Within this sphere there are basically two kinds of research: Quantitative and qualitative. The first is basically numbers: How many people between the ages of 25 and 65 say they like to put non-dairy creamer in their coffee? You get this from large-scale surveys of consumers, usually done by phone or online.

The second is more subjective: Why do you, as a college-educated female under 40 who lives in the Midwest, like this or that non-dairy creamer and how do you feel about it? This is a little trickier to get. Ad agencies and research companies spend $7 billion a year rounding up focus groups and asking roomfuls of consumers a bunch of questions and paying them for their time. In truth, the practice hasn’t changed all that much from the days portrayed in “Mad Men.” Well, maybe a little. But if you’re looking for a part of the advertising ecosystem that’s ripe for disruption, this looks like it.

Enter GutCheck, a curious little Denver-based start-up that I encountered last week. Why go to the time and effort of assembling a bunch of consumers in a room to say things they may or may not actually believe, all at a cost of thousands of dollars, when the power of the Internet gives you the means to reach them directly in the unguarded comfort of their own homes for 40 bucks a head for every half hour? Its faster than a focus group–you get results right away versus waiting for weeks–cheaper, and the results are arguably better.

I had breakfast with CEO Matt Warta last week, and he demonstrated the product for me. It’s a cloud-based service where subscribers, usually ad agencies, search out pre-screened people who fit a given profile. Since we were having breakfast and he asked me to come up with a question to ask a consumer, naturally my thoughts turned to the cup of coffee I had just ordered but didn’t yet have. Quickly sorting through a database of five million potential interview candidates in about two minutes, he found a college-educated woman online and conducted what amounted to a brief chat session about non-dairy coffee creamers.

She got a small incentive for her time, Gutcheck would have gotten $40, and Warta, had he been an ad exec with a client making non-dairy coffee creamers, would have come away with some anecdotal data to help inform the thinking behind a forthcoming ad campaign. (He does bear a bit of a resemblance to Roger Sterling, though minus the cigarette.)

Yesterday GutCheck announced a subscription version of the service aimed at larger agencies. Rather than pay on a per-interview basis, as has been the practice so far, agencies can pay for an annual subscription on a per-user basis. Warta said that when compared with traditional research methods, it’s still “freakishly affordable.” The new offering lets teams at ad agencies pick and choose who they want to interview, what factors they want to focus on and so on.

Warta, a former venture capitalist himself, raised $2 million in funding from Highway 12 Ventures, a Boise, Idaho-based venture capital fund. GutCheck also won a $1 million prize at the DEMO conference last month (not cash, ironically, but that much worth of free advertising). Not bad for a shop with five employees.

A spokeswoman declined to say what percentage of the company’s overall workforce that represents. Sony Online Entertainment, which is a subsidiary of Sony, will shift a lot of the work to its headquarters in San Diego.

In addition to the layoffs, Sony Online is also discontinuing production on an upcoming game, The Agency, which had been under development for four years and was slated for the PC and PlayStation console. The game studios are known for their work on EverQuest, Star Wars Galaxies, Untold Legends and Field Commander.

The decision to discontinue will allow the company to focus on two of its better known properties, PlanetSide and EverQuest. The layoffs and studio closures were initially reported by Kotaku.

Bloomberg reports that Sony Online Entertainment President John Smedley has said that the company plans to develop more free-to-play games, which aligns with the growing popularity of social games on Facebook. Those games require less money and time, he added.

Here’s Sony’s full statement:

“As part of a strategic decision to reduce costs and streamline its global workforce, SOE announced today that it will eliminate 205 positions and close its Denver, Seattle and Tucson studios. As part of this restructuring, SOE is discontinuing production of The Agency so it can focus development resources on delivering two new MMOs based on its renowned PlanetSide and EverQuest properties, while also maintaining its current portfolio of online games. All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern.

This strategic decision will have no impact on SOE’s current portfolio of live games; additionally SOE will transition development efforts for the Denver and Tucson studios’ suite of products to its San Diego headquarters. This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year.”

Yahoo, in a clear attempt to get deep into the social content space and better compete with both AOL and Demand Media, announced the acquisition of Associated Content.

Sources close to the situation said the price was $90 million in cash, which is a solid outcome for Associated Content, a start-up that found itself in an increasingly crowded space for cheaper content.

There are no earn-outs and no restrictions, sources added.

Yahoo (YHOO) declined to provide the financial terms of the deal and said it expected to complete this acquisition in the third quarter of 2010.

In the deal, which the pair have been talking about for some time, the code name for the New York- and Denver-based company was Atlantic.

And, indeed, Yahoo is aiming to garner a massive sea of content by buying the company, which said it has 380,000 contributors and many millions of pieces of content.

It has about 16 million unique monthly visitors, according to recent surveys, and has signed several distribution deals with major media partners.

“This is really about our commitment to providing high-quality content that is relevant to users and also advertisers,” said David Ko, who heads Yahoo’s media efforts, in an interview with BoomTown just before the deal was announced.

