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Whew! Been readin' and readin' and I guess it's time, way past time, to tackle the questions and comments about the closing of the Workshop, the future of this board, Elan's layoff, and the whole Value Line mess.

Things are sort of tangled. I've been reluctant to make this post because... well, you all know how some people look for the darkest motive and assume that it's the true one. I'm flat out afraid that I won't explain things clearly, and that the tangled nature of this whole mess will make it look like I'm offering "convenient" explanations rather than the bare truth. Someone has already suggested that because I didn't post something last week when I said I would, I may have been prevented from telling you what was going on. And after the reaction that David's post got, the last thing I'm inclined to do is tell the truth and say that I didn't post earlier because I didn't feel up to it—a combination of depression, laziness and the urgent need to buy a new dryer.

Let's start with the future of this board and the message boards in general. At one point we thought we would make a ton of money from these boards. The company put a lot of time into developing them and adding features to make them pretty darn good. That's a sunk cost, and it's a good thing it is sunk because the advertising model for message boards has collapsed. And that's not too surprising when you think about it. I know that I never even “see” the ads on these boards. I've trained my eyes to ignore them.

One thing about the internet—it's paradise for advertisers. They can track exactly where every lead they get comes from. (That's very different from print and broadcast ads. Unless there is some kind of special offer, coupon, rebate or whatever, it's rather difficult to track how effective an ad is.) Advertisers aren't dumb. The whole penny per eyeball model is gasping on the beach and even click-throughs models are about to go under. The new model for internet advertising is “pay for performance” meaning if someone on your site clicks our ad, comes to our site and buys something or fills out an applications, or something tangible, THEN we pay you.

Message board ads have to be the worst possible venue for that kind of model. Rates for message board spaces are pitiful, already. I don't know exactly what they are right now, but if we could get a penny per click in here, Elan would still be king and I would be lobbying for a raise for both of us.

Before you start packing, I'm not trying to suggest that the boards would ever be closed. As I said, their development is a sunk cost and they do generate some revenue—just not the fortune that last year's ad rates lead us to expect. And despite rumors to the contrary, the company loves the boards and the many and varied communities that have developed here. I'm not using the word love lightly here. I applaud the efforts being made to back up the board, but I can assure everyone that there are no plans to close the boards. It's not something that is being considered and there would be no business reason to consider it.

Next topic:

The Future of the Workshop and the Value Line Problem

This is really tangled.

Please understand that I have to be polite.

Blocking the Workshop was not our idea—not in any way. We got hit with a bolt from the blue. Those of you who complained about the abruptness of the closing—yep. It sure was. I can't say we didn't have a choice because of course we could have gone to the mattresses, but that would take resources that we, obviously, don't have right now.

I still don't know how the whole thing with Value Line will play out. If this had happened last year we would have fought it much longer than we did. We made some serious, very high-level efforts to resolve the problem which were not successful. This is something that should have been solved quickly and easily, but it didn't work out that way. At this point I am trying to get the archive material (minus the rankings and returns) made available, but the Workshop portfolio and Workshop area are being discontinued until such time as we come to an arrangement with Value Line. Don't hold your breath.

This is the tangled part. If it hadn't been for Value Line's problem with our use of the Timeliness 1 rankings, we would not have closed the portfolio and the Workshop area, but we were already in the process of cutting back. Even before the VL thunderclap hit, the Workshop area was under severe scrutiny. The cold hard fact is that the readership of the area was too small, even with the Foolish Four brought into it. The activity on the message board was nice, but contributed very little to the bottom line. We were desperately scrounging around for a way to generate cash (remember the survey?) because the ad revenues were not enough to cover the cost of maintaining the area. We considered selling the rankings and portfolio picks, a seminar and asking for tips. I don't know about the tips, but the numbers weren't there for the other ideas.

You can second-guess Fool management all you like, and I suspect they have the usual brilliant-move-to-boner ratio, but things have changed so rapidly in this business that I don't think anyone could have kept up. (If someone would just arrange for us to get $30 per 1000 impressions again, we will put everything back the way it was.)

In the meantime, the Fool is going to have to change its business plan and do it fast.

The Layoffs

Losing Elan was a tragedy but I suspect that the worst part is the ill will that it has generated. I'm to blame for that. Elan might not have been taken by surprise if I had done my job better. For all the wonders of telecommuting, there are times when it has serious disadvantages. Next time I'll know better, but god, I hope there isn't a next time.

For the record, I wasn't in on the layoff discussions and had no input. The decision was based on the position, not the person. The position has been precarious for a long time. Everyone at the Fool who knows of Elan's work, and you might be surprised at how many do, considers him an outstanding community builder – the best at what he did for us.

The Future of the Workshop

A fair number of you (and I'm one) have worried that too much publicity could be a serious problem for the continued viability of some of our screens. The trade-off was that the publicity also brought in new participants. Still, I dread the day when a mutual fund manager notices the PEG. Well, that's much less likely now. The main thing that the Fool contributed to the MI community has been a forum that would attract “new blood.” With some luck, maybe this community has reached a critical mass that lessens the need for new faces and new ideas. They would still be valuable, but perhaps at some point. the risk of overexposure would outweigh the value of new people. I don't know. At any rate, for now, there won't be any new Workshop articles to attract attention. I suspect that we will do just fine.

I'm sure I haven't covered everything that everyone has been wondering about, but I will be happy to answer what questions I can.

Cross posted on the MI board

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