Remember this term: Peer39 explained semantic search, which improves search accuracy by understanding searcher intent and the context within which search terms appear.

The 3 million iPads sold as of June were a major topic of discussion at two conferences this month: The Big Money’s Untethered 2010: Profitable Media in the Tablet Era, and the Digital Publishing and Advertising Conference. Untethered was aimed more directly at book publishers, and its “Future of Book Publishing” panel included publishing head honchos like Simon & Schuster CEO Carolyn Reidy, HarperCollins CEO Brian Murray, and Perseus CEO David Steinberger. But the session covered no new ground, and perhaps its only real surprise was Murray’s estimate that 40–50% of HarperCollins’s business will be digital within the next five years. Meanwhile, DPAC’s audience and panels contained few familiar faces, and its sessions moved beyond piracy and e-book pricing to provide some refreshingly new takeaways for book publishers.

BUYING REAL SHOES WITH FAKE MONEY. ON FACEBOOK.

Just got around to creating a page for your company on Facebook? Sorry: Fan pages are “very 2009,” said Lisa Marino, CRO of RockYou. Facebook now has over 400 million users sharing over 25 billion pieces of content every month, and publishers must be on top of the really new trends. First, recognize the importance of social gaming—playing games within Facebook. The three most popular games are all made by Zynga: Farmville has over 18 million daily active users, followed by Texas Hold’em Poker (5.5 million daily active users) and Treasure Isle (5.1 million daily active users). Facebook has made a “huge commitment” to social gaming—outsourcing gaming on the platform but aggressively growing it. 17 of the top 20 games are dominated by women. 76% of women play electronic games and most of them are within the “mom demo,” 35–50-year-old women who just happen to control the household pocketbook (and have always been the group that reads and buys the most books). This demographic plays games between two and three times a day, spending up to 20 minutes playing, and is a “captive audience” that brands can work with, Marino said. Furthermore, the affluent and urban are more likely to be on social networks, and the time they spend there is up 82% year on year.

Gamers are willing to engage with brands inside social games, in order to earn the “virtual currency” that allows them to advance. Users can also advance by spending real money—but 97% of social gaming women would rather earn virtual currency. To get it, they accept branded offers (like taking a survey—the most popular option, preferred by 34% of women—watching a video, or downloading a coupon). A 2009 survey from Q Interactive showed that nearly 80% of women playing social games have signed up for offers in exchange for more virtual currency, and 67% of those said they found the offers useful. Marino said the Facebook video ads resulted in a click-through rate in the 0.08-to-0.1% range, a marked improvement over traditional banner ads, which usually have a click-through rate of 0.05% or less.

Facebook has rolled out a “Facebook Credits” pilot program over the last 90 days and is “spending a tremendous amount of effort getting users to be comfortable using virtual currency on the platform” and accustoming them to earn credits by completing tasks like those mentioned above. Brands shouldn’t just think of these credits as in-game virtual currency: Starting in 2011, users will be able to exchange Facebook credits for real products, like shoes, as the Facebook platform will allow inventory uploads. “Getting involved in Facebook credits now will pay off as a strategy down the road,” Marino said.

Companies can engage with the games in other, “non-incentivized” ways as well. RockYou worked on a campaign for Coke inside of the Zoo World game, where users could buy a Coke vending machine for their zoo. Over 2 million vending machines were bought in the first five days of the campaign, and “impression counts for advertisers continue well beyond the flight of the campaign as users keep them in their games,” Marino noted. How about selling a virtual version of a hot new bestseller?

MOBILE > PC

In a panel called “How Do You Make Real Money on Digital Content?” David Mason, SVP, AOL Content Platform, recommended changing the cost structure of content creation. AOL relies on over 40,000 professional freelance writers, photographers, and videographers to create content at a significantly lower cost than if the same were done in-house (plus, as Mason helpfully pointed out, you couldn’t fit 40,000 people in a single office building). But the panel was quickly taken over by discussion of the iPad, a seemingly unavoidable topic these days. Moderator Dave Hendricks, COO of LiveIntent (a company that helps publishers develop engaged audiences on social media platforms), asked panelist Ernie Cormier, CEO of mobile advertising solutions company Nexage, whether Apple or Amazon’s business model is “smarter.” “If you want to take who is on the defense versus who is on the offense as a sign of who’s smarter, Amazon is on the defensive,” said Cormier, pointing to the Kindle’s recent price drop.

Apple is also leading the new transition from content creation for standard broadband internet to content creation for mobile devices, including the iPad (the transition from print to digital is so yesterday). Wired magazine’s iPad edition sold almost exactly the same number of copies in its first month as the print edition. “Does it make sense for businesses to invest in device-specific versions of technology in order to get alternate spending from customers?” Hendricks wondered. Yes, Mason said: “What Wired is doing is the perfect thing to do.”

Mark Weinberg, VP Programming and Product Strategy for Hearst, was crankier. “What Wired did is insane,” he said, calling their app “overly featured and overly expensive” and the iPad itself “a $700 toy.” “Just because people bought [the Wired app] tells you nothing about what the future of that business is going to be. Turning your subscription data over to Apple is not a great model.” What he didn’t mention was that the people buying the Wired app were not necessarily the same people who subscribe to the magazine—and that’s important for book publishers to remember. Creating an app can open up your product to an entirely new audience.

Don’t limit yourself to the iPad, though, cautioned Cormier, who said that publishers could spend the money they’d spend on a single iPad app to reach many other kinds of mobile devices. Within the next year or two, he said, smartphone sales will exceed desktop PC sales, and eventually the total smartphone base will exceed the total computer base. “Make sure your lens is broad enough to take in that whole world out there.” (For more on publishers’ efforts to create mobile content, click here.)

