I hate to be the contrarian in the room, but sometimes, it’s too easy.
Fred Wilson is right to say that journabloggers don’t always do as much diligence as actual journalists for their stories.
Steven Hodson is equally right to say that this opens an opportunity for someone with more patience and a discerning eye to get the story right.
But guess what? It won’t happen, because the model does not allow for it. Last week, 24/7 RealMedia CEO David Moore observed that:
the Internet has been either dramatically underpriced or offline media is dramatically overpriced. Right now a reader of the Wall Street Journal might be worth a dollar, but for someone reading the online Journal you get a nickel. That’s 20 to 1 offline versus online pricing. You need 20 online readers to replace one offline reader. So when you talk about pricing overall I think the web is dramatically underpriced already.
In other words, newspapers have the luxury of hiring actual reporters and providing them with researchers and fact-checkers (at least some) because their inefficient model allows them to do so. As the downward spiral of cost-cutting in publishing continues, then newspapers will have to compete with the same blogs and journalists too will be asked to put the pedal to the metal and publish more in less time.
The net effect of this will be a tradeoff between accuracy and speed. In fact, since I’ve began commenting on the industry and publish such commentary, I’ve noticed that traditional media is usually a few days (not hours, days) late to report on story. Is it because we’re better than them? Of course not. In fact, I actually have a full time job yet I manage to pontificate on stories and rumors much faster and oftentimes in more depth (not bragging, just based on people’s feedback, and let’s face it, not sure if my verbose prose is even a good thing).
I’m not alone, as Fred Wilson points out, there are countless of actual blog networks dedicated exclusively to cover stories that beat journalists and traditional publishers to the story. They are in the business of reporting, I am not. I have a separate focus which is WatchMojo.com, a producer of video content.
Traditional media does some diligence and investigates stories and checks their sources. Generally speaking, we don’t. Or rather, the cutoff for what passes off as due diligence is lower than what it is for traditional media.
My concern is different: Personally, I always ask myself if what I am saying crosses some kind of ethical line as an executive operating in the space with sensitive, private info. When YouTube or Revver or Google does or says something, I know when it’s real and when it’s BS. It does not mean I will write about it.
But Tech Crunch, Giga Om, RRW, etc., do not have to worry about that because they are full-time writers. It is their mandate to call on BS. The flip side is that one would hope they check sources and what not, but I doubt they do all the time because these now compete not only with traditional media but with one another. Within one another, it’s a freefall for what passes off as accurate information and not hearsay.
This race towards the lowest common denominator for what passes off as actual facts and not innuendo and rumor is both good and bad… but ultimately, given the obsession over growing digital, because, again to quote Mr. Moore:
I haven’t spoken to anybody who thinks media fragmentation is going to stop. I think we are dramatically underpriced compared to offline. The amount of money newpapers and magazines have been getting per thousand is outrageous. Newpapers and magazines are still getting roughly 30% of all advertising expenditures–yet if you look at their share of media usage, they’ve got between 7% and 9%. Thats why they’re having so much trouble.
I suspect that the actual journalists will start to emulate the journabloggers and not the other way around. Why do I know that? Just trust me, I do.
More commentary on this from Mathew Ingram, an actual journalist, who also blogs.
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WatchMojo NewsletterFrom the time MSFT launched an unsolicited takeover bid for Yahoo! and earlier this week, we covered every angle of the story possible, to the point that one of our readers asked, WTF?
We decided to tone it down a bit, but it’s been a few days since we talked about the deal at all, so it’s high time we dust off the dossier and look at what’s happening. The storyline is mezmerizing, a real soap opera.
1. Yahoo! Board: Divide and Conquer
Roy Bostock serves on the boards of directors of Morgan Stanley (who is representing MSFT, by the way), Northwest Airlines and Yahoo! He was the Chairman of Yahoo! for all of one day when MSFT launched a somewhat-hostile bid, helping up the price of Yahoo! stock from $18 to $29. If that does not spell out “effective Chairman” I am not sure what does.
On a more serious note, by virtue of not being your typical wine-growing, hippie-loving Silicon Valley type, Bostock understands that a Board’s obligation is to represent shareholders and a Chairman in particular serves as the liaison between management and investors.
