An oral history of the epic collision between journalism and digital technology, 1980 to the present

A project of the Shorenstein Center on Media, Politics and Public Policy

Archive for May, 2013

Chapter 7: The Nerds and The Newsies

December 14, 1995: NBC CEO Robert Wright and Microsoft chairman Bill Gates announce MSNBC. (AP/Marty Lederhandler)
The very core of the revolution that was now underway was technological, with every new advance being driven by innovations in computer engineering. And yet, for the most part newspaper and magazine companies didn’t initially make significant engineering investments in their digital businesses. They viewed engineering as a means to an end — plumbing — a way to enable their core journalism to travel around the world through this magical new distribution channel called the World Wide Web. Engineers were expensive to hire and engineering just wasn’t in the DNA of most publishers; these companies had run for decades on delicate balances of power among advertising sales, consumer marketing (circulation), finance, and editorial departments.
Looking back now, though, it seems clear to many that this oversight severely hampered the ability of the publishing industry to — in the metaphor coined by ice hockey’s Wayne Gretzky — skate to where the puck was going to be. The failure to embrace the value of engineering led to an inability to sufficiently innovate in the field. Google chairman Eric Schmidt was particularly blunt on this topic.

Do you think that the industry hasn’t innovated enough, in terms of the actual construction of the story? If so, why do you think that has happened?

I think there’s a very simple explanation. The industry has no engineers….I am just laying out the facts. You cannot innovate and build new products without engineers in your field. If you don’t have them, you have to find somebody who does and partner with them in a clever way.

Eric Schmidt recalls the invention of Google News and its initial editorial bias for cricket.

Schmidt isn’t alone in this view. Will Hearst, a graduate of Harvard with a degree in mathematics, has been a newspaper writer, editor, and publisher, but also a successful venture capitalist at Silicon Valley’s Kleiner Perkins Caufield Byers, where he has backed many engineering-led companies. Today, he is Chairman of the Hearst Corporation, the media giant founded by his grandfather, which has major interests in everything from newspapers and magazines, to TV stations, to a big chunk of cash cow and sports news leader ESPN.

John Huey

You have a lot of people, Eric Schmidt is one of them, who said to us one of the big failings of the publishing industry was that it never really valued the engineer.

I agree with Eric on that.

John Huey
[Nicholas] Negroponte said the same thing.

I agree thoroughly. There was a long stretch of time when some of us were telling the traditional media companies, “Look back on your own recent history.” There was a time when the people who were in the art department were not considered very valuable. Then when Al Neuharth and USA Today came in, all of a sudden, the guy from the art department that did the charts and the graphs got to sit in at the news meeting. Those people were taken seriously as part of the senior council, but you’ve never brought the engineers into that meeting. They were always replaceable, hirable, outsource-able, unimportant people.

Will Hearst on the important and creative skills at newspaper companies that were pushed out over time.

The modern media value proposition is being made out of technology, and so the people that do that aren’t even in the meeting. They don’t even get to vote. That was a big thing….

I agree with Nick and with Eric. You needed to celebrate engineering as a creative craft, as a journalistic, creative profession, like photography, like illustration, like editing. These skills don’t grow on trees.

Former investor and board member Art Kern made a similar observation about the founders of Yahoo.

Literally, as a matter of fact, Jerry [Yang] and David [Filo] were rocket scientists. They did some work at NASA Ames [Research Center in Silicon Valley] and they were [Stanford University] PhD candidates.

Mike Moritz, who in addition to his early role in financing the launch of Yahoo was an early investor in Google, reads from the same script.

Best as I can remember, at the helm of America’s largest 50 media companies in the mid-’90s, there were no programmers, there were no software engineers anywhere near the top of the company. You could probably have let 100,000 of yesterday’s media employees through the door without spotting one software engineer.

Sir Martin Sorrell, founder and CEO of ad giant WPP, described his hesitancy to invest in the skills necessary to compete in a digital age:

You asked could we have done anything, could news organizations have done anything about the digital revolution? The fact is can you ride the waves — you think you can roll back the sea and you can’t.

