The most important stuff first: As for Buzz’s implications for journalism, the two best quick guides are by Will Sullivan at Poynter and Google-watcher Jeff Jarvis at BuzzMachine. Jarvis sees Buzz as a major step toward the “hyperpersonal news stream” that Google’s been visualizing and magnifies the value of voice and local news. Sullivan focuses largely on Buzz’s impact on adding the element of location to news and advertising. (The local media site Lost Remote touches on this, too.) By the way, I’m with Sullivan on this — I think Buzz’s greatest impact on journalism may be as an incremental step in the development of mobile news, a sort of early bud in the ecosystem location-based news.

The initial response from the tech crowd tended to be negative. RSS and blogging pioneer Dave Winer declared it a dud, and PR exec Steve Rubel called it “Google Wave light, a non-starter.” Others saw major privacy issues with Buzz revealing your email contacts to the world, though Google gave us a fix Thursday afternoon.

Much of the discussion around Buzz, though, was about which social network it will or won’t tear into. Before it launched, it was called a “Twitter-killer,” and DigitalBeat countered that it wouldn’t kill Twitter, while telling us what role it would play. (Meanwhile, Dave Winer opined on what a social-media platform would have to have in order to kill Twitter.) Several others noticed its similarity to Facebook, and in a smart post at The Big Money, Chris Thompson explained where it might have an advantage. And at the tech blog ReadWriteWeb, Frederic Lardinois has a great list of improvements Buzz could make.

Demand’s plan for publishers: Four months after Wired brought the business model of online content producer Demand Media to light, the conversation about the company remains on a slow burn. We’ve been hearing lately from several Demand execs; most newsworthy is the revelation that Demand is experimenting with several major publishers and plans to move into the business of selling their original content to supplement publishers’ websites.

Why does this have people worried? Because Demand Media is being held up as the poster child for so-called “content farms” that flood the web with content of dubious quality and pay their freelance writers a pittance to do it. (Last week, news business expert Alan Mutter stirred the pot by telling freelance journalists to refuse to work for so little, and j-prof C.W. Anderson noted that just because someone will work for that kind of money doesn’t make it right.

Demand Media’s Richard Rosenblatt and Steven Kydd both defended themselves against those charges in interviews with GigaOM and Beet.TV, respectively. A bit more surprisingly, they got some support from New York Times media columnist David Carr, who quoted several Demand Media freelancers who said, among other things, “Demand has been as close to a safety net as anyone gets in this business.” As for consumers who are frustrated by the lack of quality content, Carr says, “ignore the loudmouth and ask someone else.”

Are people paying for news — or relationships?: There was no single major news item on the paid-content front this week, but we did get a handful of interesting pieces of news and conversation on the subject. First, on the newsier side: An exec with the recently bankrupt newspaper chain MediaNews told Poynter’s Steve Myers they plan on rolling out their new paywall at two papers in the next few months, and gave him a loose description of what it will look like. (Summary: A metered model, like the Financial Times or The New York Times’ plans; breaking news and multimedia will be free; enterprise reporting, columns and reviews will be behind the paywall.) Another exec in the paid-content business, Journalism Online’s Gordon Crovitz, says the unnamed publishers they’re working with are also leaning toward metered models.

On the discussion side, two sharp pieces were written this week about what will sell online. First, CUNY j-prof and web guru Jeff Jarvis tells us what won’t sell: Scarcity. In media, Jarvis says, that means content and information aren’t scarce and can’t be sold as such. Instead, he advises news orgs to base their business on relationships with readers and marketers, saying, “We must also align our interests with those of the community … helping them do what they want to do, adding value and recognizing it that way.”

Second, PBS MediaShift’s Chris O’Brien notes that quite a few people are spending $1 to buy each other virtual beers on Facebook and wonders what it might mean for news. He theorizes that it indicates that true value lies “not in the thing itself, but in something adjacent to the thing, some feeling you have about it, or something you can do with it in terms of expressing yourself.” In a brilliant post, former McClatchy exec Howard Weaver takes the idea a step further, arguing that what people value is the community that they’re helping enrich and sustain by buying the virtual good. News orgs, he says, need to nurture the consumption of news as a social act, to create “an ecology where caring about the news becomes satisfying and rewarding social behavior.”

