It's blogging time!

Blogger's Note: It's blogging time!

Online Extra: Six Tips for Corporate Bloggers
You can't afford to miss this wave -- and even more important, you can't afford to do it wrong Blogs represent an explosion of information, from inside and outside companies. Those who figure out how to mine this treasure while protecting their own gems will fare just fine in the new world. But it's a risky world, full of hazards. Here are six tips for companies setting out into the blogosphere:

No. 1: Train Your Bloggers
Who's on your communications team? It used to be a small group, but now everyone who blogs at the company is spreading the message. And it's important that these people be trained.

If a company blogger spills financial information, it can get you in hot water with regulators. Other leaks could help competitors or lead to embarrassing revelations about top executives or the workplace. No wonder many companies are worried about blogging. "They're really scared of it," says Giovanni Rodriguez, a vice-president at Silicon Valley's Eastwick Communications. "They know what mistakes can be made."

The natural instinct is to restrict employee blogging. But that can be shortsighted. Every employee who blogs can be making contacts with potential customers and enhancing the company brand.

If bloggers become part of a company's communications effort, what does the old PR department do? Increasingly, it'll train and coordinate the bloggers.

No. 2: Be Careful with Fake Blogs
Companies are eager to establish one-to-one links with customers, but they're often reluctant to plunge blindly into the blogosphere. So they set up fake blogs. These are blogs that are created by corporate marketing departments to promote a service, product, or brand using a fake character or name. McDonalds (MCD ) established one and linked it to a Super Bowl commercial featuring a peculiar French fry. Captain Morgan runs a rum blog.

These pseudo-blogs are risky because many of the most passionate bloggers view them as an affront to their community, and each one stands out like a billboard in Yosemite. When the blogosphere gets hold of a fake, it can turn it into a public roasting of the company.

So should companies avoid fake blogs altogether? That's hard to say, because sometimes the buzz is welcome, even if it's negative. Following the launch of the McDonald's site, bloggers booed. Yet a McDonald's spokesman says the blog, which received more than 2 million visits, "was keeping the ad alive. It generated a lot of great buzz."

The upshot: Your choice on fakes, but the risks are high.

No. 3: Track Blogs
This is the easiest and most important step. First, poke around online and find the most influential bloggers following your company. Read them every day. Then do automated tracking of discussions. Companies ranging from startup PubSub to tech giant IBM (IBM ) can help, since they offer services that comb through this mountain of data, turning it into market research for customers.

Big Blue is testing advanced technology called Web Fountain, which analyzes billions of postings to see if they predict spikes in consumer behavior. Last year, Web Fountain plumbed the blog world for buzz on books and then compared it to sales data from Amazon.com (AMZN ). In about half the cases, researchers could predict the sales growth that would follow the buzz.

Why is it important to do different kinds of tracking? Postings even from small-time bloggers can get picked up by a search engine, amplified by a top blogger, and eventually break into the mainstream. Last summer, blogs picked up an anonymous post in an online discussion forum from someone who boasted he could break Kryptonite bike locks with a Bic pen. Within a week the story had bubbled up to The New York Times, and Kryptonite recalled the locks.

No. 4: PR Truly Means Public Relations
Blogs knock down the barriers between a company and its customers.

Businesses need to take that into account and adapt. Some companies, such as yogurt maker Stonyfield Farm, start blogs to build loyalty and address people's comments and concerns. For businesses that don't set up corporate blogs, pinpointing and developing relationships with the top 10 or so influential bloggers in their area is key.

Netflix (FLIX ) figured this lesson out after a rocky start. A fan named Mike Kaltschnee started a blog called Hacking Netflix that was full of news about online movie-rental company's services. Kaltschnee asked for a closer relationship with Netflix, including access to executives and briefings on news releases. Netflix didn't pay attention to him -- until he wrote about his frustrations on his blog last June. The posting was picked up and spread madly through the blogosphere. Talk about bad PR.

At about the same time, Netflix hired Michele Turner as vice-president for product marketing. She promptly reached a working arrangement with Kaltschnee, whose blog attracts 100,000 visitors a month. The two speak regularly, and Kaltschnee provides Netflix with insights that he's hearing from readers.

Kaltschnee's suggestions have helped lead to a new service called Profiles. Launched in January, Profiles allows customers to create up to five separate lists of requested films per subscription. So, a family with a subscription could have separate lists for the children and the parents.

