The InsiderOne Daily Report

  Monday, March 12, 2001

The Truth About Online Content

InsiderOne's Michael Goldberg writes: You have to get to nearly the end of "The Dreams of Webzines Fizzle Out," a New York Times story from Friday, March 9, to get to the info that actually matters. "From my perspective, a lot of the negative stuff that has been written about Internet content is from the perspective of Wall Street," Slate publisher Scott Moore is quoted as saying. "If you look at it from a user perspective, online content is not only alive and well, but thriving. The audience that matters in the end are not the Wall Street analysts or the media critics but the audience of readers, and they're voting with their mice." It's irrefutable that the Internet has become part of the lives of millions upon millions of people, extending its reach further with each passing year. And one of the things people do when they're online is read news articles and opinion pieces. Salon had 1.5 million visitors during January, according to Jupiter Media Metrix. That's more people than purchase an issue of that very successful offline magazine, Rolling Stone. had 3.5 million visitors; Slate had over 2 million. That's a lot of people coming to sites with intelligent, well-written articles geared to a smart audience. Noting that "almost all Internet businesses have suffered since the Nasdaq" tanked last March, the Times reports that "among the hardest hit were companies that provide online content, because despite flashy marketing campaigns and high-profile leaders, Webzines have yet to make money." My position has long been that content sites and companies are being judged by the wrong metric. Judge content sites by the quality of their editorial, and their success at attracting a meaningful audience — in other words, if is reaching 50% or more of the decision-makers and others with influence in the media business, it's reaching a very meaningful audience. At some point down the line, the Salons and Inside.coms of the world will certainly have to turn a profit. But as those in the magazine business well know, it can take half a decade or more for a new publication to become profitable. Why should anyone expect it to take less time for content sites? We're still dealing with a relatively new and constantly evolving medium. Does it really make sense to kill content readers want, just because the content-focused company is in the red? We've seen the ax fall at numerous news sites during the past year. We read that analysts and investors are now only interested in Web companies with a positive cash flow, or those that are going to move into the black in the very, very near future. We also see sites, desperate to survive, shifting their focus — even when they currently have quality content the public clearly wants. I don't believe this makes sense, no matter how you look at it. The actual costs of maintaining editorial sites, while not cheap, are well within the means of the corporations that now own many of these sites — that is, if they stopped the mega-million-dollar marketing campaigns, and truly leveraged their offline assets to market the online sites. Near the end of the New York Times story, this rather interesting (and crucial) info is revealed: "...the number of people who go online for news and analysis is growing faster than the number for any other medium, as happened with cable, television and radio during their infancies." Where there are people, eventually there will be successful businesses. Hey Wall Street! Are ya listening?

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Michael Goldberg is the president of He founded Addicted To Noise in 1994.

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