I haven’t written about Newsvine in quite a while, but I was impressed by the service when I first tried it out during the beta trials last year, and I am even more impressed by how they have managed to grow and yet stay focused on their core principles — and done so while taking only $1.5-million in funding, as Mike Arrington points out. That is a model that other Web 2.0 companies would be wise to follow.

For MSNBC, the acquisition accomplishes something obvious: it allows the news site to incorporate social and community features without having to develop them itself. For Newsvine, it most likely solves the issue of ongoing funding, and gives the site a much larger community to draw from when it comes to interactivity, and more exposure for the writers that the site has developed.

Rex Sorgatz, who is not only executive producer of MSNBC.com but also the proprietor of the excellent Fimoculous blog, has some thoughts about the deal that are well worth reading. As he puts it:

“[Big media] needs fixing, now more than ever. And fixing it is about finding its roots — news as conversation, as a network, as a platform. By reconstituting media as participation, Newsvine suddenly makes news fun and engaging again.”

I have to agree with Rex, who has also worked for big media for a decade or so: big media is hard. It is resistant to change — and even when it does decide to move, it does so at a glacial pace, for a whole pile of reasons. Many mainstream news sites are trying to incorporate more social features, but it’s not something that comes easily, or instinctively. If buying Newsvine can help MSNBC do some more of that, then more power to them.

MSNBC’s story on the acquisition is here, and Mike Davidson’s thoughts on the deal are here. Rafat Ali at PaidContent says that his guesstimate of the purchase price is between $5-million and $7-million, and Richard MacManus has some perspective on the acquisition at Read/Write Web. More coverage and opinion in the New York Times, at Jeremy Wagstaff’s Loose Wire blog (where he talks about the thorny issue of compensation for “user-generated content”), at Newsroomnext and at ParisLemon.

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Newsvine Plucked By MSNBC

The Newsvine model won’t change after the acquisition. They anticipate continuing to operate independently, with content contributors retaining the copyrights to their work.

But now that MSNBC has bought Newsvine, the money becomes an issue. Without its content contributors, who work for a 90 percent ad revenue share, Newsvine may not be the sweet purchase it became for the site’s founders.

Jeremy Wagstaff raised the topic of money in assessing the deal:

But still there’s the nagging feeling that money is being made on the backs of others. If all those producing the work were interested only in wider exposure, then the MSNBC deal is good — lots of opportunities for their writings to be read by a wider audience.

Money is probably of little consequence to most of those using Newsvine. They’re more interested in the satisfaction that comes from "owning" a community. But inevitably money changes the equation: it is that very community, not the site per se, that has attracted MSNBC’s dollars. Should not the community, therefore, be entitled to some of that money?

The official word from Newsvine on its blog stresses the deal helps expand the reach of its content to a wider audience. It’s all about the community.

Co-founder Calvin Tang touched briefly on the community compensation question:

The revenue sharing arrangement we have with users will continue in its present form for the time being. Though, and completely unrelated to the acquisition by msnbc.com, we have been considering making an adjustment to the way contributors are compensated based on suggestions from users.

It doesn’t sound like trickle-down economics will be coming to Newsvine’s contributors. For those who will enjoy the benefit of broader exposure to more readers, and that is a big plus, MSNBC should be able to deliver that.

Well utilizing SMO to leverage traffic is a huge advantage to any campaign and knowing HOW to do this is key. I recently created a post on the possible ranking factors on newsvine.com. I examined what could possibly make a article or seed appear on the home page or sub home page for a given tag. Well I just wanted to say “I did IT!!!”.

See the image below showing where I showed up on newsvine.

So what did it take? Let me tell you the state of my profile before making it to the first page.

1) I had about 10 friends

2) I had about 2 articles submitted with 1-3 votes each and NO comments on them

3) I was a member for less then a month and a half

4) 1 person had added me to their watch list

5) Never made a story popular before

What was special about this article that got me on the home page of technology?