No. 5: Be Transparent
No hard and fast rules for navigating the worlds of blogging and marketing exist. Still, a few principles are emerging, including the importance of full disclosure. Being open about the kind of marketing you're doing is critical.

Ask Stephen King, the president and CEO of Marqui, a Web-services marketing company. Late last year, King and consultant Marc Canter cooked up the notion of paying bloggers to market King's company. The key to the venture's success was being completely open about it.

In November, Marqui began paying some 20 bloggers $2,400 each to write about the company once a week for three months. "We're a small company selling what we believe to be a creative marketing tool," King says. "We wanted to take creative approaches to the market."

Here's how Marqui ensures openness. Everything about Marqui's blog program is up on its site, including the contract, a list of the bloggers working for Marqui, and background material Marqui sends to bloggers. The bloggers have total control over what they write. They can criticize the software or write at length about it. The only requirement was they have to mention Marqui once a week.

The program stirred up a hornet's nest online. But the discussion didn't center on Marqui's intentions. Instead, the bloggers debated whether this kind of program made sense and under what circumstances. Molly Holzschlag, a Web designer who was part of the program used her blog, www.molly.com, to discuss the issue as well as do the blogging. Holzschlag ultimately decided to stop blogging for Marqui because for her it felt forced.

Yet Marqui benefited from the buzz about the novelty of what it was attempting. King says the program was a success. The number of people who visited Marqui's site rose from 2,000 in November to 150,000 in December. And the company decided to continue the program after the first three-month period ended.

No. 6: Rethink Your Corporate Secrets
Consider one secret you have under lock and key at your company. Maybe it's a list of projects for next year or details of the scandalous bill from the latest software installation. There are all kinds of things you're trained not to leak to competitors.

But what's the value of a locked up secret? In the world of blogs, you may find more value in sharing what you used to think of as secrets. Blogs are certain to make you rethink what should be squirreled away, because companies are increasingly sharing such information to win new partners and harvest fresh ideas. This doesn't mean they don't keep secrets or that you shouldn't -- only that you should reevaluate whether you can get more out of sharing information or keeping a lock on it.

Take the example of San Francisco's ThinkEquity, a boutique investment bank. In recent months, CEO Michael Moe launched a blog in which he shared information, including preliminary research, that used to be more hush-hush.

Moe now looks at the blogosphere as an enormous research tool for the nascent industries ThinkEquity focuses on. Whether he blogs about nano solar technology or an obscure niche in biotech, experts abound in the blogosphere, and they contribute their knowledge. "We're in the experimentation phase," says Moe. "But I'm convinced this is part of the future for research."

ThinkEquity not only shares loads of information that used to be private but is figuring out how to cull insights from a wide range of bloggers -- some unreliable, a few of them liars. But Moe says the extra work involved in writing and figuring out which blogs to follow is worth it. "I sure as hell didn't want to wake up some morning and find out that some other investment bank was doing it," he says.

ThinkEquity is just one of the companies finding that a few of its secrets are worth more in the open than gathering dust in a strongbox.

By Stephen Baker and Heather Green in New York
MAY 2, 2005 , www.businessweek.com

Blogging: A Primer

JOHANNES GUTENBERG
This 15th-century German devised technology to manufacture books. Gutenberg failed as a businessman and died poor. Yet his printing press, involving movable type, gave birth to mass media -- a world in which a handful of publishers can reach audiences of millions. That model is under threat today.

MOBLOGGING
Posting to a blog on the go, from a camera phone or handheld device. These postings can be random or tied to news, such as pictures of the iPod Shuffle when it was launched at Apple Computer's MacWorld, or the birth of a baby.

VIDEO BLOGGING, OR VLOGGING
Video blogging, where individuals and companies post video diaries online, began to take off last year. The trend is spurring the revival of online video distribution, the use of vlogs to sell ads, and the designing of corporate blog sites. Microsoft's Channel 9 video blog, set up in April, helps the company communicate directly with its all-important developer community.

PODCASTING
The nascent technology allows individuals to create their own radio shows and deliver them automatically over the Web. They can be played on computers or any mobile devices, such as the iPod (hence the name). Although they were created by bloggers and propagated by the blogosphere, the Establishment is jumping in. In April, Paris Hilton announced she would do podcasts promoting her new movie, House of Wax.

