June 15 - 22, 2000
![[Don't Quote Me]](/standard/image/headers/dont_quote_me_header.gif)
"Once we get to profitability, which we're projecting to be a year from now," he [Salon editor and founder David Talbot] adds, "we will be a good candidate for an IPO." He says the three syllables Eye-Pee-Oh with a kind of naughty relish, the way you can imagine Humbert Humbert saying Lo-Lee-Tah. Slash dot-com
Salon's financial woes nix the dream of IPO riches for journalists. So what works online? Try small, passionate, and cheap.
by Dan Kennedy
-- Wired, January 1999Like Nabokov's anti-hero, David Talbot moved quickly -- and disastrously -- from desire to consummation. Despite nothing but losses, and lacking even a plausible theory for how to change red ink to black, Salon had its IPO just six months after the Wired piece appeared. If you bought in on opening day, you could have had a share of stock for $10.50. Not long after, the stock reached its high of $15.17. The closing price this past Monday: $2.
Last week was an ugly one for Salon, the ancient (that is, nearly five-year-old) San Francisco-based news-and-culture Web site best known for provocative columnists such as Camille Paglia and David Horowitz; smart coverage of topics such as politics, technology, and sex; and embarrassing stunts such as writer Dan Savage's claiming to have licked the doorknobs last winter at Gary Bauer's Iowa headquarters when he had the flu. Facing a reported $7 million deficit, Talbot laid off 13 of his 150 employees -- including his wife, Camille Peri -- thus decimating Salon's coverage of media, books, and travel.
Salon is hardly alone in its misery. With the bloom finally off the dot-com stocks, media ventures are being hit hard. APBNews.com, which covers crime news from around the world, is broke, hoping against hope it can scratch up some more venture capital and resume operations. CBS has drastically downsized its Internet division. TheStreet.com, which, like Salon, went public a year ago and made its editor, Wall Street Journal expatriate David Kansas, a very rich man, has seen its stock price plummet, and may have to abandon its user-unfriendly subscription-based model. Next up is New York media maven Kurt Andersen's Web site Inside.com, which will charge subscribers about $200 a year for the skinny on movies, television, books, magazines, and newspapers. The verdict on the pre-launch version: not bad, but hardly compelling enough to justify letting Andersen hoover your wallet. What was he thinking?
Then again, what were any of them thinking? The idea that journalists could become multimillionaires just by doing journalism was always ridiculous. Reality was kept at bay as long as the NASDAQ seemed immune to the laws of finance. Now, though, the alarm has gone off, and it's time to wake up and figure out where Internet media are going. The answer may be familiar to anyone who remembers those future-of-the-Net discussions from the early and mid '90s, before money fever set in: the online world favors community over hierarchy; interactivity over passivity; and small, intense groups of participants rather than mass, sheep-like audiences. In other words, if the bubble has truly burst, then it may be back to the future.
"The idea of critics getting rich was a pipe dream, I guess," says Dwight Garner, who left Salon several years ago and is now an editor for the New York Times Book Review. "I still hold out hope that Salon can pull a rabbit out of a hat, but it [financial viability] was always one of the questions that nagged. But then came the IPO, and you just wanted to click your heels and believe."
The dot-com cash squeeze underscores an important lesson that has been forgotten during the frenzy of the past couple of years: the Internet is just another medium. In the print world, high-quality, general-interest magazines invariably lose money, and exist strictly at the indulgence of well-heeled backers. The New Yorker has Si Newhouse; the New Republic has Marty Peretz; the Nation has Paul Newman. Salon's principal online competitor, Slate, is a wholly owned division of Microsoft, thus exempting editor Michael Kinsley from the kinds of day-to-day financial problems with which Talbot must contend. (Question for Judge Thomas Penfield Jackson: is Slate part of the operating system or is it an application program?) When Kinsley and company realized they had made a mistake by charging $19.95 a year for subscriptions, thereby pissing away most of their audience -- are you taking notes, Kurt? -- they simply dropped the idea and returned to all-free content. No muss, no fuss. Certainly no big deal to Bill Gates's checking-account balance.