Gauging Facebook’s expansion: Last week’s discussion about Facebook’s potential power as a news and information source spilled over into this week, spurred on by reminders of Facebook’s furious rate of expansion: Sharing on it has quintupled in the last six months; it’s developing webmail to compete with Gmail; it’s creating its own targeted display ad system; and it’s hoping that Facebook Connect will become the web’s universal login. (As an added bonus, the latter article also has a wildly entertaining comment thread of people who thought they were logging into Facebook instead of commenting on a tech blog.)

Steve Rubel gives a vision of where Facebook might be headed next — business networking, helping developers build mini-sites within its networks, and ramping up search — and sums it up with a sweeping statement: “Facebook is becoming the web for millions and millions of people. … Facebook is unstoppable. They aren’t just the next Google. They’re the next web.”

Reading roundup: We’ve got quite a few (mostly short) miscellaneous items that are well worth a read this week. I’ll give them to you in no particular order:

— Here at the Lab, Martin Langeveld breaks down the 2009 fourth-quarter results from several of the nation’s largest newspaper companies, discerning a few interesting trends (advertising revenue and total revenue are down, but profits are generally up).

— Missouri j-prof Clyde Bentley lays out a step-by-step three-year plan for newspapers to prepare for a world in which mobile Internet access is the modus operandi, rather than PCs. It’s a great jumping-off point for newsroom innovation.

— The new director of BBC Global News challenged the network’s reporters and editors to deepen their engagement with social media and other web tools. Meanwhile, USC j-prof Robert Hernandez advises journalism students that the most essential 21st-century journalism skills are still the basics.

— Two interesting studies: A Penn study of The New York Times’ most-emailed list provides some clues to what kind of news people most like to share online, and research by social media consultant Jamie Beckland hints that in Portland, at least, policy-oriented journalism is thriving more in the local blogosphere than traditional media.

— Finally, UT-Dallas j-prof David Parry turns some keen observations of his students’ media habits into an insightful argument that “new media” aren’t all that new — in fact, they’re now “a fundamental part of our cultural, legal, and social institutions. It is time we started treating them as such.”

CircLabs, the hard-to-describe startup that aims to create new revenue streams for news sites, has detailed a little more about its plans. And Martin Langeveld, who’s involved in the project, has written more about it too. (You know Martin from his writings here.) Their initial product, Circulate, seems to be a browser plugin that tracks your browsing patterns and information you give it to recommend content you might like. CircLabs promises publishers a variety of potential revenue streams off that model, including the ability to use Circulate as a pay wall or a micropayments engine.

CircLabs is an offshoot of the work Bill Densmore did on what he called the Information Valet Project as a fellow at the Donald W. Reynolds Journalism Institute at the University of Missouri. I talked with Bill a couple months ago about his work on IVP; the video of our conversation is above. While IVP covered a broader set of ideas than Circulate does, I think it helps explain what the new project is all about. Full transcript below.

Joshua Benton: We’re here today with Bill Densmore, who is going to talk to us about the Information Valet project, which has been taking up a lot of his time and energy recently. Thanks for coming here, we appreciate it. For the folks who haven’t heard of it, what exactly is the Information Valet idea?

Bill Densmore: It’s a project that is being supported as part of my fellowship at the Donald W. Reynolds Journalism Institute at the Missouri School of Journalism. And it’s an effort to rally the news and information-services industries around a non-profit collaborative to create a shared user network for Internet information commerce and privacy protection.

The idea is that a consumer would have an account at a most trusted Information Valet — like a newspaper, like a bank, like their ISP, like their cell phone provider, or an affinity group — and they would profile themselves, share information about themselves, with that Information Valet. And then working with that Information Valet, they would decide how and when that information about themselves is used across the web.

That’s in contrast to the way the web works now, which is that at each successive website you go to, they — if they are in a marketing mode — try to collect information about you. Usually inferentially — that is to say, what did you click on? Then they slice and dice that in very sophisticated ways. And they use that to decide what to serve you when. And as a result, there are sort of bread crumbs of information about all of us all about the web now, at lots of different websites. The idea behind the Information Valet project — which I should say really appreciates and draws on a lot of the thinking of the VRM project at the Berkman [Center] here at Harvard — the idea behind the Information Valet is to create a new approach to managing your persona on the web, so that you can decide when and how you share that information — and you can get value for it.