If you said to me, “What do you regret about WPP over, say, the last 13 years?” It’s that we haven’t done more faster-growth markets and we haven’t done more digital. Because [with] the benefit of 20/20 hindsight: If you had done those deals that you thought were marginal; if you had taken-on those people who you thought were not fundamental and not core, and were marginal, you would have invested in more human capital in the digital area and you would have invested in more companies.

Of course, the one company that did attempt to bridge this gap was Microsoft, which cast hungry eyes on the Internet media business not only with its MSNBC joint venture, but with the launching of Slate, the ambitious online magazine that the company also based in Seattle. The software giant hired as its founding editor Michael Kinsley, a highly respected print journalist as well as one of the first cable TV political personalities (from CNN’s Crossfire).

John Huey

It’s been suggested to us by a number of people that one of the big failings of the traditional legacy media business is it never had any real affinity for engineers.

Right.

John Huey

How did it feel to be a journalist in a land completely dominated by engineers? Did that work?

On the one hand, there was no tension about that. On the other hand, we didn’t take advantage of it the way we should have.

John Huey
Michael Kinsley describes applying to Steve Ballmer for a job at Microsoft creating an Internet magazine.

Is it fair to say, as a journalist, you probably didn’t have that much appreciation for the possibilities of engineering?

I found the engineers who worked for Slate very nice people, but just like writers, in fact, very like writers, they were spoiled rotten. You could never get what you wanted from them. They got very angry at me when I would say, “Why can’t we do X?” This was after I realized that we had to reinvent the form to some extent.

In the end, Microsoft exited the news business, first selling Slate to the Washington Post Co. in 2004, and, more recently, offloading its stake in MSNBC to NBC owner Comcast.

Arguably, one exception to the rule that mainstream media companies didn’t appreciate or empower engineers was at CNN, where they brought in not one but three technologists with academic computing roots from the University of Chicago — led by Scott Teissler, today the chief technology officer at Turner Broadcasting, along with Sam Gassel and Monty Mullig. According to both Motro and Woelfel, this helped contribute significantly to the early success of CNN Interactive.

Furthermore, Negroponte argues that the notion of needing to merge engineers with “creatives” was the founding principle of the Media Lab at MIT.

The people who formed the original Media Lab did so in a frictionless fashion, and the statement, the mission statement if you want to call it that, was that the inventors and the creative users of media should be in one place.

The example where that didn’t happen was in television. Engineers invented it then threw it over the fence, and people used it. The example of where that did happen is photography. If you think of the history of photography, the people who invented it were the creative users, and when you wanted to do something else, you invented more. My argument — had you been in the room and I was trying to persuade you in 1985 — was that the computers would be the same thing; that the future of computers would be driven by the creative users, not the computer scientists. That was the basis for the Media Lab.

Some of today’s newspaper executives seem finally to recognize the necessity for adopting the collaboration that Negroponte was promoting almost 30 years ago.

We have to present the best that we have to offer in a way, in a format, that readers like to use. The only way to do it is having people like Shailesh Prakash, who is the most valuable player at The Washington Post. Shailesh is the [vice president] of technology at The Post, and I would say is a peer of [executive editor] Marty Baron. He and Baron will create The Post digital content in the future jointly.

Chapter 6: The Return of Newspapers

The Wall Street Journal’s Gordon Crovitz discusses the newspaper’s redesign in 2006. (Ramin Talaie/Bloomberg via Getty)
While all these new entrants had entered the online information era, the newspapers weren’t sleeping through it. By the early ’90s, the broadsheet publishers had quit licking their wounds over the painful teletext and videotex experiments of a decade before, and had established a presence on the proprietary online services. Knight Ridder, Tribune, and The New York Times were all providing content on AOL. The Washington Post and Minneapolis Star Tribune established outposts on AT&T Interchange. The Wall Street Journal created its own proprietary service called “Personal Journal” using Microsoft technology. The newspapers were giving electronic publishing another go, but this time they had let the online services in the middle, between the newspapers and their readers.
Then, the web hit. When Hypertext Markup Language (HTML) arrived, it was nothing short of a revelation to publishers, and it quickly became the method by which most webpages were created. Gordon Crovitz, later the publisher of The Wall Street Journal, remembers the first time he saw a webpage written in HTML:

