The first time I met Eduardo Hauser, founder of DailyMe, a new news site that allows you to personalize your RSS feeds, their timing and delivery method, we geeked out about Spock and didn't think twice about it. Geek met geek, and that's how I got to know of his curiosity about this constantly evolving landscape of online tools.
Hauser, a Venezuela native, has been a senior business manager for more than a decade. He began organizing DailyMe in 2005/2006 and launched the Beta version in October 2007. Though he can't write code, he said he knew how to find people who can. His small shop has 16 employees in two offices: Caracas, Venezuela, and Hollywood, Fla., the headquarters.
From Spock, I learned about Hauser's background in law, business and television. He has law degrees from Universidad Católica Andrés Bello in Caracas and Duke University in Durham, N.C. He served as AOL's executive vice president for Latin America, and in various positions with the Cisneros Group, one of the largest privately-held media, entertainment, telecommunications and consumer products conglomerates in the world, according to their Web site. He started his varied career in Venezuela in law. His work in media led him into service on the boards of directors of National Public Radio and the Knight Foundation in the United States.
Eduardo Houser
"I'm sorry you had to read all that," Hauser told me with a humble laugh.
My interest in Hauser was piqued even further as I read about Neil Budde, who in early April joined DailyMe as president and chief product officer. Budde had been the chief of Yahoo! News since 2004. Before that, he was the founding editor and publisher of The Wall Street Journal Online. With that pedigree, why, I wondered, would Budde make the big jump to little DailyMe? More important, who was the wizard behind this new service?
What follows are edited excerpts from my conversation with Hauser and some audio clips from the interview.
I want to begin by asking you more personal questions about your background and how you got started in journalism. Can you talk more about being a Latino in journalism and in technology? You're crossing what we at Maynard call "fault lines" of race, generation and class.
To hear this segment click here:
First of all, I want to make it clear that I'm not a journalist. Someone said to me many years ago that the only difference between journalists and attorneys is one (group of professionals) chose to make money. So briefly, on the professional front, I started out as a staff lawyer in a large conglomerate group called the Cisneros Group. The Cisneros Group owns a television group in Venezuela, and had a policy in their legal staff to essentially rotate people within their different companies. It was sort of their internship program, where the young lawyers were getting exposed to the different stops at the conglomerate. One of my stops was at Venevision. I fell in love with the work I did there. But more importantly, I fell in love with the network did then the legal work at the network. ...
How did you learn all these skills?
I had a fantastic mentor. Gustavo Cisneros was my boss. I had worked in his company since 1988, but between 1992 and 1999 was essentially reporting and working directly with him. That was my Ph.D. in business, baptism by fire. I couldn't have had a better mentor. ...
Do you think it helped that he was also of a Latin American background? What are some of the things you learned from him because he was also from a background like your own?
No doubt. What we had in more than one way is an ability to recognize best practices in the various places where we had experience ... particularly with those regarding agility, nimbleness, the ability to move quicker. ... In the U.S. we were able to combine it pretty successfully. ...
For more on Hauser's experience with AOL Latin America and more on his background listen here:
For more on Hauser's entry into the Knight Foundation and NPR board listen here:
How diverse is your team, in terms of ethnicity, race, gender, age and geography?
It couldn't be more diverse; more so in our U.S. office than our Venezuela office. We have an office in Caracas, where we have seven people who are hardcore coders, programmers, and we have a front office in Florida that does product vision, product management, sales marketing, etc. It's incredibly diverse (in the U.S. office).
So the big question: Are you making money at DailyMe from online content?
The answer is no, not yet. We are making enough money to cover all our expenses. We are a venture-backed start-up and, as a result, we will lose money before we make money. I do believe there is a tremendous potential to make money from online content distribution, be that news or something else. I think what you're seeing in the online economy is a pretty healthy economy. And by that, I don't mean that anyone who publishes anything will make money.
But I think people that people that do a good job of publishing high-quality content stand to make big money. We look at three things at DailyMe. We look at the size of the audience of people who read news online and that, according to comScores [online traffic measuring company] is about 100 million uniques in any given month. That's a pretty large number. Secondly, we look at the level of engagement. If they do stay long, then you have an engaged audience and that's a value to advertisers. Go to a news site: Do they spend 30 seconds or do they spend three minutes? And the answer is that during the month of December, according to Nielsen, that genre of current events and news had an hour and 13 minutes average per user. So far it is a large audience and it is an engaged audience. The third thing we look at is are the fundamental economics of news websites attractive? And the answer is yes. On the one hand we're seeing healthy CPMs (cost per thousand impressions). Advertising on websites can be sold for a lot of money if you have the right mix, the right audience and, yes, it's a big range. You will see CPMs that range from as low as $2 to as high as $30 in some categories. But on average, we are seeing websites sell well into the $10 CPM, and that's a pretty healthy CPM rate. And the other end of that spectrum is can you acquire content effectively, cost effectively? And the answer to that is yes.
DailyMe has an interesting business model that makes syndication arrangements with news source, which supply web/email news services, and you personalize feeds of top news that meet your categories. How do your partnerships work with news sources?
Typically, there are one of two arrangements. We differ from many other aggregators in that we license our content. And that gives us the right to host that content in a DailyMe environment. So when you go to most aggregators, especially RSS readers, they will display the title of a story, you click and you are referred to another Webstyle site. The reason for that is that they import RSS feeds, but they don't have permission legally to display that article on their pages. We do.
Those deals typically come in two forms. Sometimes they're flat fees, and other times they're variable.
Can you give me a range of how much a flat fee would be?