So, in the Information Valet network, you will arrive at a web site, and that web site will be able to selectively get information about you, if you’re willing to share it. That allows for a very customized process of whatever it is you want. Now, in some cases — we think of this as a value-exchange network. In some cases you might want to use that to be compensated for having looked at an ad or sponsored material. Or you might be rewarded with some kind of coupon or something. The other side of the coin is it could be used to give you subscription access to valuable information, or to be able to pay for a music or video download. The mind starts to spin about the possibilities once you have this trusted value-sharing network in place, which is respecting your privacy and allowing you to value your privacy, which is allowing you to chose your most trusted Information Valet — and if you don’t like your Information Valet today, you can switch and go to a different one — allowing you to selectively decide on a session basis whether you want to share all of your demographic information or some of it or none of it.

So, that’s the idea — is to change the paradigm of how we and the news industry manage our relationships with our users, so that it’s a service that we are providing rather than a product. In other words, it’s no longer this print product — it’s no longer even necessarily this web product. It’s about helping you manage your relationships on the web. In a short hand, I think of this as a news social network.

Josh: So let’s walk through how this might work. Let’s start with: Let’s say I’m a resident of Boston, I’m interested in joining up for this project, and I want to sign up with The Boston Globe. The information that I would be asked in that process — I presume for it to have value, it would have to go significantly beyond “I’m a 33-year-old white male with a certain income level and a certain education level.” Are you considering this as getting into, “And I like Cajun music, and I like Indian food but I’m not so big on Thai” — how much information would you be asking for?

Bill: Well, I’m going to give an answer that seems sort of squirrelly, but the reason for giving this answer is because the nature of the idea. I guess I would say that depends on your relationship with The Boston Globe or Boston.com, and what sort of application you and they decide in parallel with each other that you want to make of the service. If you are really interested in getting a free service on the web, and you share a lot of information yourself — including some of the kind of things you mentioned a minute ago — it’s likely in a fully deployed world, Information Valet world, that you would be able to get a lot of your information jobs done on the web for free as you do today.

On the other hand, if you want really special premium information and you don’t really want to share much about yourself, then that might be part of a subscription package that the Globe might offer you. But uniquely it wouldn’t be just a subscription to the Globe — it would be a subscription to a whole array of products and services that the Globe can assemble for you across the web among all of these participating Information Valet websites.

Josh: So would you view this ever, for a news organization, as the determining factor about whether someone has access to news? I mean, in the old model, the determining factor was whether you bought a newspaper, whether you paid for it. Whereas the new model is if you can type in the web address, you can get the news. Would you anticipate that news organizations would make this the cut point — that we will only give you free access to Boston.com and the news that we provide now if you join this project and give us this demographic information?

Bill: I think that there’s always going to be a very substantial portion of the web — and particularly the news web — that’s going to be open and free to anybody. I think that, over time, there will be an evolution that will occur, where there will be some resources that we might think of today as news, but they might be much more enhanced — in terms of the level of personalization and the depth of the information. Where a Boston Globe might say, that the value proposition might be: Yes, you can have access to all this stuff, but we’d like to know, we’d like to ask you to share some information about you to go along with it, to help us defray the cost of providing that service — because that way we can make a little money and you can make a little money from marketers. But the important thing is that it’s entirely transparent. That is to say, you decide how your stuff is used, you decide who gets it and how it’s retained. And you decide how to value it.

Josh: What lessons would you take from the experiences that — for this idea — from the experiences that news organizations, particularly newspapers, have had in the past few years about requiring registration to view beyond the front page of websites? I think there was a study that came out a month or so ago saying that that practice has declined and that most news organizations are more willing to say, “Here have it — we’re not going to demand this information.” Are there lessons from that experience that apply to this idea?

Bill: I think there definitely are. I think if you put up a pay wall or a registration wall — in the sense of Wall, capital W — that that’s a non-starter in today’s web. But I think — imagine if you will if a newspaper sent a letter to all their print subscribers one day saying: We’d like to introduce you to the opportunity to be part of a valuable new service that we are offering all of our print subscribers. It’s free and if you want to do it, all you have to go do is go to this particular unique URL that’s in this letter and click on it, and we will connect it with your paid subscription and that’s it. And you’ll be part of the system. And so that’s it the first day.

