All these apps (and others like them) allow readers to assemble their own custom magazines/newspapers consisting of articles from a variety of different publications in a mobile-optimized interface. What sets Zite apart is a conviction that readers shouldn't have to do the work of selecting sources, nor should they outsource curation to their social networks. "We need to rise above what I would call customization," says CEO Mark Johnson. "No company I know of is doing a really good job of news personalization on small devices."
Really good personalization, he says, ought to be a passive thing -- the product of software that pays attention to what sorts of articles you click on, how long you spend reading them, whether you share them, which sources you return to most often and a host of other signals and then uses those signals to serve you a constantly-refreshed stream of content.
That's Zite. Johnson won't say how many users it has now, but he says it has "excellent user retention -- not quite Angry Birds, but close." The most common piece of feedback they've received from users, he says, has been a request to make Zite available on more platforms. Building on today's launch, the goal is to be on every major platform within 12 months.
Zite also crossed another major threshold this week with its first attempt at monetization. Rather than adulterate the experience with display or interstitial advertising -- "I feel like ads in a traditional sense don't work on mobile devices," says Johnson -- Zite is creating "brand channels," sponsored news channels that readers can add to their menus and browse just as they might browse/follow other channels. (It's a concept Forbes has been exploring in a similar way with our AdVoice program.) Lululemon is the charter sponsor.
One neat thing about the brand channels is that they also auto-personalize in response to reader signals. In other words, you and I might both follow the Lululemon channel, but because Zite understands that we have different interests and patterns, we'll get served different mixes of articles in that channel.
Crossing the monetization barrier puts new pressure on Zite to find a way to share those new revenues with the originators of the content in a way they'll consider fair. You may recall that shortly after Zite launched, it was hit with cease-and-desist orders from a slew of leading news companies and had to alter the way it displays some of their articles. For instance, clicking on an article from The New York Times -- Zite's single most popular source, accounting for 1.5% of all clicks -- takes you to the paper's website.
"It was a great wake-up call for us," says Johnson of the cease-and-desist onslaught. "We had been thinking of ourselves as a technology company. We realized we’re really in the media space, and we needed to figure out a revenue model that works for everybody." He says that is also among Zite's top priorities in 2012.
