……is the cash cow for Chinese company Shanda Literature Ltd, a
subsidiary of Shanda Interactive Entertainment.

The company’s business model is simple: read the first half
of a book online for free, and if you want to know the rest
(which usually is the case if you have read that far) you need
to pay for it. Revenues are split with the stories’ authors.

In China, this proves to be successful. According to Shanda
Literature CEO Hou Xiaoqing, the company now has cash reserves
of $1.8 billion, with 800,000 authors creating up to 80,000 new
pages of content per day, he said at the Frankfurt Book Fair.

On web portals such as www.qidian.com and www.hongxiu.com,
customers can chose from a huge variety of stories, and the best
even make it into print.

Xiaoqing said the company has also teamed up with China
Mobile to distribute literature via mobile phones, a
business model that he said was “very promising”.

He added it was now for Shanda to explore whether those
business ideas also work in other parts of the world, including
Europe.

Could this be a business model for other publishing companies as well?

What do you think?

- Padraig Reidy is news editor at Index on Censorship. The opinions expressed are his own.-

Solicitors Carter-Ruck have withdrawn the terms of an injunction preventing the Guardian from reporting a parliamentary question by Newcastle-under-Lyme Labour MP and former journalist Paul Farrelly.

This has been seen - rightly -  as a victory for free expression, and a demonstration of the amazing power of the web in the face of attempted censorship.

Once the Guardian had published its slightly cryptic story on its website last night, containing such tantalising phrases as: “Legal obstacles, which cannot be identified, involve proceedings, which cannot be mentioned, on behalf of a client who must remain secret”, it was inevitable that people would go searching.

Within hours, the Internet was alive with speculation, links to leaked documents, and republication of cached articles. At one point on Tuesday morning, phrases relating to the case constituted four of Twitter’s top ten “trending topics” --- a scarcely believable profile for a story that, technically, no one was supposed to be talking about.

Carter-Ruck seem not to have noticed the mindset of an increasing number of web users: once we are told we can’t know something, modern web users will set about finding out about it with a gleeful determination --- and more often than not with neither the cautiousness nor the proprietary attitude to information that can slow down “traditional” reporting.

The Streisand Effect -- whereby attempts to censor information end up ensuring the information is only spread more widely, is something that lawyers and judges are going to have to figure out.

The strong libertarian culture of the Internet quite simply means that you cannot get away with telling people what to do, and what to read, while surfing. Today’s Twitter triumph is more a victory for the culture of online social networking than it is for the technology.

And an important victory it is. What was at stake here was not merely a newspaper’s right to tell a story, but the very principal of open democracy: if newspapers and other media cannot report everyday parliamentary proceedings without fear of the courts, it is not just the journalism industry that suffers: it is the common citizen’s ability to participate in, and scrutinise, politics.

-Joe White is chief operating officer at Gandi, an Internet domain name registration firm. The opinions expressed are his own.-

Despite the importance of domain names for companies and the extraordinary amount of money many have paid for them, the vast majority of businesses are unprepared for imminent changes to the Internet.

The Internet Corporation for Assigned Names and Numbers (ICANN), the international body that oversees the structure of the internet, is liberalising the market for domain name extensions – the .com or .net part of a web address – from the beginning of 2010. This means that anyone, in theory, can apply to operate an extension. So alongside .com, .net, and .org, we will see .whateveryoulike.

Historically, companies have considered their domain to be a critical part of their brand identity. Some domains have been sold for millions of dollars – sex.com was reportedly sold for $14 million – and multinational companies often register up to 20,000 different variations of their brand to try and stop opportunists exploiting it.  However, despite this historic investment and interest, the vast majority (two thirds) of businesses are unprepared for imminent changes, according to some research we did a little while ago in conjunction with the Future Laboratory.

This is interesting given that there are real opportunities for companies. It will mean companies can readdress the way they communicate with customers, partners, or investors. We’ve already seen a shift in consumer behaviour where the high-street and virtual world have blended. The growth in blogging and social networking means people have also shifted their identity online. The liberalisation of top level domain names will help to blend the activities of both businesses and consumers with the potential to create a personalised brand experience.

Toyota, for example, could create the .toyota domain and register europe.toyota and usa.toyota, and set up sites for individual brands (highlander.toyota) and use targeted domains for different markets such as customers and suppliers (suppliers.toyota, dealers.toyota, buying.toyota). Or, Nike could create a personalised brand experience using yourname.nike, with training programmes, suggested products, networking pages which could link with sponsored athletes and so on. In addition, some companies could do one-off marketing campaigns or initiatives to support individual product launches. For example, Tastyhamburgersandhealthysalads.mcdonalds or Doveforrealwomen.unilever.

Indicators suggest that consumers will embrace this change. As part of the same research, we interviewed 1,000 consumers and one in five (19 per cent) said an extension such as .nike or .microsoft would be memorable. Considering only 24 per cent think .com is memorable, this shows the future potential for branded top-level domains.

However, while liberalisation of domain names is exciting, there are concerns over regulation. Some companies, such as Microsoft, have called for a staged roll-out, rather than full liberalisation, to ensure potential problems can be dealt with.