Now maybe a couple months later you are going to do something on the web and you get a popup that says, you know, you could get an enhanced information service, if you would like, if you would take a few minutes and give us, you know, check through some boxes here about some personal preferences you have and information. Now is that registration? I don’t know. I think the word registration becomes a misnomer here. I think what we’re talking about is an iterative process, where gradually the Information Valet invites you to say more about yourself. And over time that allows an increasingly customized experience in which in some cases you may actually be compensated for what you do. And in other cases you may have the opportunity to pay for something that you really want that you won’t otherwise have access to.

Josh: In your aspirations for this, what is the scale you would hope to or like to achieve? I ask that because when you talk about the ability to protect one’s privacy as one of the key benefits, that ability is only useful insofar as the network you’re describing is large enough to encompass a lot of the behavior that you do. If Amazon’s not involved in this network, then you have a completely different separate relationship regarding your privacy with Amazon than you do with this network. So how big would this have to be to be effective in this way, or how big would you like it to be?

Bill: Well, it needs to be big within at least one vertical niche in order for it to have value. One of the challenges about networks, technology networks, is that they don’t have value unless they are at scale. And so how do you — there’s a chicken-or-the-egg problem. I’ve sometimes said that solving this problem is the basis of a book which would be called “Cracking the Chicken.” Because I don’t know — it’s a real challenge to figure out how do you raise the souffle where, on the one hand, you’ve got the users, and you’ve got the people with valuable information that either they want to sell or they want to pay you to look at. How do you get them all to — poof! — one day agree to be part of a network?

This is not a technical challenge. This is a missionary challenge, really — to convince a lot of consumers through their Information Valets and a lot of advertisers and information-service providers that there’s an everybody-wins scenario if folks buy into this idea and move on it.

One of the things that I think is exciting, though, is that the news industry has upwards of 50 million people who pay on a regular basis for information. There’s very few other entities — and that’s in the U.S. alone — there’s very few other information-service entities that you can say that about. I guess you can say that about the cell-phone industry, but really I’m not sure that people yet perceive that as buying information — they think they’re buying connectivity. I think over time people will see that as buying information. I suppose you could say that that might be true to some degree of the cable-television industry, but here again I think people initially thought they were buying connectivity and only now they’ve started to see that that’s actually an information service. Well, the news industry is a pure play — people who buy information. And so I think the opportunity exists, if the news industry makes independent judgments to be part of a system like this, to create a network overnight.

Josh: And then, of course, one of the benefits — one of the relatively few benefits of chain ownership, in that if you convince one guy at Gannett, you could have a whole bunch of newspapers at the same time.

Bill: Well, I think it’s important that each entity who would join a system like this makes an independent judgment to do so, because everything about it needs to be a free market for information. The individual players need to be able to set their own pricing, to be able to set all of their business rules. The only thing that I think needs to be absolute is the confirmation to the user that they own their personal information and that is important.

Josh: I mentioned the lessons learned from registration policies. There have also been previous attempts for news organizations around the country to unite and cooperate in a variety of ways, from New Century Networks to partnerships with Yahoo or Quadrant One and others. Are there — at least with the new ones, we’ll see how Yahoo and Quadrant One work out — the previous generations and iterations haven’t worked out all that well. Are there lessons that you can draw from that experience about why those efforts in the ’90s to create national ad-sharing systems weren’t as successful?

Bill: Well, I think that the New Century Network — which, as you know, was a collaborative, a for-profit collaborative of the what were then, I think, the six largest newspaper chains in the mid ’90s — I think that was a useful vision at its start. And I think where it got bogged down was over challenges about ownership and control, and over challenges about how to build out the vision from a technological point of view. I don’t think the notion of a cooperative arrangement among the nation’s news organizations to give consumers access to a range of information in a very simple one-ID, one-account kind of way — I think that was fundamentally a very good idea. I just think that the implementation was challenged. And I think that with the benefit of hindsight, there’s some really good lessons we learned from that that don’t need to be repeated.

Josh: So how far along are we in this process? What is the point at which I, or someone listening, will be able to go to a website and see how this is functionally working? If everything goes as you would like it to, what is the point at which this one-day turn-on of the network would happen?

