Aol Seeds New Journalism Model, But Will It Make Journalism Wither or Flourish?

By far the most head-turning story in a morning fairly full of them was the unveiling of Aol’s new, uber-efficient journalism model by CEO Tim Armstrong. I’ll go into details in a minute, but here are its ingredients:

• 2 cups Google-like algorithms to determine popular content
• 2 cups advertisers who want to appear next to that content
• 1 tbsp. eBay
• 1/4 tsp. Aol’s in-house editorial staff
• Infinite amount of starving writers.

The plan, reported in The Wall Street Journal today, (and happily enough, redistributed, with analysis, by free sites), calls for Aol, through a project called Seed, to create one hell of a newfangled marketplace for journalism and advertisers, using principles borrowed from Google and eBay to determine the value of everything associated with it. Algorithms will determine the topics the content-consuming public wants to know about most, which probably means, on a day like today, that there’s a crying need for stories about Tiger Woods, or Zhu Zhu Pets.

Journalists, or would-be journalists, would bid for the right to write stories using a reverse-auction system, in which the lowest bidder “wins” — and I use that term more loosely than it has ever been used in the history of mankind. Aol’s in-house editorial staff, numbering a pre-buyout 3,000, will manage the incoming content, and kinda sorta like they do in search, advertisers will decide which content they want their ads to appear against. (Yes, there is a promise of church-state separation, but the proof on that, I’m sure, will be in the pudding.) The plan also includes the opportunity for journalists to be paid by performance, i.e. traffic, which may come as a shock to some already within the organization, who sniffed at my assertion at a conference recently that journalists should bear some responsibility for their traffic.

I have no idea whether Armstrong’s idea will work, but here’s why it’s smart. Online publishing, like every business, is all about margins, and these days those margins, if they exist at all, are very, very slim. The Seed plan takes care of the cost side of the equation by playing on the sad fact that most writers will write despite the lousy pay — even allowing them to bid down what their labor is worth. I certainly hope the lowest possible bid isn’t $0.

Meanwhile, the model’s reliance on algorithms to decide which content deserves to be created has the potential to maximize the revenue side because it will not only goose traffic but also unearth the worth of particular content to advertisers. As the online publishing world has been decimated by ad networks, which rely on selling bulk demos at scale to advertisers with little regard to premium content, the ability to charge around good content has, in many cases, fallen apart. Put cheaply-produced popular content together with a revenue model built around traffic and content, and voila! You’ve suddenly got a margin!

You’ve no doubt detected a note of cynicism throughout this whole post. Like many writers, I worry about the future of the business that I love. There is obviously no doubt that change is upon journalism, and is probably on it way to taking it over entirely. I feel fortunate to have thus far been able to manage the change relatively well in my own career — but the sentimental part of me hates to see the devaluation of my craft, and I fear that a construct like the one under way at Aol could be a big step in that direction.

Previous coverage of Aol at BNET Media:

• Should Online Journalists Bear Responsibility for Their Traffic?
• The New AOL: A Lean, Mean Byting Machine
• AOL’s Tim Armstrong on the Value of Premium Online Content
• AOL’s Business Model: “High-Quality Content to Scale”