RSS
Really Simple Syndication is a snappy way to track blogs. Individuals sign up to have updates sent automatically to their computers, making it convenient to follow blogs. Around 6 million people, or 5% of the U.S. online audience, use RSS, according to a Pew survey. Companies such as Yahoo! and Associated Press are adopting RSS to keep audiences loyal and to attract new users.
DOOCED
An expression used when someone loses a job because of blogging. This happened to flight attendant Ellen Simonetti at Delta Air Lines. Firings can occur when a company finds an employee's post questionable or too revealing about sensitive data. Where does the name come from? Heather Armstrong, who lost her job because her Web site, dooce.com, included stinging satire of her former employer.

CITIZEN JOURNALISM
Eyewitness or investigative reporting by a blogger adds new insight to events not covered by traditional media. Examples: Early personal accounts of the tsunami in December or digging into the authenticity of memos used by CBS's Dan Rather in his report on President Bush's National Guard duty.

MAINSTREAM MEDIA OR MSM, ALSO CALLED LAME STREAM MEDIA
Any publication, radio station, or TV news channel that doesn't recognize the power shift created by the blogosphere and doesn't adopt blogging. The MSM are derided by bloggers for lecturing and adhering to what they call false objectivity.

FAKE BLOGS, SOMETIMES CALLED FLOGS
Fake blogs created by corporate marketing departments to promote a service, product, or brand. The flog's writer often uses a fake name. Derided by bloggers, fake blogs are an increasing trend. McDonald's created a flog to accompany its Super Bowl ad about the mock discovery of a french fry shaped like Lincoln, while Captain Morgan created a fake blog in March for its Rum drinks.

CREATIVE COMMONS
This nonprofit has devised a copyright system that allows creators to be more flexible in allowing others to use their works. This is important in the grassroots blogging world, since it encourages people to publish video, podcasts, and photos online that others can add to their blogs. Online photo service Flickr, co-founded by Caterina Fake, encourages subscribers to share photos using the Creative Commons licenses.

PAID BLOGGING
Unlike bloggers who simply put a banner ad on their site, paid bloggers write about a product or issue. This has created controversy about whether bloggers need to disclose that they are being paid and whether the practice damages their credibility. Upstart Marqui paid 20 bloggers $800 a month for three months to promote its Web marketing services, while Republicans and Democrats paid three bloggers during the recent elections.

MICRO-NEWS
Blogs devoted to extremely niche topics. When Lockhart Steele started a blog chronicling restaurant openings and new building construction in his rapidly changing neighborhood on New York's Lower East Side, he quickly found an audience -- and advertisers, including the New York Times real estate section.


Online Extra: Stonyfield Farm's Blog Culture
The yogurt-maker's CEO Gary Hirshberg and Chief Blogger Christine Halvorson on how the Web journals connect them to customers Stonyfield Farm, 85%-owned by France's Groupe Danone, is the largest organic yogurt company in the world. Based in Londonderry, N.H., Stonyfield took to blogging in a big way last year -- and even hired its own blogger, Christine Halvorson. A former journalist and almanac writer, she landed the job a year ago in March and now authors five blogs for Stonyfield, including Strong Women Daily News and The Bovine Bugle. Stonyfield CEO Gary Hirshberg and Halvorson recently spoke to BusinessWeek's Lauren Gard about Stoneyfield's move into the blogosphere. Edited excerpts of their conversation follow:

Q: How did you get started on blogging?
Hirshberg: Before the New Hampshire primary, my wife, Meg, and I got really involved with Howard Dean. His assistant, Kate, had been his blogger. There was a party one time for 150 people, and Howard came. Everyone was excited to see him, but when Kate walked in you could hear the buzz. As a guy interested in building brands and in particular building through unconventional means, I was really intrigued by the kind of immediate intimate connection created by blogging. The more I got into it, the more I realized what they were doing in politics was exactly what I'd been doing in business, by having notes on cups and lids, etc. From 1983, when we were still milking cows, we would write "Let us hear from you" on the back of the yogurt container.

Q: What we you looking for in a blogger?
Hirshberg: We wanted somebody who could speak as you and I are speaking right now. And being a lunatic -- which is what I am -- I had to do five of them. We're really about building loyalty. Coke (KO ) and Pepsi (PEP ) spend millions of dollars to essentially win your attention. In our case, there's no way we could ever compete with a media-based advertising effort -- we would simply lose. So it has been essential for us to instill a word-of-mouth effort. Blogging is the logical next step. I wanted somebody who was interested in humor and nuance.