Bill: I think we’re certainly at least a year away from flipping the switch. And I think that that’s probably a bit optimistic. I think that’s a good goal to have. I think it will be a few months before we can have a pretty demo of what a consumer might expect to see. But really, if you think about it, the key work that needs to be done at this stage is not with the consumer. It’s with the folks who have important — who have valuable information that they either want to sell or present to consumers, and the folks who have relationships with consumers who are disposed to believe that information has value. Those are the entities that need to be aware of this opportunity and become part of it.

Josh: All right. Well, thanks very much, Bill. I appreciate it.

Bill: Thanks for having me in and giving us the chance to talk about it.

This morning in Washington, D.C., Jeff Vander Clute and I announced the formation of CircLabs, a technology company based in Silicon Valley that’s building a new service to finance online news.  CircLabs has seed funding from the Donald W. Reynolds Journalism Institute at the University of Missouri.

The announcement was part of a one-day conference entitled “From Gatekeeper to Information Valet: Work Plans for Sustaining Journalism,” organized by Bill Densmore, another partner in the project along with Joe Bergeron, a Silicon Valley software engineer.

CircLabs plans a suite of services, the first of which is code-named “Circulate.”  Software development on Circulate is underway, and we anticipate launching the service during the second half of this year.

Circulate will address the challenges of how to increase traffic to media-affiliated websites, secure relationships with online users and enhance the value of news.  The Associated Press has been cooperating with us and is supportive of the service. We anticipate including a variety of strategic partners — unique investors necessary for continued development after the launch of Circulate.

Circulate is an outgrowth of research led by Bill Densmore, who was a 2008-2009 Reynolds Fellow at the Reynolds Journalism Institute at the University of Missouri.

Circulate will provide new and convenient ways for the Web to “come to” users, including social functionality that integrates, at their option, with their social network accounts.

Circulate promises to eliminate the uncertainties and wasted time of searching for news on the Web. After a simple, one-time sign-up, the user has instant access to personalized and constantly updated news from trustworthy sources around the world, delivered to the user automatically, wherever he or she may be. The user maintains absolute privacy and control of personal information.

More Americans now say they get most of their national and international news from the Web rather than from printed newspapers. Yet news publishers, and particularly publishers of the kind of essential journalism that’s necessary to sustain a democracy, enjoy a relatively small share of total Web traffic.

U.S. newspaper Web sites receive less than 1 percent of all Web page views and about 1.2 percent of total time spent online,* and within the news category, the majority of traffic goes to aggregators rather than to publishers of original news content.

Although no clear strategies have emerged for news publishers to thrive in an online-only environment, CircLabs believes that the right technology can play a key role in improving the market share of news content and increasing the Web revenue of news publishers.

At the same time, a variety of factors call into question the sustainability of the print model for delivering journalism. What we do know is that the legacy system is breaking, and that no viable online ecosystem for news has emerged. What’s needed: technology solutions to help publishers navigate toward a new service relationship with news consumers.

Circulate, the first service planned by CircLabs, aims to be a significant part of the solution. Circulate addresses two critical publisher needs: (1) the need to attract, both locally and nationally, a strong and loyal online readership, and (2) the need to monetize that audience, both directly through the sale of premium content and indirectly through high-value, targeted and interactive advertising.

Circulate will meet these needs of publishers and allow journalists to thrive in their roles as gatherers and curators of news and information. At the same time, Circulate will provide consumers with a new, post-search way to discover the news and connections they need. Circulate will serve all publishers of online news, ranging from newspapers to local news blogs. Circulate requires little or no technical integration on the part of publishers.

Some news organizations have announced plans to experiment with payment systems for content, including both micropayments and subscriptions. Circulate will offer a solution for either of these. In our view, newspapers should explore charging for online content when that content is both scarce in nature and of high utility to a segment of the audience. At the same time, we believe that revenue from advertising and other forms of commercial interactions will continue to be a critical means of financing news in the online ecosystem. Circulate will incorporate ways of generating high-value advertising revenue for participating news organizations.

For strategic reasons, we’re not prepared to describe Circulate in more detail at this time, but stay tuned! The support we have from RJI allows us to move forward in the development phase, and we will be marketing Circulate to newspaper publishers and other news distributors. We anticipate beta deployment at the end of the summer, and full deployment by the end of this year.