For Associated, said founder Luke Beatty, it was a need to get access to Yahoo’s huge pool of consumers for its content, provided by armies of freelancers. It was founded in 2004, he noted, with the tagline: “The People’s Media Company.”

“We invented the category, thinking about this idea that there should be a democratization of content,” he said. “Being part of Yahoo increases our scale to a completely different level.”

Ko said Associated Content was “far superior than any competitor.”

It was a sentiment countered by Demand CEO and co-founder Richard Rosenblatt:

“The fact that Yahoo–which has historically sourced content from storied brands like Reuters, Associated Press and entertainment deals with Hollywood–is now ready to bring user-generated content to its advertisers is fascinating,” he wrote in an email to me. “Demand Media’s approach is certainly different than either AC, Yahoo or the combination. We think that our approach is differentiated due to our large professional content creator network, rigorous editorial processes, strong technologies and algorithms and distribution on a combination of owned and partner sites.”

Yahoo’s Ko also called Associated Content a “pioneer” in the space to make bank from crowd-sourced, search-optimized content efforts for media about more mundane topics like back pain.

And, indeed, that is true.

Yet Associated Content’s efforts have been overshadowed recently by those of Santa Monica, Calif.-based Demand Media, which is heading for an IPO at a multibillion-dollar valuation, as well as AOL (AOL), which has put a lot of muscle behind both its low-cost social content at its Seed unit and higher-priced premium content efforts.

As MediaMemo’s Peter Kafka wrote:

“Associated Content looks and acts a lot like Demand Media, the Santa Monica-based “content mill” that’s drawn a lot of attention in the last year or so–though both companies bristle when you compare the two. It’s also thematically related to AOL CEO Tim Armstrong’s push to automate the production of content at that company.”

And while Beatty had said Associated Content was not for sale, many other sources inside and outside the company said it has been shopping itself for a while now, including to both Demand and AOL, in fact.

It hired Allen & Co. earlier this year, after AOL talks went nowhere.

Ironically, Armstrong was an angel investor in Associated Content, which is also backed by Canaan Partners and SoftBank Capital. It had raised a total of $21.4 million.

Another irony: In the past, Yahoo has taken a look at acquisitions of both AOL and Demand, deeming both too pricey.

In addition, the relationship between Demand and Yahoo has gotten testy of late, with Demand poaching top exec talent from Yahoo, such as U.S. ad sales head Joanne Bradford, among others.

People close to Associated Content say it’s on a $15 million run rate, up from $4 million earlier in the year.

Still, settling in at Yahoo and for a solid price is a good outcome for Associated, whose staff will now be integrated with the Silicon Valley Internet giant.

“Combining our world-class editorial team with Associated Content’s makes this a game-changer,” said Yahoo CEO Carol Bartz in a statement. “Together, we’ll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we’re one of the most visited destinations online.”

Here is a video that Yahoo posted on its Yodel Anecdotal blog of Beatty (good lord, you really don’t need to kiss up to your new bosses with purple socks, Luke!):

And here is the official press release from Yahoo about the deal:

Yahoo! to Acquire Associated Content

Extending leadership in content with the addition of 380,000 contributors

Sunnyvale, Calif.–May 18, 2010–Yahoo! Inc. (NASDAQ: YHOO) today announced it has signed a definitive agreement to acquire Associated Content Inc. This strategic move extends Yahoo’s ability to provide high quality, personally relevant content for the benefit of more than 600 million users as well as tens of thousands of advertisers. As Yahoo! enhances its social, mobile, local, and media offerings, the acquisition of Associated Content reinforces the company’s longstanding promise to offer the best of the Web–by combining Associated Content’s approximately 380,000 contributors who provide rich and varied content on a broad array of passion points, with Yahoo’s leadership in partnering with established content brands and the award-winning team of editors and experts from Yahoo!.

“Combining our world-class editorial team with Associated Content’s makes this a game-changer,” said Carol Bartz, CEO, Yahoo! Inc. “Together, we’ll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we’re one of the most visited destinations online.”

“The Associated Content team and our 380,000 contributors are looking forward to joining Yahoo! and to the opportunities that being part of a global Internet brand presents,” said Luke Beatty, Associated Content founder and president. “Combining our crowd sourced content with Yahoo!’s distribution, world class editorial team and online marketing leadership will accelerate our growth as we continue to leverage our best-of-breed platform to deliver high quality compelling content on more than 60,000 topics.”

For advertisers, this deal will expand Yahoo! into more topic areas and real-time content generation. The combination promises to offer advertisers even more opportunities to engage groups of passionate consumers in ways they will find uniquely appealing to their interests and tastes. Having insight into user intent through its leading search products enables Yahoo! to identify topics important to advertisers and users. Yahoo! plans to use Associated Content to create content around those topics and leverage Associated Content to contribute content to existing media properties. Associated Content also provides more opportunities for Yahoo! to partner and collaborate with publishers who can help the company shape the tremendous variety of content coming in, into something bespoke and even more engaging.

While current Associated Content content is U.S.-centric, Yahoo! expects to scale the platform globally.

