A significant move happened in the online publishing world this week and it is a sign of things to come for any online publishing company that is burning money managing their own hosting operations.

Newsweek.com announced this week that the site is outsourcing its Web site hosting duties to Amazon, joining a small but growing number of companies experimenting with cloud computing.

“Until now, Newsweek.com had been hosted by its parent company, The Washington Post Co. The media company has been trying to cut losses at its magazine division, which recorded $29.3 million in operating losses in 2009. By joining the cloud, Newsweek expects to save close to $500,000 annually.

“It saves Newsweek money,” said Geoff Reiss, vp, general manager, Newsweek Digital.

“Lots of people out there built their own infrastructure and are going to be tortured by this idea of sunk costs.”

Kontexto started using Amazon Web Services in early 2008 and now our whole real time content analytics platform is built on the Amazon cloud. We have always been lobbing the idea around of launching a cloud based news infrastructure that takes care of everything post publishing including storage, search, delivery and analytics. Give the CMS and editing freedom to the content creators, but hand off everything else.

After newsweek.com, it is hard to say who will be the next to transition hosting to the cloud. Some other certainly have without announcing it. But it is good to see a brand name publication make an organizational shift to the cloud.

Full jump to Mediaweek article

Short post, but this is an article worth reading if you are interested in how a legacy print magazine is trying to fit into Bloomberg, a real time data organization.

Bloomberg is in the business of selling data terminals and everything else supports that cause. They are damn successful doing this and pride themselves on being the most influential news organization in the world. True or not is up to you, but they do produce news that moves markets.

I have picked out some points from the article and will share my brief thoughts on them, as they capture some broader themes we are seeing emerge across the online publishing world namely:

Profit - News needs to have a profit motive

AND

Measurement - Everything can be measured in the news creation process

Some other points from the article:

1. News should help people make money. Whether the creator of the news or the consumer of the news, there is a profit motive. If news makes money, then everyone is happy.

This flies right in the face of everything taught in Journalism school and the Businessweek staff that did not buy into this philosophy were shown the door or remain at Bloomberg and are adapting.

2. Bloomberg operates a “speed desk”, with the sole purpose of quantifying how much news they get out first and if that news makes people money.

I think this philosophy can be taken all the way down the chain from global news providers like Bloomberg to hyperlocal news providers. If you get more content out before your competitors (speed), you will build a loyal audience for that.

3. Every Bloomberg writer has a “dashboard” where the metrics determining his compensation — any scoops, hits an article attracts — are tracked.

This is precisely the type of feedback and support that content creators need and can use to their advantage. There is a real resistance to measurement in the newsroom, but it is going mainstream and it should be embraced as a positive not a negative. Staying employed, building an audience and improving the success of your content choices seems to be a reasonable plan, real time metrics can help you do this.

4. This is an angle I had not considered… the psychological impact over time on individuals of creating content that does not make money. As put by a former Businessweek employee about his colleagues… “They really feel like writing for Businessweek is a waste of time — it’s not making money, they get nothing out it,”

People are generally happier when they are making money and if metrics and data can help you to make your content more profitable then you should embrace it.

An interesting piece from The Atlantic magazine last month that I have been meaning to post about entitled Cut This Story!…Newspaper articles are too long.

It is one of the first semi-mainstream articles I have come across that deconstructs an article into a collection of assembled words. And in the authors opinion, all too often articles have way too many words that do not add any value to the story at hand.

The value of a word, a collection of words, an article and even a publication is in the eye of the beholder, so I am not going to rehash this authors take on things. You can read the article and see some interesting examples he uses of wasted words.

What I would like to highlight is the last passage of the article, which in my opinion addresses the actual business case of deconstructing stories using the “cost of words” (measurable) versus the “value of words” (subjective).

“On the first day of my first real job in journalism—on the copy desk at the Royal Oak Daily Tribune in Royal Oak, Michigan—the chief copy editor said, “Remember, every word you cut saves the publisher money.” At the time, saving the publisher money didn’t strike me as the world’s noblest ideal. These days, for anyone in journalism, it’s more compelling.”

It is interesting (for me at least) to think of news publishers as speculators whose job is to invest in words. Sometimes you go long and sometimes you go short. The trick is to be long or short on the right things. Whether investor or publisher, that challenge remains.