IN REVIEW: PLOT TWISTS IN THE DOT.COM DRAMA?

BY FRANK HOUSTON

In the two years I worked as a writer and editor for Fox News Online (1997 and 1998), News Corporation's chief, Rupert Murdoch, visited our Manhattan offices exactly twice. Roger Ailes, who runs Fox's news network, came once, for a rally-the-troops talk. The rest of the time we generally heard nothing about what corporate executives thought about our little experiments with journalism on their Web site.

The flow of new equipment and personnel seemed endless. The stock market bubble, then still filling with hot air, was big news. Then, last spring, the bubble burst, and corporate bosses everywhere were suddenly paying rapt attention to their digital properties. In January, Murdoch shut down the office and laid off more than 200 people at the FoxNews and Fox Sports Web sites, part of a cut-and-run strategy that brought the online operations under the control of their respective television networks, a strategy adopted by CNN two weeks later.

The Industry Standard runs a "layoff tracker" on its Web site (http://search.thestandard.com/texis/trackers/layoff). As of February 26, it counted 59,237 jobs as lost since December 1999, a significant portion of them media jobs. In January, the magazine's own parent company, Standard Media International, laid off 36 employees (7 percent of its staff); New York Times Digital, citing a softening in the Net advertising market, eliminated 69 positions; Disney said it would lay off 400 and abandon Go.com, its Internet portal. And the list goes on.

You won't hear much cheering, but few argue with the sense of inevitability that greets each new round of layoffs. New Media has become part of Big Media, and, thus, Big Business. A lot of experts feel that those large staffs and editorial budgets were just as unrealistic as the high stock valuations that allowed them to exist in the first place. "Everybody wanted to show that they were going to fight this oncoming juggernaut head-on, by throwing tons of resources at it," says Joshua Quittner, managing editor of On magazine, and a veteran of early Internet journalism. "But this was a real Vietnam. This was not a problem that more manpower could solve."

Even the new behemoth, AOL Time Warner, is subject to the same growing pains. John Pavlik, executive director of the Center for New Media at Columbia, says AOL/TW can help set online standards high. But, he adds, "with AOL laying off an estimated 2,000 and CNN laying off an estimated 400 people, 130 of whom will be from CNN.com, online journalism may take a pretty severe hit."

With fewer journalists acting within tighter budgets under increasingly cautious executives, there's no question that online journalism is at least temporarily diminished. As people file out the door, morale is usually not far behind. Ideas that drive the medium forward, experiments that will one day create a unique mode of news delivery, are not exactly nurtured in the gloom.

But retrenchment in the industry isn't likely to put a permanent brake on the progress of Web journalism. In a time when profits remain elusive, it's not surprising that executives question the wisdom of having separate reporters -- network and online -- covering the same beats. In the case of CNN, this means that a unit that now distributes headlines to pagers and other wireless devices will also write for CNN's Web operations.

The challenge for all "brick-and-mortar" media online has been to take advantage of a known brand and, at the same time, extend it in a new direction. This game has been played largely with text. Independent "pure play" content sites, with their IPOs, marketing gambits, and attitude, have garnered a big share of the online journalism spotlight. Salon and Slate distinguished themselves with original takes and literary flair, while others, such as the award-winning (and moribund) APBNews.com and TheStreet.com, offered intensity and depth. Some of these sites will stick around, though their long-term survival is far from assured. But without a distinctive voice or a laser focus, news sites are left with headline news. And headlines, as Quittner puts it, "are as fungible as water at this point."

But text is not the only possibility. Broadcasters -- and newspaper companies with broadcast holdings -- have relied on text to reach the widest possible audience. Their ultimate advantage may lie in their inherent strength, the moving image. Broadcasters dealing in text narratives are like restaurants that are tweaking the menu while the dirt road outside is widened into a federal highway. That new road is broadband technology, and as a majority of the wired population comes to embrace it, video will play a greater role in online news. If there is to be a new kind of online content, the adoption of broadband is its likeliest catalyst. "We're working on visual presentations of the news that are not just a duplication of television, but that take the best of the Web and the best of television and make that a better experience online," says Jim Walton, president of CNN Networks/USA for the CNN News Group.

Most of big media's boldest experiments in online news are yet to come. Indeed, a new kind of content may be no further off than it was before the bubble burst. Who knows? Maybe by the time they find it, they will have also found a way to pay for it.