How Zite is bouncing back from its legal woes

Faith Merino · May 12, 2011 · Short URL:

After getting hit with a cease and desist letter, Zite has a new CEO and is shaking up its app

Back in March, iPad news aggregator Zite got hit with a pretty nasty cease and desist letter from an angry mob of news publishers (see below), including the Washington Post, the McClatchy Company, the Associated Press, Gannett, Dow Jones, Time, Getty Images, and more. Since then, the company has made a number of changes—including swapping out CEOs. At the time of the cease and desist letter, founder Ali Davar was still CEO, but since then, former Microsoft Senior Program Manager Mark Johnson has taken the wheel.

Johnson hails from Microsoft’s Bing division, where he headed a team of five program managers. He’s actually been involved with Zite since the beginning as an advisor, and he and Ali Davar had been discussing the appointment of Johnson has CEO long before the cease and desist letter. He made it clear that the letter had nothing to do with the CEO swap-out.

“He asked me four months ago, prior to launch,” Johnson told me.  “He was looking for someone with product/startup expertise who could take company to next level. When you’re a founder, you have to trust that this person will take this baby of yours to the next phase.”

So the question remains: why did Zite get hit with a cease and desist letter and not Flipboard or Pulse?

Actually, to be fair, Pulse ran into a legal snafu with the New York Times back in June 2010, when the Times sent a written notice to Apple stating that the Pulse app violated their rights. At one point the app was removed entirely from the App Store, but today it’s up and running and lets users see only a snippet of each article before redirecting them to the publisher’s website. Which is exactly what Zite wasn’t doing—and consequently landed them in hot water.

Previously, Zite aggregated news stories and reformatted them into a read-only mode—which knocked out the ads altogether. This is what sparked the ire of the publishing companies.

“By systematically reformatting, republishing, and redistributing our content on a mass commercial scale without our permission in your iPad application, Zite directly and adversely impacts our businesses… It deprives our websites of traffic and advertising revenue,” the austere letter reads.

“We were surprised we got a cease and desist, since all it would’ve taken was a one-line email,” said Johnson. As to how Zite is tackling the issue, Johnson explained: “We’ve got a product pipeline and we’ve released some minor updates. We did a lot of things to make the Web reading mode faster and added button on Web mode to take you to reading mode.”

He added that Zite is working with publishing companies to find the most efficient way to present the content to readers so that it will benefit both companies. In retrospect, this is what Zite should’ve done before it launched its app—it’s what Flipboard did, and it’s the reason Flipboard hasn’t been hit with a cease and desist letter. Flipboard established content partnerships with publishers before the app was launched.

But hindsight is blah, blah, blah… Zite is getting back on track, and Johnson is confident the team can work with publishers to get everything straightened out.

As for Johnson’s own vision for Zite, he said that in the immediate future, the team will be adding optimizations to the app. “Zite is browsing 2.0,” he said. It’s changing the way people consume search content. One advantage we have now is we’re getting lots of feedback. We have lots of users and they’re sharing how we can make the reading experience better.”

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