It is the Board’s fiduciary duty to do what is best for shareholders, and as such, it’s not surprising to see Bostock lining up on the side arguing to accept MSFT’s bid, albeit he will probably try to up the bid to the best of his abilities. Bear in mind, Morgan Stanley represents Microsoft in this matter. Does that matter? You better believe it, he’ll be able to relay the message that a higher bid will grease the wheels enough to make accepting MSFT’s offer a fait accompli. More importantly, Morgan Stanley - along with Lehman Bros., Goldman Sachs, Blackstone and Moelis & Company - stands to make major fees if the deal goes through. If Morgan Stanley were repping Yahoo!, I’d still make this case (after all, bankers are not volunteers), but the fact that Morgan Stanley is repping MSFT and Mr. Bostock sits on the board of both Morgan Stanley and YHOO should not be taken lightly, especially after all banks have been hit heavily with losses in their sub-prime business. For the record, in no way am I suggesting impropriety or anything, but if anyone knows about the importance of heavy hitters on one’s board to pull strings, it should be Valley citizens. As a result, Bostock is torn and faces conflicts of interest, but to quote Silicon Valley dean and Kleiner Perkins VC John Doerr, “no conflict, no interest”.
For YHOO CEO Jerry Yang, an architect of the Web’s first iconic brand, the lesson is simple: if you want to run a company emotionally then:
a) don’t take your baby public
b) choose your allies (ie. board members) carefully
c) set up dual-class shares and keep voting control, as the Google guys did.
2) Cutting the Fat at Yahoo!
Some time ago (before MSFT’s bid) I asked if Jerry Yang was secretly trying to reduce some of the fat off Yahoo! to position it for a sale. Clearly, seeing his aversion and allergic reaction to MSFT’s bid, I now doubt that is the case. But I will say that Microsoft is welcoming seeing both layoffs and resignations at Yahoo! It will make integrating Yahoo! much simpler, from a management, accounting and strategic perspective.
In fact, I think the market is speaking loud and clear: they are welcoming layoffs and resignations at Yahoo! in what can only be described as a vote of no-confidence at Yahoo! and a suggestion that Microsoft management can do a better job managing Yahoo!’s assets. Given MSFT’s torrid growth at its core operations, it’s not an incorrect conclusion, frankly.
3) You Always Have Other Options?
Let’s see. Last week, the AOL/Yahoo! merger came up. We shot it down as nonsense. Earlier this week, the News Corp. hookup rumor crept up again. More nonsense. Why would Rupert Murdoch do that? He’s getting $900M in guaranteed revenue from Google… why would he totally give up control of Fox Interactive Media (which he built with $2B) for a chunk of Yahoo! that he cannot really control day-in, day-out, nor consolidate its financials, for that matter… so not surprisingly, the desperate Yahoo! camp is now once again touting the AOL merger talk, which we are convinced won’t happen.
4) Behind the Scenes
I expect members of Yahoo!’s Board to start having discussions with MSFT’s bankers and lawyers, if they’ve not already started doing so.
You might have noticed that when Yahoo! first rejected MSFT’s offer, the press release mentioned that the Board members had their own external counsel. Usually companies have Directors and Officers insurance that covers them against many things including shareholder lawsuits. For them to publicly mention that they have their own counsel suggests far more dissent than you would think. My gut says that a few of the Board members are considering resigning and the fact that they went public - albeit somewhat anonymously - with accusations of Yang’s emotional reaction to the offer was a warning to Yang et al.
As well, you might have noticed that missing in all of this is President Sue Decker. I am not sure quite what to make of the following, but Microsoft has just hired Decker’s former colleague, Blackstone’s Jill Greenthal. As I mentioned last week, the behind-the-scenes of the MSFT/YHOO showdown will create a far more interesting tale than what you see in black and white in press releases and what not.
We were one of the first ones to outline the cross-ownership between the two companies, but unlike most, our conclusion is that these shareholders want a quick resolution to what is not starting to look like the inevitable. As a result, if you connect the dots you start to see this deal coming to a “friendly” agreement at $50B.
5) When the Silicon Valley Dream Died
The bigger storyline here, I think, is the following. Reading Michael Arrington’s observations on Seattle vs. Silicon Valley, he stated: “If you want to change the world and are willing to do absolutely anything to achieve your dreams, there is no better place to be than [Silicon Valley].” He is probaly right… but when MSFT ends up gobbling YHOO, a lot of the facade and innocence (if you can call it that) about the Valley will go down the drain.
This is by no means a knock at the Valley. But the premise of starting a company and taking it public evaporated in March 2000 when the Nasdaq got decimated. But for many in the Valley who dislike and distrust MSFT, seeing all-around nice guy Jerry Yang have to lose control of his purple baby to Redmond will probably make a lot of, or least some, realize that going for the jugular isn’t all it’s hyped to be if it means seeing it go the way of Yahoo!
Note: Long YHOO.
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