For example, should .apple be given to Apple the company, or to an apple growing co-operative in Wisconsin? What about top level domain names which play on morality or religion? The Vatican has already registered its concern with ICANN that making .god available could lead to serious, and potentially violent, dispute.

At the moment, ICANN is still developing the processes for dealing with issues such as this. It created an Implementation Recommendation Team (IRT) to look at concerns expressed about trademark protection. The team’s proposals are currently out for public comment before being incorporated into the process for liberalisation. ICANN is expected to start taking applications for new top-level domains between January and March 2010, and it anticipates between 300-500 to begin with.

For us, this is an exciting change. But if liberalisation is to bring the benefits it promises, it needs to be handled carefully. The opportunities are diverse for different types of businesses, and so long as concerns are carefully managed, we think this is a major shift in the internet that companies cannot ignore.

What if the Internet is not really a utopian democratic catalyst of change?

The Web is often seen as a positive means of instilling democratic freedoms in countries under authoritarian rule, but many regimes are now using it to subvert democracy, Evgeny Morozov, a contributing editor at "Foreign  Policy", proposes.

The Internet can actually inhibit rather than empower civil society, Morozov, argued in a lecture on Tuesday at London's Royal Society of Arts.

Social media platforms are being used by certain governments to create a "spinternet" to influence public opinion. They are also being used as part of a process of "authoritarian deliberation" to try and increase the legitimacy of authoritarian rule, he said.

Morozov spoke with Reuters after the lecture.

Some say the Frankfurt Motor Show, which started on Sept. 15, has lost a bit of its lustre amid the crisis that has hit the global car industry with an economic baseball bat. But there are still people out there who are willing to shell out the big bucks to go see the new car launches. One lucky bidder, identified only as i***l on www.ebay.de paid 158 euros ($232) for two tickets to get into the car show today, days before other mortals are allowed to pass through the big white doors leading into the halls of the show. There are 150 separate auctions for tickets to the car show, with sale prices starting at 7 euros for tickets valid on the days that are open to the public, which start on Sept. 19. So it looks like there are still plenty of people out there who are just wild about cars even though the government has to pay tightfisted consumers to buy a new one with their cash for clunkers programme. Would you pay that much to get a glimpse of  what the automotive industry has in store before others can?

It takes a deft touch to vanish a boatload of cash, but Yahoo seems to have done it.

Disappointed investors voted with their feet initially when the Microsoft-Yahoo deal, announced in the early hours of Wednesday, came with reams of detail on search, revenue-sharing, technology and advertising tie-ups — but no anticipated upfront payment, which some had put at around $1 billion. Yahoo prompty lost about a 10th of its market value.

“This agreement comes with boatloads of value for Yahoo, our users, and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development,” Yahoo Chief Executive Carol Bartz said in a press statement released jointly with Microsoft on Wednesday.

Back in May, Bartz said her company would be open to any deal with “boatloads of money” and the right technology. Microsoft is indeed cash-rich, but the market might be wondering why shareholders won’t immediately see much from its coffers.

Asked what had happened to the boatloads of money on a conference call for investors and media, Bartz appeared to go on the defensive.

“What was really important to Yahoo is that we had a deal that flowed successfully through our P&L. Having a big cash payment upfront doesn’t really help us from an operating standpoint,” Bartz responded, before launching into an explanation of traffic acquisition costs, expense lines and investing in the business.

“So listen, it’s easier to talk about boatloads of cash and value because you guys understand that. But as far as we’re concerned the boatload of cash is us preserving our revenue line.”

Here are some of the day’s stories on the media industry:

Bernstein Research Criticizes Media CEO Pay (B&C)
“The Bernstein report notes that the top earner among media executives in 2008 was CBS Corp. CEO Leslie Moonves, who was paid total compensation of $31.9 million last year. He is followed by Disney CEO Robert Iger, who earned $30.6 million; News Corp.’s Rupert Murdoch, who took home $27.5 million; and Viacom’s Philippe Dauman was paid $23 million. Time Warner CEO Jeff Bewkes took home the least of the top five, at $19.9 million,” writes Claire Atkinson.

Media General posts quarterly profit, ad sales fall (Reuters)
Robert MacMillan writes: “While Media General, which publishes The Tampa Tribune, Richmond Times Dispatch and other papers, reported a 26 percent drop in newspaper ad revenue, the company said classified and retail ad declines were less steep than in recent quarters. Media General reported second-quarter net income of $20.6 million, or 90 cents a share, compared with a loss of $532.2 million, or $24.12 a share, a year ago.”

Philadelphia Newspapers to Release Reorganization Plan (E&P)
“[U.S. Bankruptcy Judge] FitzSimon had given the company until Aug. 31 to present its plan. Company officials did not reveal any new details, but had previously revealed that the plan involved raising $50 million in new capital and negotiating with lenders to reduce the company’s $300 million debt.”

Report: Internet use in Asia, Africa, and Mid-East set to soar (CSM)
“A new report from Forrester Research estimates that approximately 2.2 billion people will be online over the next few years – an increase of over 45 percent. Analysts at Forrester forecast that, by 2013, 43 percent of that 2.2 billion will be based in Asia, with 17 percent in China alone,” writes Matthew Shaer.