I was back in New York and Neil Budde, who was later the founding editor of The Wall Street Journal’s website, showed a group of us this unbelievable product, which was the first iteration of The Wall Street Journal’s website built on HTML.

He explained how he had done it, and he explained this HTML. It was the most amazing thing I’d ever heard. We saw the demo, and I asked him at the end of the meeting, I said, “That was fantastic but how many months is it going to take to produce that?”

Gordon Crovitz on tracking the revenue streams at The Wall Street Journal and the value of charging for subscriptions to the paper’s online edition.

He replied, “Time to produce it?”…He looked at me and said, “I don’t think you understand. It’s live now.”

The contrast between electronic publishing in the old days, the pre-Internet days, and the Internet couldn’t have been more stark to me.

That contrast wasn’t just in the magic of the creation tools and the previously unthought-of speed-to-market; it was also transformational to the business model. Suddenly, the web made it possible for publishers to easily bypass the proprietary services; to own their customers; and to avoid any notion that an intermediary could determine whether, and what, would be published. This was the biggest, freest printing press the world had ever seen. Honestly, not since Gutenberg. Of course, as it turned out, that knife cut both ways.

For a lot of people, you were interested in the First Amendment idea, that right to publish. In the early days of the Internet, people felt, “We have a distributed system. That means something which is not controlled by government or anybody else.”

That was driving a lot of people. That drove a lot of the excitement. Certainly, the early geeks were excited to be able to work together without asking anybody’s permission. Some of the initial publishers who realized, “Oh my goodness, I can start a newspaper just like that.”

One of the newspaper executives who sensed that power early on was Alan Spoon, who was president of the Washington Post Company. Spoon was a “geek” from MIT with a law degree from Harvard, and he was familiar with the Internet well before Berners-Lee invented the World Wide Web.

Don Graham and I were making a sales call in Chicago to a major client. We were going to the airport in Chicago. I was talking about the web and how it was coming on. Don and I always put our heads together in these things. We decided, “You know what? We’ve got to get to the web.”

Alan Spoon describes the news industry as tumbling down the stairs and trying to eventually land safely.

So, forced march. Cellphone call from the back of the cab: “Changing strategy. We need to move off of the proprietary system.” Because as I always put it, “We are winning the county track meet but the Olympics lay ahead.” We have to have a hell of a lot more subscriptions than that [referring to their 30,000 AT&T Interchange users]. We shifted the model from pay to advertiser-supported.

By now, of course, a number of free news services already existed on the web. Yahoo News and CNN.com were giving it away to one and all. And Knight Ridder had changed its strategy from a paid service on AOL to a free one on the web:

I don’t think that was a bad decision because we had to build up a big enough audience so we had something to sell [to advertisers], and I don’t know if we would have built up that audience absent that.

Meanwhile, at The Wall Street Journal, the plan was to launch a pay site:

There was never really much of a debate. The debate was really, “How much do we charge?” It was never, “Is this going to be free?” I think one reason for that is that unlike most newspaper companies, Dow Jones, since its very beginning, since even before The Wall Street Journal, was selling news electronically to subscribers. The whole revenue base was subscriptions for what’s now the Dow Jones Newswire and other services.

The front page of NYTimes.com in late 1996.
In early 1996, The New York Times came onto the web with nytimes.com. It was a free service for users in the United States (paid elsewhere and this ended in July 1997), but with mandatory user registration for the purpose of developing a segmented advertising model. Martin Nisenholtz, who made the recommendation to offer the site free of charge, spoke to Times publisher Arthur Sulzberger, Jr. about the decision:

We made a recommendation that was somewhat controversial at the time, although we made it in the context of other folks having made the same decision, to offer [The Times] website for free. Many people have said that this was a good decision. Many people have said this was a terrible decision.