1) One of the most popular and well respected people on newsvine made the first comment and that created my first popular comment.

2) In a short period of time I was over 10 votes.

3) I had a large number of comments. About 10 which is pretty decent for newsvine.

4) The article was interesting and inspired controversy.

Any SMO can take this idea and apply it to other social media sites but its all about determining possible ranking factors for each social media site and doing testing, testing and doing more testing.

Somthing I would like to add is the power of seeds Vs. Articles on newsvine. Doing self promotion is against their code of honor but they do provide an area where you can upload full articles of your content. The difference between both is a seed is more like a “digg” and an article is going to be more like uploading content to article distribution sites BUT with more targeted traffic which could bleed over to other forms of traffic redirection.

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The Eefoof site has a similar approach to other revenue-sharing sites like Newsvine. The site hosts the content and displays ads, and the user who uploaded the content that receives views gets a piece of the ad revenue generated from each viewing.

That may not be enough to topple YouTube, or bypass the video offerings from Yahoo and Google. But it could be another step toward shifting a little power from major content producers to the consumer.

For Eefoof to work, it will have to be very rigorous in its review of uploaded content for copyrighted works. It was one thing for people to place the “Lazy Sunday” video online, but a site that could pay a third party for an infringing work will bring a whole new meaning of the words “legal action” to Eefoof’s creators. (Eefoof does have an explicit policy against such works being uploaded to the site.)

Those creators include Kevin Flynn, one of the people responsible for a viral video called Peanut Butter Jelly Time. That video made it all the way to television, on an episode of “Family Guy.” Flynn and two other techies, Matt Farley and Alex Annese, started Eefoof this year.

The precise revenue share isn’t listed online, but the homepage for the site suggests various splits in an example posted there. Imagine what the Star Wars kid could have earned from such an arrangement.

One potential competitive issue could arise if Google decided to make a similar deal available for its Google Video uploaders. The brand name and advertising reach of Google could make this kind of project work just as Eefoof can.

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Maybe they should have called this session “power to the writers” instead of “Grokking the Big Picture” with its panel of speakers on how syndication is altering media, publishing, and marketing.

Newsvine CEO Mike Davidson said, “Take the typical MSNBC reader…now in the age of RSS, if they had feeds for all of the writers, then people are no longer subscribing to MSNBC anymore. They’re subscribing to the individual writers and that a little dangerous for media companies.”

Technorati’s David Sifry noted how people say, “You know what? Just give me the good stuff,” when it comes to content. “I still think there is enormous power (in traditional media outlets) because I trust that the editors at these organizations are trying to help me understand what is important and saving me time,” he remarked.

So the mainstream media isn’t quite read for the long dark drive/deep hole/quick lime treatment just yet. But the mainstream does need to get creative when it comes to RSS. If they aren’t looking at the issues and trends in media development and RSS then they may “find themselves looking at the tracks after the train’s gone through,” as Sifry put it.

The topic of full text feeds versus partial text feeds divided the panel. Eric Elia of Brightcove favors the full text option from the standpoint of giving consumers a choice in how they get content.

Davidson disagrees with that. He is against full text feeds and sees RSS as a notification tool. Otherwise, “do you want to see Flash ads in your feeds?” he asked. Davidson sees website monetization as being fairly worked out now; removing that content from the publisher’s control can create problems.

To Sifry, feed monetization needs to be worked out further. “To say that this is a mature industry with well understood metrics is an overstatement,” he said. That would be due to how readers pull data and how aggregators work, in that they create some issues with the metrics.

Whether or not monetization is ready, the tehcnology for making RSS more mainstream has been arriving. WhatCounts president/CEO David Geller noted how new versions of browsers and email clients will help this adoption.

He could easily be referring to Microsoft. With the release of Internet Explorer 7, feed support in Office 12 and Outlook, and broader RSS support in the Vista operating system. Love or hate the company, we think they could be the driving factor in truly mainstreaming syndicated content and RSS adoption.

