September/October 2000 | Contents

COUNTERPOINT

Counterpoint provides an opportunity for those who disagree with what is published in CJR to express their point of view. Hoag Levins is vice president and executive editor of APBNews.com, which struggles on while searching for new funding. He responds to CJR's July/August cover story, "Turning Point: Online Media Face Reality."

DOT-COM DOUBTS? I DOUBT IT

BY HOAG LEVINS  

On June 5 -- Black Monday, as we called it -- more than eleven dozen of us gathered in the sprawling newsroom at APBnews.com to hear our c.e.o. tell us that the company was broke. The news and reaction flashed around the world:

"Dot-Com Pendulum Swings Toward Gloom," trumpeted The Toronto Star.

"Internet mania has finally, decisively, burned itself out. The future now belongs to companies that can deliver -- of all things -- real profits," gloated Fortune.

"The summer of 2000 feels like a turning point for dot-com journalism," announced cjr, ". . . Exhibit A is APBnews.com."

The inference seemed to be that the collapse of APB and cutbacks at a slew of other news Web sites somehow proved that the very concept of independent journalism on the Internet was in trouble.

What a ridiculous notion.

What all the tumult actually demonstrated was that an infant industry supported by wildly unstable financial sources was suffering its latest round of growing pains. And no matter how the Internet publishing business mutates, it will always revolve around journalism and journalists -- although for practical, rather than moral reasons.

Throughout the history of modern mass communications in democracies, there has never been an emerging medium that was not ultimately dominated by journalistic concerns for accuracy, fairness, and ethical publishing conduct. Mainstream audiences and advertisers have always gravitated toward journalistic credibility and they will continue to do so on the Internet.

However, the question of whether credible Web publishers will make money any time soon is something else. Wall Street's new dot-com mantra, "profit now or die," seems unrealistic, given the current state of the Internet's evolution. The base of potential advertisers and e-commerce customers is still far too thin to support the kind of advertising enjoyed by newspapers, radio, and television.

Incredibly, some pundits have even suggested that the explosive growth of online advertising spending is proof of the Internet's failure as a publishing venue. In the July/ August cjr, for instance, James Ledbetter points out that despite $4.6 billion spent on Net advertising in 1999, the online business model still isn't profitable. He suggests there is little potential for successful Web publishing enterprises because the huge number of new pages steadily created on the Web will "eventually dilute" any single site's ability to attract sufficient readers or ads.

In fact, the vast and serendipitous nature of the Web's structure has given rise to its most successful new publishing business models: the search engines and topic indexing sites that get tens of millions of visitors daily. These giant portal sites clearly show how loyal online audiences and advertisers can be aggregated. Sites like Yahoo!, MSN.com, Excite, Lycos, and AltaVista enjoy the Web's highest levels of advertising revenue.

These portals also have voracious appetites for original news and feature material that they can't produce themselves. Knowledgeable editors and publishers at stand-alone sites, like APB, know they must produce this content and find ways to push it, via live links, out to these portal sites. APB syndicated its daily news feeds to more than twenty affiliate portals. Every day, people clicking on our headlines on those portals came directly back to us. Even five weeks after Black Monday, as APB operated with only a skeleton crew and no advertising or promotion of any kind, we were still logging more than 500,000 page views a day (according to APB's internal count) -- in part because we continued to feed our story links out to portal affiliates.

The real problem of the last few months has been one of vision. It used to be that savvy investors knew they were buying into something that was going to happen but hadn't quite yet. But since April, Wall Street's bean counters have been squinting into cyberspace and seeing only as far as the next dreary quarter. Peter Lynch, the fabled Fidelity Magellan investment guru, preached that close observation of your daily world is one of the best ways to visualize the future. This is how Lynch discovered the investment potential of little-known enterprises, such as Dunkin' Donuts, before they went on to become American icons. It didn't take a team of analysts or weeks of crunching numbers to understand what was going on with Dunkin' Donuts, Lynch noted. You only had to eat the donuts and watch the crowds.

Understanding the prospects of the Internet is something like that. Look around you. See the collective glow of browser screens throughout the offices and homes you visit. Walk through an elementary school and watch the eight-year-olds doing the day's links. Stand back and contemplate the meaning of all this. We are not just wiring classrooms or dormitories or lecture halls. We are wiring the sensitivities, lifetime habits, imaginations, and expectations of entire generations of new readers and consumers.

From behind the donut that I'm eating, I can see a near future in which a high-speed, broadband Internet will become the core around which all communications and advertising interests revolve. That Internet will ultimately be the richest venue advertising has ever known because, in effect, it will be all media venues seamlessly interconnected to one another.

Sixteen floors high and staring out at the Manhattan skyline from the wreckage of a once-flourishing online newsroom, I can also see this: the same Internet will offer journalists the greatest opportunities and most perplexing challenges they have ever faced.