There are people, in fact, who we’ve interviewed, that are on both sides of that. I just wanted to get your thoughts in retrospect. Do you think it was the right decision to offer The Times on the web for free at that time?

The answer is, absolutely, I do. I do for a couple of different reasons: The first is, we didn’t know what the business model was going to be. It was so early in that system; to see what kind of audience we could build; what kind of tools we needed; at a time when this was a highly profitable newspaper company….

Two, I think by offering it free, we found it easier to engage our journalists in building the digital muscles that we needed to make this really work because, as you recall, the newsroom embraced it in theory but not really in their heart.

Arthur Sulzberger, Jr. describes the profile of a subscriber to The New York Times and how they might build online products that are interesting to a younger audience.

Newsrooms, as you know, are mission-driven organizations. They saw this in the early stage as getting in the way of the mission. The mission was getting the best quality information into the hands, literally, of people who were holding paper. But once they started to see what kind of reach they could get, once they started to get feedback from people living outside of the United States who had read their stories on this thing called the web, they started to say, “Wait, this is core to the mission.”

I think it would have been a harder sale had there been an element of charging for it, in making that transition.

By 1996, virtually every mainstream news organization, from national to local, broadcast, cable, and print, had some kind of news presence on the web. Most were free, and in most cases, the website “brands” reflected the idea that the web was seen primarily as a way to “repurpose” existing editorial (and wire) content. This was certainly true at the dominant papers — The Times, The Journal, USA Today and The Washington Post — all of whom created brand extensions on the web. Some local organizations, however, went another way. A team at The Boston Globe created a local portal called Boston.com. The Newhouse newspaper organization, as noted above, created NJ.com and hired Jeff Jarvis to run it.

There was much debate about that — I think there still is today — about the brand question, everywhere. But the belief was this is something entirely new. It was going to combine multiple newspapers in some of the Newhouse markets. In Michigan we had eight papers; in Alabama, we had three papers. So you could have a statewide service.

In fact, it started as “New Jersey Online” at NJ.com. One lesson we learned was that your brand and URL had to be the same. It was rebranded again to, simply, NJ.com. They’ve stuck with that.

Jeff Jarvis on why the “digital natives” in online news beat the traditional media companies.

While the newspapers wrestled with issues of branding and business model, “native” web journalism organizations bloomed across the Internet. Two recent college graduates, Steven Johnson and Stefanie Syman, created FeedMag, one of the first and best online “zines.” Joey Anuff and Carl Steadman created Suck.com. Their tagline: “A fish, a barrel, and a smoking gun.” In 1994, Cool Site of the Day was launched by Glenn Davis to celebrate this great flowering of Internet content, broadcast to an emerging generation of online enthusiasts. Suddenly, everyone was a publisher.

Early on there were some things which I think people noticed. There were some firsts from my point of view. When I followed a link at Franz Herzl’s Vatican, he had an online hypertext exhibit of Vatican Renaissance artwork that had been scanned by the Library of Congress.

He found the stuff on the FTP [file transfer protocol] server and had made webpages out of it. I went through his museum and clicked on a little thumbnail and I found this beautiful — I’ve got it on my computer still — beautiful illuminated manuscript. It had a nice color screen. That was just great because this was showing how you could really see great art on it.

Then Steve Putz was the first person to make a map server. You could click and you would move to a slightly different part of the world, and it would draw you a map every time. I think it was done with the U.S. census data, the TIGER data. That was another trigger.

The moment Steve puts up that very crude map server, everybody realized, “Oh my goodness! Every webpage is just a virtual idea. I have to write a program, which will draw, or paint the right version of that idea when somebody clicks on the link, and I can make links to other ones.” So they realize with just a few lines of code, Steve had produced this world of maps of the U.S. at any scale.