We have 3,200 sources, so they will go from a few hundred dollars per month for sources that don't get a lot of traffic to a couple of thousand for big brands with a lot of traffic. I would be more specific, but more often than not, there's confidentiality associated with those agreements.
How do you monetize this?
On a very granular level you have to make sure you've buying content at a lower rate than you're selling it at. You have to make sure that creating a page is cheaper than what you get for it. And that fundamental equation in news, I believe, works.
There has been some criticism online regarding DailyMe's attempting to get traffic by promoting reprinted articles.
I read that, and there's only one word for it: Nonsense. In all fairness, if you typed DailyMe in a blog search you're going to get several hundred blog results at a time, or many thousand results, and I've only seen that issue come up once. I was actually tempted to engage with that person to see where they were coming from. We are licensing content. We are not trying to take credit away from anyone. We're not re-publishing without compensation. We license that content and have the right legally to do it.
Neil Budde has come on board as the company's president and chief product officer. Why is this significant, and what are the changes now planned for DailyMe?
From a strategic level, Neil is a guy who ran the number-one paid Web site and number-one free Web site of news in the United States, arguably the world. WallStreetJournal.com is the number-one paid Web site, and Yahoo News is the number one-free Web site. So as we make decisions going forward, Neil has already been in rooms where a lot of those decisions have happened. He's been in situations where he's had to choose different options, different paths to take. So from a strategic perspective, having a man on our site that has such an incredible skill set and has had such amazing experience, I think he is very meaningful for us. We're not a legacy media. We are all about understanding what our consumers want, what the trends are and how to satisfy those needs. From a product perspective, Neil will bring some unparalleled perspective in defining what DailyMe will be from now on.
What is the future of news for you, Eduardo, and how will Hispanics/Latinos or minorities shape it?What does it mean that so many start-ups are now taking to news?
The future of news -- I think we're all going in the right direction. You're right, I am surprised myself to see so many start-ups in news. But I think it shows that there's still a tremendous gap to be filled, because the media-consumption pattern is changing in dramatic ways -- for video, for music, for news, for everything. Other industries, like music, like video, have been a lot quicker to adapt. So I think what you're beginning to see are start-ups beginning to create that new product that will reflect the changing habits of the news readers. It's probably going to be aggregated. So I have more faith in the aggregator than I do in the single-source big publisher, even though those currently have the majority of the traffic. I think that's likely to change.
You're going to see the multiple delivery methods that we advocate. I believe that DailyMe is the dove product with broader delivery options. We can deliver DailyMe by regular email, to mobile phone, to the Web. Obviously, we can have it print automatically. We are probably soon going to be featured in a couple of other electronic reading environments. So number one it's going to be aggregated, number two there's going to significant methods of delivery, number three the communities of those services are probably going to play a significant role in making them grow and making them improve.
In the past, what we were accustomed to from a print media perspective -- imagine letters to the editor now being a fundamentally editorial function within these sites. I think the community was pretty unidirectional and unilateral. What you will begin to see, and what Digg has done remarkably, is that it has given the community power in editing and determining what people see. I think that will happen in many flavors. I think Digg is one of many ways in which this will be done. DailyMe will have another approach to give the community tools and power to affect what DailyMe publishes and how.
Increasingly second- and third-generation Latinos are online, something Roberto Suro, former director of the Pew Hispanic Center, writes about. So I'm wondering what you see as the Latino role in what's coming?
Take my DailyMe, for example. My DailyMe might be similar to your DailyMe in that we will both read national news and breaking news and world news and what not. My DailyMe, for example, might have a lot of things that your Daily Me might not have. I read up on my Venezuela stories, I read about immigration reform, I read about Hugo Chavez and Cuba on my DailyMe. So I believe that giving me, the reader, the ability to co-locate mainstream stories with specific interest stories is of tremendous value. That's from the perspective of the user. Let me switch sides for a moment and put myself in your shoes.
Now you're a publisher, right, a writer on this topic. Very soon DailyMe will allow for the disintermediation, just like blogs have or RSS feeds have, will disintermediate you from me. If I want to read about you, then I can add your content with your permission to my DailyMe. I think that process has started. There are probably people you follow on their blogs already. The problem is that if you have five, then you have to go to five different places to read them. Or you need to have the technical ability to configure an RSS-reader to import them and you're still going to be going to their blogs. I think what we're seeing is a very early stage of a more effective way of aggregating content into a single format, be that one website, one email, one electronic reader, etc. I see news being more aggregated than single-source, multiple-delivery mechanisms, personalized. I see that minority and smaller communities are going to flourish in this environment.
But there's two schools of thought on this. I have met people in different start-ups that say news should not be personalized because there's no money there.
Look, there's people who don't think news should be personalized for more than economic reasons. There are two schools of thought. There are people who think personalizing news hurts the news consumer. I don't believe that, obviously. They believe that if you personalize your news, you'll miss out on other important news that you read by accident. And I'm of the opinion that if that is true, then the government should prohibit (television) remote controls. Democracy and media began with a remote control, not with personalized news. It doesn't matter what it is, if you're reading a newspaper, if you don't like the headline then you're going to jump to the next one. How is that different? Where I see a risk -- and I think originally the misconception was that there will be narrower choices of sources. And that's not the case anymore. In other words, if you only read or watched -- and again I am using this as an example, CNN or Fox News -- then you would have this slanted view of the world. The fact is that if you put a keyword in DailyMe about Barack Obama, we're going to publish stuff from 3,200 content sources. So you're simply going to be tracking a topic that matters to you and you'll be able to read about the topic from as many perspectives as we can find.
So your product is increasing access to multiple perspectives?