Salon CEO Michael O'Donnell recently told Inside.com that there was "too much value locked in" to sell out, but it's not likely that anyone was fooled. Here's a suggestion: dangle Salon in front of Apple's Steve Jobs, who loathes Gates and might relish competing in an arena where Apple and Microsoft would be more evenly matched. But though that might be a solution to Salon's woes, there's no question that something would be lost. With a handful of media conglomerates controlling most of the film, television, and movie studios, book publishers, newspapers, and magazines, media activists have always held out hope that the Internet would be a place where independent projects could continue to thrive.
The thing is, independent media can thrive on the Net. It's just that independent media that look too much like the mainstream may get left behind -- including Salon, which, despite its hip, alternative tone, is essentially a mainstream magazine that just happens to be published on the Web. Indeed, Salon and Slate may be the two of the better general-interest magazines to have been launched in the 1990s (suck-up watch: I have written for both, and would like to do so again), but that doesn't make the Internet a particularly hospitable medium for such publications. After several years of mounting dot-com losses, culminating in the recent stock-market decline, perhaps it's time to realize that the original vision of the Internet, as outlined in Howard Rheingold's 1993 classic, The Virtual Community -- decentralized, democratic, individualistic, and fueled by passion rather than money -- is actually the one that works best.
"Slate and Salon are literal re-creations of print magazines," says media critic Jon Katz, who writes for the technoid Web site Slashdot.org. "They have some very good stuff, but the Internet is all about not being walled enclaves." Katz believes Salon has faltered at least in part because it moved away from its original interactive vision and became increasingly obsessed with media, which he thinks is a turnoff to all except other media people. "The reality of the 21st century is that Tina Brown is not an important person in media," Katz says. "The housewife who gets 800,000 hits on her quilting Web site is important."
So what works? The key is to be small, quirky, passionate, and not particularly dependent on large infusions of cash. Say what you will about Matt Drudge, but his Drudge Report remains the prototype for how to put together a successful online media project. At the peak of his influence, from 1996 through the 1998 impeachment drama, Drudge was earning a reported $30,000 a year, holed up in his California apartment. Yet his Web site and his e-mail dispatches -- from Lucianne Goldberg's lips to his keyboard -- were must-reads for anyone in politics or media. Nor has he entirely lost his juice: Tina Brown's Talk Miramax Books recently dropped plans to publish a gossip-and-sex-mongering book on former independent counsel Ken Starr and his merry band of investigators after the project was exposed by Drudge.
Drudge may be the best-known model, but he is hardly alone. Veteran journalist Mickey Kaus last year started his own KausFiles.com site as an outlet for his acidic media commentaries, which are now reprinted by Slate. Investigative reporter Robert Parry, formerly of the Associated Press and Newsweek, does an end run around the mainstream with his Consortium News site. Harry Knowles has become a force in the film industry with his fanzine site Ain't It Cool News. On a somewhat larger scale, Feed has managed to emulate at least some of Salon's and Slate's editorial success without burning through millions of dollars of other people's money.
Of course, doing important work for a small Web site can be of limited value if you can't get the word out. But the Internet has made that easier, too. Consider the case of Al Giordano, a former Boston Phoenix staffer who recently started the one-man NarcoNews.com site to report on the corruption fostered by the US drug war in Mexico. "I earn half the money that I earned as a political reporter," says Giordano. "And I live in Latin America, which lowers my daily overhead considerably. I couldn't do this from New York or Boston at my current income level. I'm not complaining. I'm having a blast." Giving Giordano's work reach and influence beyond what he would be able to accomplish on his own are what might called "metasites" -- heavily trafficked Web sites that consist almost entirely of links to offsite content. Two that have featured Giordano's dispatches are the Media Channel, a left-leaning project started earlier this year by former Boston TV and radio journalist Danny Schechter, and MediaNews.org, which, at least among media insiders, is the hot flavor of the moment.