In other news:

• Boston Globe Media Launches Nontraditional Marketing Division (E%P)
• Gray Gets Nod To Manage Young Stations (TV Newsday)
• Fitch Gives Upgrade To Cablevision As Earnings Rise (WSJ)

[Picture: Les Moonves, CEO of CBS Corp arrives at the Sun Valley Inn in Sun Valley, Idaho July 9, 2009. REUTERS/Rick Wilking]

“Orwell fans, lock your doors,” was the reaction from Amazon user Caffeine Queen after she and others had received notice from Amazon last Friday that their e-book versions of “1984″ and “Animal Farm” had been removed from their Kindle device.

Amazon explained later that these electronic versions were distributed illegally and that customers were refunded.

Amazon’s decision to remotely delete the e-books not only infuriated customers, it sparked a debate on digital ownership.

Richard Waters of the Financial Times argues that this episode questions the future of ownership in an electronic age:

“New internet media platforms like this raise a dilemma. Their owners have the power to control information on the client. So if they have a legal responsibility to remove data from their systems - say, after receiving a take-down notice under the DMCA - failing to expunge it may expose them to liability.”

Melissa J. Perenson of PC World asks if you can still call it “owning”:

If, in this digital realm, we’re not truly purchasing content, but rather “borrowing” it at a set price, and according to someone else’s changing rulebook, we as consumers we deserve to know this up front, in clear and obvious language (unlike Amazon’s clear references to “buying” books, and all the assumptions of ownership that go with buying books). If the rules have changed on us, we deserve to know.

Meanwhile, user Steve Holden offers his Kindle in the forum: “If I change my mind later I’ll just take it back and return your money. This isn’t digital rights, it’s digital wrongs.”

Here are some of the day’s stories about the media industry:

Recession sends Americans to the Internet (Reuters)
S. John Tilak writes: “More than two-thirds of American adults — or 88 percent of U.S. Internet users — went online for help with recession-induced personal economic issues and to gather information on national economic problems, a study released on Wednesday said.”

BBC and Government Fall Out Over Financing Plan (NYT)
“The BBC and Britain’s Labour government, which has a history of support for the “Beeb,” have fallen out over a government plan to share some of the broadcaster’s £3.6 billion in public funding with its commercial television rivals,” writes Eric Pfanner.

USA Today introduces Newsdeck site for top headlines (Editors Weblogs)
“To give visitors another way to view the news, USA Today has introduced a site it calls Newsdeck that compiles the top headlines in an easy-to-read format. Users can scroll through stories in eight categories, including News, Money and Sports, with the ability to switch back and forth between the latest news and the most popular articles.,” writes Liz Webber.

Bing’s First Month A Bust (Business Insider)
Dan Frommer writes: “Microsoft’s U.S. search market share was 8.4% in June, up from 8.0% in May, according to comScore. It would have been a disaster if Bing didn’t grow at all with all that advertising and free promotion vianews coverage, so at least it’s up a little.”

In other news:

• If you want readers to buy news, what exactly will you sell? The case for a free/paid hybrid (CJR)
• Cost cuts bear fruit for Gannett (FT)

Here are some of the day’s top stories in the media industry:

Microsoft takes on Google as Office moves to Web (Reuters)
Jim Finkle reports: “Microsoft will offer for free to consumers Web-based versions of its Office suite of programs, including a word processor, spreadsheet, presentation software and a note-taking program. Microsoft will also host one Internet business version of Office at its own data centers, charging companies a yet-to- be-announced fee.”

Six in 10 companies plan to skip Windows 7 (Reuters)
“Many of the more than 1,000 companies that responded to a survey by ScriptLogic Corp say they have economized by cutting back on software updates and lack the resources to deploy Microsoft’s latest offering.”

MySpace to Take Entertainment Tack (WSJ)
“In a brief interview, News Corp. Chief Executive Rupert Murdoch said MySpace needs to be refocused ‘as an entertainment portal.’ Mr. Murdoch described his vision for MySpace as a place where ‘people are looking for common interests,’” writes Julia Angwin.

15-Year Old Analyst Trashes TV, Newspapers, Radio, And…Twitter (Business Insider)
“A 15 year-old working in Morgan Stanley’s London office has written what may be the firm’s most popular research report in years,” writes Henry Blodget. “In it, he explains that none of his friends read newspapers and few watch TV. He also, interestingly, says none of them use Twitter, because no one reads the tweets texting costs money.”

McGraw-Hill trying to sell BusinessWeek (Reuters)
Jui Chakravorty Das and Robert MacMillan report: “McGraw-Hill Cos Inc is trying to sell BusinessWeek magazine, a source told Reuters on Monday, at a time when media advertising sales are slumping and would-be buyers for newspapers and magazines are scarce. McGraw hired boutique investment bank Evercore Partners Inc to manage the sale, said the source, who was familiar with the situation but not authorized to discuss it publicly.”

In other news:

• At $6.5 Billion, Facebook is Now Worth More than CBS (Mashable)
  
• Magna Forecast: Ad Recession to Drag On (E&P)