Q: How long was your search?
Hirshberg: Not very long. We're fans of Monster.com, and I'm fairly sure that's how we found Chris. We did have four or five people come in. It was not at all a prerequisite that candidates knew what blogging was. Half of the people on my marketing team didn't know what a blog was, they were just following and humoring their lunatic CEO.

Q: What would you tell companies who want to start a blog?
Hirshberg: I'd say two things to BW readers: One, if you're going to go into this as a marketing device, be careful. That's not just what it is, and if you treat it that way consumers will see through it. You have to be willing to let go and allow a really honest expression of genuine things that are going on. Second thing I would say: Don't use it to sell. The minute you start selling with a point of view instead of having a chat, you're going to lose people.

Q: What are you getting from this, really?
Hirshberg: It's impossible to say what we're getting. But if you press an ad agency really hard about their best ads, their best copy, and ask them to prove that that ad resulted in an increase in sales, it's the rare case when you can spell out cause and effect. But what I know in my gut from 22 years of doing this is that we have an emotional connection with customers. That helps explain why we're growing at four times category rate in some markets and three times the category rate nationally.

Q: Can most companies benefit from a blog?
Hirshberg: If it's done properly, I can't imagine any company that wouldn't benefit. IBM (IBM ) [has been] in the news because of their computer division being sold to group of Chinese companies.... This could be a huge brand opportunity if the CEO decided to just start blogging about the experience he or she is going through, what led them to decision to sell, what's good and bad about it. I bet you millions of people would tune in to what's really going on. The problem is, especially in the litigious nature of our culture, we've become so defensive, so on guard in protecting what we're thinking.

Q: Had you heard of blogging before you started this job a year ago?
Halvorson: I knew what blogs were and had read some out of political interest, but had not blogged myself.

Q: You bring up controversial subjects, including religion and politics. Do you worry about offending people?
Halvorson: I don't worry, and I don't think Gary does. We know we're talking to a committed audience that loves us in the first place, because they've already found the Web site. Somehow we're managing to sell 18 million cups of yogurt a month.

Q: Do you follow up on the comments readers leave behind?
Halvorson: We just let them stay out there and let readers respond themselves. If people get a fact wrong, I will try to clarify. But I don't think that has actually happened.

Q: How do you find items to blog about each day?
Halvorson: I have great fun doing that. I spend between four and six hours every day doing something with the blogs -- researching and writing new entries and posting them. There are certain topics -- women's health, children's health, efforts to ban junk food -- that I stay on top of. Google (GOOG ) news alert sends me any news stories on those topics. I also do a little bit of original reporting.

Q: What's your title?
Halvorson: My title is chief blogger -- company gossip. We've been at this since March of last year. People at the company will see me coming and say "Oop! The blogger's here." It's a really good thing, because people will tell me things that work for the blog.


Online Extra: New York's Real Estate Know-It-All
Lockhart Steele's Curbed.com blog is a magnet for anyone looking for the lowdown on the industry's Gotham gossip Brokers might tell you about the two-bedroom co-op boasting panoramic city views from Lower Manhattan's 275 Water St. But for the inside scoop on the developer who may be floating plans to erect an eight-story building next door, potentially obstructing that view -- and wreaking havoc on your property value -- turn to Lockhart Steele. His Web log, Curbed.com, dishes the dirt the brokers don't. "In our special little city," writes Steele in a post on the property, "today's vistas are often tomorrow's brick walls."

Steele, 31, has made a fledgling business out of an obsessive hobby: collecting New York real estate gossip. His blog details Gotham's neighborhood secrets -- from where the city's largest rats are (reportedly in Brooklyn's Fort Greene section) to the future of the Apple Bank building on the Upper West Side (it may be going co-op). The tidbits he gathers often rankle realtors. Jonathan Phillips, for example, who represents 275 Water St. for Halstead, says brokers don't misrepresent properties, and he's quick to point out that Steele never contacted him for comment.

But disregard for traditional media mores is in keeping with bloggers' craft. Steele never claimed to adhere to the standards of old-world journalism. Rather, he bills himself as a scavenger. He culls through 150 other blogs and dozens of readers' tips daily to update his blog, posting photos, rants, and queries. The onus is on readers to shape the conversation by sending him tips, notes, and responses.

