Wot’s news?

Today on Lunch with an Entrepreneur, Amanda Gome talks to Richard Slatter, the general manager of news aggregator Wotnews.

News aggregators are themselves in the news, being accused by publishers of making money from other content creators. Slater answers the critics, explains how technology is changing the news sector, why large publishers have their heads in the sand and what’s ahead for Wotnews.

Amanda Gome: Now Richard, you’re 40. You started off in web development and ended up at Deloitte. Why did you leave Deloitte to join an online start-up Plugger?

I thought it was a great opportunity. I was at Deloitte for a couple of years, working in the Eclipse group (now Deloitte Online Services). I’d worked in web and in smaller web agencies for years prior to that, which is where I met my business partner Stephen Phillips, who conceived Plugger in January 2007.

He and I had worked together through the sort of dotcom days, providing services to large Australian blue-chip companies that were entering the web for the first time but also some start-ups, some of which were relatively successful and still around today.

And Steve called me and said: ‘Hey, you know I’ve got this idea and I think there’s something in it. Why don’t you come onboard and we’ll actually build something ourselves this time, rather than just working for clients.’

So when Plugger started off, what was its niche and how has that changed over time?

Steve, a programmer, came from a traditional market research background and he had written multiple marketing reports for clients looking at markets and sectors and doing analysis, and had always found that the news is a rich source of very current market intelligence.

The problem with the news is it’s quite unstructured; you have to actually read a lot of it to really get a sense of what’s going on. So we just thought, ‘Oh I’ll write myself a bot, which will allow me to define the sorts of news I’m looking for, that will help me in my research and will bring me back this shortlist of stuff that I should be reading’ and we just found it very useful.

So we then showed it to a few friends and colleagues who said why don’t you throw that up on a website and let other people use it. Which is what he did in early 2007 and was surprised to see how much people, once they found it, started to use it.

But the other interesting thing was just how quickly the Google bot picked it up and started indexing the pages and I guess it just stumbled upon a kind of search engine marketing play there that would allow him to have a site that was actually useful for people but also for people to find it through Google.

How has it changed from that?

The global economic crisis, the entrance of new technologies and new innovative, smaller businesses in the news arena that has been for a long time dominated by very traditional players, who I guess had very healthy balance sheets prior to late 2007.

Over the last 18 months a lot of major companies have come under pressure. As a result we have these sorts of statements and investigations by Murdoch and people over at News.

Lots of other large news organisations are trying to figure out how do we stop losing money, how do we start making money from the news and from the great stuff and the great content they do online? I suppose those things have perhaps changed the environment since we started and that’s all good stuff.

Well, how are you changing then? Your revenue model I presume is to put ads against news aggregation.

I’m glad you asked me that question because that’s not our revenue model.

I assume it is going to be.

When we first started we said if that’s the best idea we can come up with as far as generating revenue, then we should try and think a little bit harder.

We appreciated from the moment that we started the sensitivity in potentially putting ads against headlines and snippets of content that are derived from other publishers.

Now I think realistically the jury is a bit out on whether you’re legally within your rights to be able to do that. And there are loads of examples of other aggregators doing that in the States. We don’t do it because from day one we invested in software and technology and that’s essentially what we are.

We’re not a media company, we don’t sell ad space and we don’t sell eyeballs to advertisers. We’re a software company, we build technology and we experiment with ways of presenting news in different ways that we thought perhaps we could actually partner or work with or sell something to large publishing organisations to help them to create richer, more contextual news experiences to keep users on their sites for longer, in order to then deliver more value back to advertisers.

So we thought if we plaster ads against everything from day one that’s probably not the best footing to start off with if you’re trying to build relationships with publishers who could be competitors.

So you’re smarter than Google?

I don’t know, I think Google’s in a completely different position in that they can afford to potentially not tip toe around other businesses, other organisations as much. I mean we’re a smaller player and we’ve had to think of ways of doing things differently than Google or other aggregators.