The principals of CircLabs are Jeff Vander Clute, Bill Densmore, Joe Bergeron and myself.

Together we combine a great deal of Internet product development experience with deep journalism and publishing experience. All of us have been active in the conversations of the last few years surrounding the future of journalism and the search for viable online publishing solutions. Jeff and I have also been serving as consultants to the Reynolds Journalism Institute.

_________

*Total U.S. Newspaper page views, February 2009: 3.06 billion; average time spent: 43 minutes, 9 seconds (http://www.naa.org/TrendsandNumbers/Newspaper-Websites.aspx). Total U.S. home Web page views, February 2009: 386 billion; average time spent: 61 hours, 11 seconds (http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/04/nielsen-online-global-lanscapefinal1.pdf). All data from Nielsen Online; newspaper data from Nielsen Online via Newspaper Association of America.

— It’s a few days old, but I liked Mario Garcia’s recipe for the Miami Herald. Shrink the size from a broadsheet; more photos and more youth, especially among columnists; have the color and flash of the quality Latin American papers; reflect the culture of the place.

— A transcript from Australian TV of a discussion on the future of foreign correspondence. Richard Sambrook, director of the Global News Division at the BBC:

I mean 20 years ago, I guess the BBC, same as the ABC and limited American networks, really had — we had British nationals and you would have had Australians and NBC or ABC America would have had Americans reporting to an American audience. These days though I think there’s a greater tolerance to having local people reporting and a greater respect of the fact that they can perhaps offer a deeper perspective into events. So I think we can increasingly see more and more international reporting from people who live and breathe and are perhaps foreign nationals and stringers and so on.

The Wall Street Journal (subscribers only) comes closer to confirming the Detroit newspapers will stop home delivery most days of the week:

The publisher hasn’t made a final decision, said this person, but the leading scenario set to be unveiled Tuesday would call for the Free Press and its partner paper, the Detroit News, to end home delivery on all but the most lucrative days — Thursday, Friday and Sunday. On the other days, the publisher would sell single copies of an abbreviated print edition at newsstands and direct readers to the papers’ expanded digital editions.

I’ve mentioned that I think this is a worthy response to the current crisis: Certainly nothing you’d want to do in a perfect situation, but a way to redirect cuts from the newsroom to production costs.

I had planned to contrast Martin Langeveld’s positive take with Alan Mutter’s pessimistic one. Two very smart guys, disagreeing on a plan of action a lot of papers are going to take in the next few months. But now I see that Martin’s summed up both sides — plus a few others — in a post of his own. Make that your weekend reading.

The chart below shows all American newspapers with a Kindle edition. The first column of numbers is how subscriptions to that newspaper rank among all the things (mostly books) you can buy on the Kindle. For example, the New York Times is the 27th most popular thing Kindle users buy. The next column is the newspaper’s most recent print circulation totals, from October. (I couldn’t find Austin’s or the Investor’s Business Daily’s anywhere online — let me know if you know them.)

Now, these numbers are awfully opaque; there’s no way to know how many Kindle subscriptions 792nd place earns the San Francisco Chronicle. But there are a couple conclusions you can draw:

— There’s a significant dropoff in Kindle popularity after you get past the Times and the Journal; there’s a next tier that includes the Post, LA Times, and Tribune; and then a long way down before you get to the major metro papers. I suspect those dropoffs in Kindle subscriptions are steeper than their print counterparts are — the rich get richer, and everybody else struggles to define their value proposition.

Internet theorists will recognize this as the familiar power law/“long tail” effect — the idea that the ease of distribution online brings more users to a few (like the NYT) and flattens out the many (like the metros). Or to put it another way: If you can get any newspaper in the country on your Kindle, why not get The New York Times?

— There are some interesting anomalies. The Seattle Times substantially outsells the Houston Chronicle on Kindle despite having half the print circulation — I would imagine because Seattle has more early-adopter tech-types, the sort of people who would buy a Kindle at this stage. (Also, the Seattle P-I doesn’t seem to have a Kindle edition yet.) Philadelphia, Arizona, and Boston look to be underperformers, compared to their print circulation; San Jose, Atlanta, and Orange County are punching above their weight. (So is Austin, whose daily circ is somewhere in the 160Ks now, I think.)