TARGET DEMOGRAPHIC. Steele's blog has become a must-read for real estate purveyors and enthusiasts alike. Since Curbed.com launched in May, 2004, its traffic has grown to a million page views each month, leaving businesses clamoring to advertise.

"It reaches the right audience," says Daren Hornig, president of residential real estate company DwellingQuest. Hornig reads the site daily and frequently sends Steele tips to post. They're right now negotiating an ad deal. The New York Times's real estate section became Curbed.com's first paid advertiser when it began running a banner on the site Mar. 24.

As part of Steele's professed get-rich-slow scheme, he left his day job as an editor at luxury real estate magazine Cottages & Gardens on Jan. 31 to become a professional blogger. Since Curbed.com is still far from profitable, Steele took a job with the blogosphere's most successful business prototype to date, Gawker Media. Its sites commanded 35 million page views in March.

PHISH HEADS. As its new managing editor, Steele oversees 11 Gawker blogs, including New York media gossip site Gawker.com and the Washington news and gossip blog Wonkette.com. Gawker Media is not a big-budget operation, but publisher Nick Denton is able to pay a small staff to keep sites up and running, and he hopes to launch six more this year. A big perk to a job with a less-defined schedule, says Steele in his characteristic fast-paced banter: "I get to devote a lot more time to Curbed.com this way."

A sandy-haired guy with large blue eyes and a prominent nose, Steele has nurtured an entrepreneurial spirit since his Brown University days, when in 1995 he collaborated with classmate Andy Bernstein to self-publish a book on the rock group Phish. The pair called their masterpiece The Pharmer's Almanac. Five editions later, they sold it to Penguin.

Upon graduation, Steele headed for New York where he has spent the last decade working in startup media ventures -- from newly launched magazines to dot-com projects since gone bust -- before landing a job with Cottages & Gardens Publications three years ago.

PLAN OF ACTION. Steele has been blogging for five years now. On his personal blog, Lockhartsteele.com, readers will find photographs from a recent vacation, a link to the lyrics of a favorite Christmas song, and endless chronicles of the Lower East Side. These latter posts -- restaurant reviews, overheard remarks, development plans -- attracted an early following, giving Steele the idea for Curbed.com.

Unlike his personal blog, Steele began Curbed.com with a business plan. Early on, he enlisted Alexis Palmer, a high school friend from Vermont's St. Paul's Academy, to manage the marketing side. With a Harvard MBA, Palmer is a finance person by day. Each night she spends several hours on Curbed.com work: developing a marketing strategy, putting together press kits, and incorporating the site as a small business. Meanwhile, Steele develops the site's editorial voice.

A journalist by training, Steele is emphatic about making the distinction between Curbed.com's content and traditional journalism. "I don't have time to do the fact-checking you do," said Steele of BusinessWeek's traditional journalistic model. Sometimes this leads to problems.

BIG OOPS. Case in point: Last fall, after receiving a tip from another blog, he reported that a Williamsburg man was advertising phony memberships to a bogus gym. Curbed.com had broken a similar authentic scandal earlier in the summer, also from a reader tip. As it turned out, no scam existed this time. The gym owner, a legitimate business operator, sent a furious letter to Steele. "What can you do?" Steele shrugs. He added a correction to the faulty post immediately and put up an apology along with the letter.

This combination of hot insider news and just plain wrong information defines much of the blogosphere. "People trust blog posts more because they sound like e-mails from a friend," says Steele. But he puts the responsibility on readers to read "with your eyes open."

This attitude has troubled some, and Steele has even had an angry broker threaten to sue him over a posting she believed reflected negatively on her. A powerful lawsuit could quickly bring down a shoestring operation like Curbed.com, but Steele has a power card to play as well: "I just told her, look, if you sue me, I'll post about it on my blog." With so many of the broker's customers reading Steele's site, that could pose a real threat to her reputation.

STILL RENTING. While Steele describes Curbed.com as a money-generating hobby, he would like to eventually see a hefty profit. With an equal mix of ambition and bemusement, he says candidly that he hopes to make five figures by the end of the year. With barriers to entry extremely low -- the cost of his domain name, site construction, and logo totaled just $2,000 -- he has only time to lose.

As for Steele's personal real estate endeavors, Curbed.com has yet to score him any personal property perquisites. He continues to rent the same Rivington Street one-bedroom apartment he has occupied since spring, 2001. Says Steele: "I got a good deal." He should know.

By Jessi Hempel in New York