Around that time, others were thinking about how this might apply to a variety of emerging online publishing and advertising opportunities. One was Jeff Taylor, whose 1994 startup, the Monster Board, would become the largest job search site for many years, severely disrupting newspaper help wanted advertising, one of the industry’s largest and most profitable advertising categories. Another was a young journalist and entrepreneur named Larry Kramer, who was thinking about how to craft a new business model for online business information:

Now, it’s ’94, ’95, and I’m going, “Something big is happening.” A lot of people are starting to trade stocks at home and are getting very disillusioned with brokers. I’m thinking everybody’s getting these IPOs. Netscape happened, a few things started to happen, and I can do that. My broker isn’t getting me anything. The brokerages started coming online with discount brokerages. Schwab and E*TRADE and things were all popping up.

Larry Kramer recalls the first online news alerts created at MarketWatch in 1997.

A whole new community of people was coming up who wanted financial data at home and were trading stocks. It looked to me like the Internet could replicate a Bloomberg terminal pretty closely. Not everything, obviously, or a Reuters terminal at a home, [but] for much less money if you have real time. There’s no way of getting around the fact that the exchanges would charge you for real-time data. You’d have whatever that charge, but it was in hundreds, low hundreds, not thousands.

The rest of it was on this thing, the Internet. If I could build a news service that could even approach some of what they wanted…. My strategy was, most of these home traders were trading a basket of stocks — the Internet stocks at the time, which were starting to get very volatile.

If I started a news organization that covered the most-traded stocks by volume, I would be attracting a large audience.

Kramer wanted to align with a major media partner to get the credibility of their brand and promotion. One of the companies he approached was CBS. His initial contact was a young business development manager named Derrick Ricefield.

Derrick saw it right away. He went back and talked to [CBS News president] Andrew Heyward, and my next meeting was with Andrew Heyward. I flew to New York, and I knew this could go either way. Andrew and I are contemporaries. We didn’t know each other, but we had a lot of mutual friends. He had been a Harvard undergraduate when I was at the [Harvard] Business School.

We had a lot of things in common. He knew that I’d been at The Washington Post. At that point, I was a respected editor in his mind. I said, “I don’t know how you’re going to react to this,” because in my days at The Washington Post if somebody came in and said, “We’ll cover financial news for you,” the window wouldn’t have been big enough to throw them out of. It’s like, who do you think you are?

He took the exact opposite approach. He said, “No. We really need help covering business.” He was totally open to the discussion.

CBS MarketWatch was born and quickly became one of the largest business news sites on the web. It competed with other early attempts at financial news, including Jim Cramer’s TheStreet.com, and Quote.com, an early news aggregator. Brothers David and Tom Gardner launched the Motley Fool on AOL in 1994. TheStreet.com created a paywall, like The Wall Street Journal. MarketWatch remained free.

Now, you’ve decided that it’s free, right?

Free and ad supported. I had already started to build an ad team at that point. I was trying to hire Scot McLernon, who was the ad director of Quote.com. He kept saying, “No. I think Quote.com is too good a brand.” I said, “I think I can solve that problem for you.” I couldn’t tell him how, so he was very skeptical. Then the day we announced it, I sent him a note with just an eye [the CBS logo] on it, and he joined shortly thereafter. We were off to the races.

If WSJ.com had decided to go free like The Times did, would you have had any hope of making this work?

Much less. I don’t know. I really don’t know if I could have made it. I thank my lucky stars for the fact that the three big news organizations were all tied up on very expensive terminals….

In 2005, Dow Jones would pay $519 million to acquire MarketWatch and its huge audience.

One of the reasons I approached Larry to ask him — when CBS MarketWatch was an independent company — to ask him what the future of CBS MarketWatch might be, and would he be interested in being purchased by Dow Jones? One of the reasons for that discussion was, and this is going to be very hard to believe now, but at this time…The Wall Street Journal’s website was sold out in terms of online advertising at very high [rates].

