This might be an especially scary Halloween for creators of news and social readers such as Flipboard and Pulse. In the next month, they are going to have to battle two giants. Good luck with that.

Fe, Fi, Fo, Fum I Smell a New Market and I Want Some

In the next month, Internet behemoths such as Yahoo and Google will enter the new, but already crowded, news and social reader market. Yahoo is scheduled to enter the market first. Industry sources say that Yahoo will finally officially release Livestand in the next week at its Product Runway event. The reader was announced in February of this year as a tool to provide consumers content based on their interests and allow them to interact with the content by commenting and sharing. Yahoo said Livestand will include content from Yahoo properties such as Yahoo! News and celebrity gossip site OMG. In addition, the news and social reader will integrate with tools such as Yahoo! Finance and Yahoo! Mail.

Given the success of Yahoo’s personalized Today box, there is no reason to believe the company won’t get content targeting right in its new social reader. Although users will appreciate relevant content, publishers will appreciate the yellow brick road that Yahoo is providing. Livestand is an opportunity for Yahoo to strengthen its content business, now that the company has branded itself “the premier digital media company in content and context.”

Google will follow Yahoo’s lead. Google might have been preceded Yahoo if Flipboard had accepted Google’s purchase offer back in April. Flipboard declined. Left to its own capable devices, Google began working on its own HTML5-based social and news reader, and well-known geek guru Robert Scoble informed us on Google+ back in September that the project was underway. The project is code-named Propeller, but Google has not released details about what features or content will be available with the product. However, it is expected to launch with a multitude of media sources and deep integration with Google+.

The Growing Reader Market

News readers have existed for ages to read content from blogs and news sources that syndicated content as RSS feeds. However, as with everything else web-based, Web 2.0 changed users' expectations of how they interact with media. Tools such as Flipboad, Pulse and Zite emerged to meet those needs. These tools provide snazzy interfaces, rich interactivity and consolidate content from a multitude of social, professional media and other streams.

This is a new market, but one that is showing a lot of promise and not just because Google and Yahoo are entering the field. Flipboard raised US$ 50 million in its last funding round and has a US$ 200 million valuation. News giant CNN purchased Zite. A number of other media players are trying to determine how they can capitalize on the market.

There is no guarantee that any of these business will be successful, but the need for users to weed through massive amounts of content isn’t going away. Where there’s a need, there is money to be made, and somebody will determine how.