The Media Channel and MediaNews.org couldn't be more different. The Media Channel, with a worldwide reach and more than 400 affiliates (including the Phoenix), is a big-budget operation, and Schechter spends much of his time pursuing foundation money. MediaNews.org is the one-person project of Jim Romenesko, a former magazine and newspaper reporter who started the site last year as a hobby (it was then known as MediaGossip.com) and now does it on salary -- no stock options, thank you very much -- for the Poynter Institute. Where Schechter and Romenesko converge is that both are pursuing their passions, and neither has any visions of dot-com millions. "I'm fully aware that I'll never be rich," says Romenesko, who nevertheless sees a bright side: he's now making what the senior editors at his former paper, the St. Paul Pioneer Press, were making, "and I don't have to manage people." Says Schechter of the Media Channel: "We don't see this as generating billions of dollars. I'm not necessarily against the impulse to make money. The problem is when the impulse to make money leads to the dumbing-down of content."
One journalist who's seen both sides is Brock Meeks. In the mid 1990s, his one-person, free e-mail newsletter, CyberWire Dispatch, chronicled, in scatological style, various regulatory and legislative outrages being perpetrated by federal officials just as the Internet was getting off the ground. Meeks remains outspoken. Of the expectation that journalists would make millions, he says, "I don't know what they were thinking, other than the fact that they were greedy bastards." Of Salon's recent woes, he says, "Once in a while I see something interesting coming out of Salon, but most of the time I would say, 'Who gives a shit?' "
But CyberWire Dispatch is pretty much on hold these days. For the past several years Meeks has worked as chief Washington correspondent for MSNBC.com, the Microsoft-NBC joint venture, writing for the Web site and appearing on MSNBC's cable shows. It's a long way from his previous independence: Microsoft, of course, is run by Bill Gates, and NBC by General Electric, whose chairman, Jack Welch, has done much over the years to make sure that the network has nothing untoward to say about GE's nuclear power plants and military weapons systems. MSNBC also has a content partnership with the Washington Post Company, whose holdings include the Washington Post and Newsweek; its sister cable channel, CNBC, partners with the Wall Street Journal.
Meeks still believes that small projects can have an impact on the Internet. But the future, he says, is in huge "aggregations" such as MSNBC, which offer "a lot of quality journalism in one place." He adds: "That's how you attract ads, and that's how you make the money." Meeks may be right, but his is a disconcerting vision. A study released this week by the Pew Research Center for the People and the Press found that younger news consumers are turning increasingly to the Internet, and that they prefer big, established news sites such as MSNBC.com, CNN.com, and ABCNews.com. It's inevitable but nevertheless unsettling that the same corporate conglomerates that dominate traditional media now also dominate new media.
The unfortunate truth about a Web site such as Salon may be that it's stuck in the middle -- too big to live off the land like NarcoNews.com or MediaNews.org, and too small to survive on its own. "I think Salon prides itself on being one of the few independent media organizations out there," says Washington-based staff writer Jake Tapper. "I like the fact that we're independent. I really do. How long we will be able to hold out, I don't know. Hopefully forever."
Forever is a long time. Don Hazen, executive director of the San Francisco-based Independent Media Institute, offers what may prove to be a more realistic assessment. "The Web was supposed to be much cheaper to do, and it turned out to be more expensive than anybody thought," he says. "I'm a big fan of Salon. I read it every day. But I was always skeptical of the Salon model, and I'm really surprised that they've gotten this far."
Here's hoping Salon survives -- either on its own or under the sponsorship of a benign, deep-pockets owner. But regardless of what happens, it's too soon to give up the vision of the Internet as an incubator for outside-the-mainstream media. Just as long as no one thinks he's going to get filthy rich in the process.
Dan Kennedy's work can be accessed from his Web site: http://www.shore.net/~dkennedy
Dan Kennedy can be reached at dkennedy[a]phx.com
Articles from July 24, 1997 & before can be accessed here