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Stylehive contributors work together to share stores, designers, trends, products and more. They are advertising supported too, which opens up some nice synergies and possibilities.

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Steve Rubel is a PR strategist with nearly 16 years of public relations, marketing, journalism and communications experience. He currently serves as a Senior Vice President with Edelman, the largest independent global PR firm.

He authors the Micro Persuasion weblog, which tracks how blogs and participatory journalism are changing the public relations practice.

Topix.net’s CEO Rich Skrenta listed a number of sites and efforts that seek to “tag, aggregate or community-edit the news.” Digg, Memeorandum, Findory, and several others make his list, along with Topix.net.

Skrenta also noted Gather, the Boston-based outfit that wants to share advertising revenue with its bloggers. Gather picked up $9 million in VC funding according to Skrenta, but the Boston Globe reported that figure at $6 million plus a power forward.

One figure Skrenta cited, $5 million in VC money to Newsvine, has been disputed. Mike Davidson, Newsvine’s CEO, responded to a post by Paul Montgomery on Tinfinger about Skrenta’s blog entry. (I didn’t lose anyone just now, did I? – david)

“As for our funding, yeah, it’s not a 300k seed round, but it’s not $5 million either. Somewhere mysteriously in-between,” Davidson wrote.

Equally mysterious is Memeorandum, about which Skrenta claimed he’s heard “hints” that founder Gabe Rivera has accepted an unknown sum in VC cash. That hasn’t been confirmed anywhere yet, though.

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The site is a marketplace for blog content and they are actively recruiting bloggers by offering them a share of their ad revenue. As with Newsvine, the more popular your contributions, the higher your earning potential.

As the Boston Globe notes, it’s going to be very difficult for these guys to succeed with this model. As I have said previously, a Web 2.0 crash is coming. The online ad market isn’t big enough to support this site. What’s worse, they’re not relying on Adsense. They’re trying to court advertisers themselves. They don’t have the deep pocket corporate backing that Bloglines, Topix, Yahoo and others have to support citizen journalism with a big investment.

Steve Rubel is a PR strategist with nearly 16 years of public relations, marketing, journalism and communications experience. He currently serves as a Senior Vice President with Edelman, the largest independent global PR firm.

He authors the Micro Persuasion weblog, which tracks how blogs and participatory journalism are changing the public relations practice.

Newsvine features the full text of articles from AP, Reuters and other wires as well as links to stories on other news sites. The stories are ranked by the number of votes they get from fellow users. In addition, you can tag stories which are then aggregated onto distinct pages.

The most notable feature of Newsvine, however, is the ability to contribute and aggregate your own news articles at your own personal URL (e.g. steverubel.newsvine.com) and then monetize it. All contributed articles are clearly delineated from the rest of the content. Contributors collect 90% of the ad revenue generated through traffic to their personal domain. The other 10% goes to the person who referred you to join the site.

Newsvine should draw immediate comparisons to Topix.net, which is taking a similar approach. Topix goes beyond Newsvine in that they index blogs while opening pages up to contributors and comments. They also feature many many more categories and sources. (Disclaimer: I am an advisor to Topix.net and they are a client of CooperKatz.)

I like Newsvine, but I think it’s going to run into some trouble. One appeal of these sites is in how they aggregate news. Most consumers will want see the news in some sort of hierarchy of import, rather than by popularity. This is how Topix ranks its articles. For all of the value the community provides, it can also leave us blind to some important stories that may not be too popular. Still, Newsvine is certainly a site to watch.

Steve Rubel is a PR strategist with nearly 16 years of public relations, marketing, journalism and communications experience. He currently serves as a Senior Vice President with Edelman, the largest independent global PR firm.

He authors the Micro Persuasion weblog, which tracks how blogs and participatory journalism are changing the public relations practice.