge, ContextWeb, Kanoodle, LookSmart, and Miva. "It's secondary ad networks that have ads that are just as good, but they're easier to work with," O'Donnell says.
At present, generating revenue from these ads means that someone has to click them. That means someone first has to see them. That can be a problem, since ads don't yet appear in the e-mail alerts but only when people click a link to read a full article.
Click-through rates, therefore, would seem to be a big factor in whether Clip & Copy can be successful. O'Donnell says "there's over a 50 percent click-through rate" when one subscriber sends a link to a friend. That's very high -- much better than the subscribers themselves do. "Right now, it's in the 5 percent range," O'Donnell says of subscribers clicking the links in each alert. "They click one a day."
The next stage for Clip & Copy, O'Donnell says, is to integrate text ads into the news alert e-mail messages themselves. But for now, the alerts remain both free of charge and free of advertising.
Getting a Service Off the Ground
A better-known precursor to Clip & Copy, Data Depth's content-licensing service called iCopyright, went through a difficult period of adjustment after its start in 2001. The service was licensed in January 2003 to a Minnesota company named Valeo Intellectual Property Inc. Re-branding the idea as VIPClips, Valeo apparently lost its footing and subsequently announced in June 2005 that it was discontinuing all business operations. Data Depth settled with Valeo and recovered the service in September 2005, O'Donnell says.
It's taken almost a year to move the program over to a new Postgres database back end and get the new Clip & Copy site running, O'Donnell says. He's optimistic that his new, ad-supported business model will appeal to a wider audience and be more profitable than his former, license-based revenue plan.
Free News Alerts for the Taking
In its present form, Clip & Copy is ideal for executives who wish to keep up with articles on their company or in a narrow business sector. Because Clip & Copy doesn't yet have "channels" or categories of interest, your news links must be defined entirely by the search string you enter. You can't get local news about New York, for example, by entering new york. You'd get a lot of sports scores and unrelated stories but not much local news.
Instead, Clip & Copy can be most targeted when you enter your company's name or its speciality, assuming that these are distinctive enough to make a good search phrase. The links you receive would be very relevant to you if your company name was something unique like Dakjisoft. The service wouldn't work so well if your corporate name was generic, like the Garage Door Company.
O'Donnell says Clip & Copy will soon have built-in categories to make it easier for subscribers to select news links they want. Approximately 20 to 30 main categories will be offered, with more than 100 subcategories, he estimates.
In the meantime, the cost of the service can't be beat. You might well learn something through Clip & Copy's summaries that would take you weeks to discover by word of mouth, if you ever did.
To sign up, visit Clip & Copy's new home page and select a daily, weekly, or monthly frequency for your alerts.