LEGACY MEDIA

“The Next-Generation Digital Content Platforms: Can You Use Just One?” might have been the only session of the day that was primarily about “traditional” (nostalgically referred to as “legacy”) media—i.e., content created primarily for an existing tactile surface. It helped that the panelists were all passionate about their respective media—Doug Carlson, Managing Director of Zinio, about magazines; VP Michael Tamblyn about Kobo; and Barnes & Noble‘s Anthony Astarita about the Nook. Catherine Balsam-Schwaber said iVillage users claim to interact with five separate devices in one day, so it is critical for them to be able to port their content around. “Content should be device-agnostic,” she said. Tamblyn agreed that “your books should be able to follow you.” Carlson noted that Zinio and similar apps allow instant global availability of content. A colleague who runs several ski magazines told Carlson that, while he used to mail those to his subscribers around the world (only 20% of skiers live in the U.S.), now he saves air freight costs—and those subs are receiving their magazine in a timely manner. “You start thinking about a golden age” of publishing, he said.

Tamblyn was interested to see what we would learn about how each device opens up a different book buying audience and how purchase frequency differs between devices and platforms. Balsam-Schwaber mentioned that iVillage is negotiating with publishers on interesting share models that would allow books to be published in the iVillage environment, regardless of device. Nevertheless, Tamblyn noted that content has to be appropriate: “I’m not certain Moby Dick would be better if you put whale sounds in it.”

In “Successful Business Models for Digital Content,” Random House VP Digital Matt Shatz and President of Alexander Street Press Stephen Rhind-Tutt spoke about other ways that both large and small companies can earn revenue from digital initiatives. Shatz said there are three “buckets” for future revenue opportunities. The first is increased volume of core digital product, like e-books and downloadable audio; the digital format helps a company reach more buyers across the world. The second bucket is content enhancements, in which a company takes its underlying core content and generates revenue by enhancing them. Examples include personalized books, enhanced eBooks, subscriptions, and chunking. Shatz said that chunking, or selling books by the chapter, works particularly well for categories like business, self-help, and parenting; people may not want to buy an entire book but are happy to buy a chapter or two. The third bucket, ancillary revenues, includes any revenue streams not fundamentally generated by core content. An example would be a partnership with a gaming company, where the publisher gets benefits in return for helping to develop the narrative of a video game.

Alexander Street Press is an Alexandria, VA–based electronic publisher of online humanities, social sciences, performing arts, and music directories, which libraries and educational institutions can subscribe to or purchase. It’s important for publishers to be open to licensing and partnerships, Rhind-Tutt said: “No one site contains all information, so if our business is getting content to people, we have to work with other people.” (Alexander Street has over 1500 business partners.) Publishers also need to find ways to add value to their existing content. One way publishers they can do this is through semantic indexing. “People are asking new questions. They want to know who said what, when,” said Rhind- Tutt. Users of Alexander Street’s database of Counseling and Therapy Transcripts can, for example, search for all instances of male therapists mentioning the word “drink” to female clients. “If you can find additional ways of adding value,” Rhind-Tutt said, “the business model will sort itself out.”

One of the liveliest panels was devoted to “The Promise of Distance Learning.” The market of college-aged students is estimated to reach 160 million by 2010, with 60% of those in Asia. Singapore alone has 400,000 users on its university site, while a robust online university is flourishing in Istanbul, because it cannot afford to build schools to educate all of its youth. Michael Moh, a principal with ThinkEquity, an investor in educational companies, said that if the Internet is in the 21st century what the railroad was to the industrial revolution, then “distance learning is its tracks.” Most participants felt that a combination of on-site participation with distance learning was most successful.

There was much discussion of the future of textbook publishing, with Bob Christie, CEO of Thomson Learning Group, admitting that 52% of college students do not buy new textbooks; they either buy used, or they share with friends. But textbooks sales went up when there was also a web component. His company is looking at site-licensing online book content through participating universities. (At present, though all Thomson books are digitized as PDF files, the cost of adding tagging for all but a few is prohibitive.) Becoming ever more competitive on the p-book front, Thomson is testing a program that charges bookstores for returns, and offers the used book price to students whose professors require that they buy the textbook.

While pondering other “New Ways to Value Information,” Jon Winder, senior vp of Harvard Business School Publishing, confirmed that — yes — the “pay-for-content model” is on the ascendancy, as ad-driven schemes litter the dot-com wasteland and publishers scramble for alternate revenue streams. He noted that subscription or pay-per-use models were gaining favor, and examined some early successes such as the online edition of the Wall Street Journal (citing its financial relevancy) and the boom in X-rated content (it’s based on a “core passion”).

Moving on to passions of a different sort, David Sidman, CEO of Content Directions, plunged into the world of “recombinant publishing,” arguing that publishers must work to offer information at the right level of “granularity.” For example, online travel guides could sell just the “hotel” or “sights” sections, while business information publishers might consider selling pieces of analyst reports instead of a full subscription. The tricky part will be tagging all this content so that it can be identified at the granular level — the individual chapter, encyclopedia entry, recipe, etc. — and publishers must then create a “metadata database” so that the content can actually be looked up. Probably the cutest message from Sidman’s talk on digital object identifiers, however, was the heartwarming tagline: “A DOI is Forever.” Elsewhere, HarperCollins’ Larry Bryant shared a few e-publishing tips. Most problems aren’t technical, but are process-related, he noted, before chanting the new corporate mantra, “Standards are GOOD.”

Few at the seminar, however, reported unalloyed success online, though Tim O’Reilly of O’Reilly Associates, with 21 million pages views per month, was closest to crowing. Laura Fillmore of Open Book Systems probably summed it up best when, referring back to John Kilcullen’s advice to “follow the money,” added, referring to the complexity and cost of co-ordinating technology and content, “I say, follow the pain.”