Associated Content was founded by Luke Beatty in Denver, Colorado, in 2004. Associated Content receives more than 16 million unique users per month (comScore) and the editorial staff reviews more than 50,000 pieces of content per month, including articles, images, audio and video.

Yahoo! expects to complete this acquisition in the third quarter of 2010. Financial terms were not disclosed.

That’s per Huffpo’s own numbers, served up by Google Analytics (GOOG). And as usual, outside auditors provide a different number. ComScore’s (SCOR) January numbers put the site at 26.4 million unique visitors (see breakdown at bottom of this post).

But no matter how you count it, there’s now a really, really big audience for a site the smart set derided as a vanity project for Arianna Huffington when it launched in 2005.

You may also recall predictions that Huffpo would wither after the 2008 elections, but that hasn’t happened either. So what’s driving the growth?

Verticals, says Huffington–the mini-Huffpos the site has been pumping out on a regular basis. The site’s technology and sports sections, for instance, didn’t exist six months ago. Now they account for 10 percent of Huffpo’s traffic, she says. (Did you know ultimate fighter Chuck Liddell has a nude workout tape?)

Other big hits: Comedy (up 58 percent in the last six months), style (37 percent), entertainment (25 percent).

Huffington was less boastful about the site’s attempts to roll out local sections. That started with Chicago in August 2008, and now includes Denver, Los Angeles and New York.

But she’s not sure where that will go next: “This year [we] have prioritized launching other sections, which has been a great decision,” she says. It’s possible that Huffpo will launch more local sites, or it may partner with other sites instead.

Huffington’s competitors and/or detractors would also want to point to the site’s team of technology wizards, which allow it to extract the maximum value out of a relatively small (100 full-time employees) staff. Huffpo has mastered the art of turning other people’s work into its own stories and eyeballs.

But eyeballs are eyeballs. Next up: Turning them  into dollars. That’s up to sales boss Greg Coleman and his brigade of Yahoo (YHOO) veterans.

The handset maker asked 300 cellphone users in each of eight metropolitan areas in the U.S., including New York; Los Angeles; Chicago; Philadelphia; Washington, D.C.; Boston and Denver, about where they send text messages.

Atlantans topped the charts when it comes to texting while at the dinner table (44 percent), the movies (48 percent), on dates (27 percent) and at church (15 percent). The city was beaten in only one category, texting while at concerts or plays, with Philadelphia residents indicating that 33 percent of them do it, compared with Atlanta’s 31 percent.

The most restrained SMSers appear to be in Denver, where only 17 percent said they text while dating and 8 percent while praying. Beltway residents were the least likely (23 percent) to text at the dinner table or at concerts, while Bostonians were least likely (51 percent) to text from the doctor’s office.

Read the rest of this post on the original site

Back on April 7, Tim Armstrong sent a memo to the long-battered troops of AOL about a 100-day vision quest the new CEO and chairman was going on to find out “how to bring back the magic of AOL.”

It is now Day 86, and Armstrong is closing in on the end of a Where’s-Waldo commitment that he made then to visit all of the far-flung offices of the Time Warner (TWX) online unit globally.

More importantly, as it is almost over, Armstrong also has to make good on another promise he made in that memo he sent to the staff on his first day:

“The culmination of the 100-day process will end in Dulles with an All-Hands meeting in mid-July. At that meeting, we’ll review the feedback we’ve received–both internal and external. We’ll also discuss our strategic direction for the coming years, and highlight areas that will bring AOL and AOL properties into the next decade of digital leadership. Most importantly, we will set a course and focus all of our resources to make that course a success.”

BoomTown is eager to see what Armstrong has found out on his trip and what path it will ultimately put AOL on.

So far, the broad outlines of his strategy seem to center on expanding AOL’s content assets, strengthening its advertising network and getting out of businesses the company cannot compete well in, such as social networking.

What other pearls of wisdom Armstrong has gleaned are to still to be revealed, presumably.

His corporate version of “The Amazing Race” is certainly a novel idea, born at his first all-hands meeting in Dulles, Va., which used to be the world-wide HQ of AOL and remains its heart.

There, Armstrong (pictured here) joked to the crowd:

“I know that work goes on across the globe and, in the first 90 days, I’m going to try to visit every office we have and sit down and talk to every employee and that will be something that my wife has actually agreed to let me do so.”

Thus, spouse-approved, the former Google (GOOG) exec has circumnavigated the globe and has held meeting with employees in a wide range of places: Dulles; New York; Baltimore; San Francisco; Mountain View, Calif.; Toronto, Lancaster, Pa.; Denver; Hamburg; London; Paris; Bangalore; Dublin and, this week, Tel Aviv.

But it has not been all tourism, in search of innovation.

During this time, Armstrong has also dispatched employees and top execs, such as advertising head Greg Coleman and communications and communities head Joanna Shields, and hired a few key staffers of his own; announced a pending spinoff of the company; and bought some stuff (including a company he funded).

It will be interesting to see what comes next–after the 100-day gathering in Dulles, which should come sometime after Armstrong’s July 15 deadline, of course.

Party on, Tim.