Chapter 5: Then Came Cable

Ted Turner speaks at a CNN banquet in 1995 (AP/John Bazemore)
Even before Yahoo unleashed the floodgates of free news, in Atlanta, at Ted Turner’s CNN, people on both the business side and the journalistic side were intrigued with the idea of taking their news brands online. The cable channel had launched its revolutionary 24-hour news concept in 1980, and then slowly developed it for a decade before hitting it big in 1990 when its ubiquitous coverage of Operation Desert Storm suddenly assured the future of the all-news network. Using their newfound clout, Turner’s business development people had begun spreading the news by launching such ancillary brands as the Checkout Channel and the Airport Channel, which repurposed CNN’s video content and aimed it at captive audiences. The path to online news, though, was less clear because video wasn’t a practical option in either the proprietary online services period or, for that matter, long into the dial-up web era, dominated by the early portals. Even so, former CNN journalist Scott Woelfel recalls his first flirtation with digital news at the beginning of 1991.

Someone came to visit CNN from Apple. QuickTime had just come out, and they were looking to do a news magazine on CD-ROM to challenge Time and Newsweek and approached us about it. I got into this totally by chance, literally walking down the hall, when someone asked me, “What can you do for this guy?”

Scott Woelfel on why CNN.com included only short clips and not the cable network’s live programming.

This was my, and really CNN’s, first exposure to digital technology when it comes to interpreting news in some way. We put together a prototype of a disk…. It turned out great. It took maybe two months to do it with some resources that Apple gave us.

We [took the prototype] to management at CNN, and they looked at it and said, “This is interesting, but it’s really not our business. Thanks for the disk. Go back to your day job,” which…was executive producer for the prime-time newscast. Again, this is spring of 1991, and at this point it really got me interested in what the digital technology could do to expand the audience at CNN.

So Woelfel began collaborating with a few other people at CNN, including Harry Motro, a former Coopers & Lybrand auditor who was then working in business development, to see where it might lead.

Our first deal was with CompuServe. They were aggressive. They were much bigger than AOL to start with. I think we initially spoke to CompuServe and Prodigy. We didn’t get to AOL ’til later, although I do remember meeting with Steve Case in a little conference room…. Maybe it was in ’93. Steve was telling us how this [AOL] was going to be much more creative, much more colorful, much more interesting.

Paul Sagan

It was dial-up, so you were repurposing or creating text or stills, with no video. It was still not a TV experience like CNN was, correct?

It was really tough for us because we didn’t have content. It forced us to do some work, but on the other hand we had the right brand because the CNN brand meant instant news.

Harry Motro describes why news content is ideal for online and CNN’s early efforts to get video news onto PCs.

We had the right mentality of going after a new opportunity, I think. The bad news is that all the text that sat inside of CNN was scripts. It was people writing stuff for someone to read over, which didn’t fit if you didn’t have a video. What we had to do was figure out how to get rights to Reuters and AP. This is where Burt Reinhardt (a longtime CNN top executive) single-handedly enabled the creation of CNN Interactive.

I think he used to work at Reuters. He knew them forever. He was a trusted figure in the industry. CNN negotiated massive deals with Reuters for content. Otherwise, we [would’ve been] paying them a lot of money.

[But to get back to the dial-up services…] Early in CompuServe, the value that they wanted from us was on-air promotion because they were trying to advertise on the cheap. We wanted to really experiment with the integration of television and online. We had people creating news, basically rewriting Reuters and [later] AP…. But we also had a staff of people who were monitoring the [online] forums. That was actually the more interesting part because you could see usage spikes around shows.

There was a show that was done in the center of the CNN Center in the floor in the [shopping] mall [there]. It was a live show in the afternoon. It was sort of our feature integration show. It was actually a great learning experience. It was probably one of the most heavily integrated early shows that was done, especially around news.

[To Scott Woelfel:] Talk about the process of getting a new media division started. This was a cable television network company taking a step into a new space. Can you talk about how easy or hard it was to get funded and [how was it structured? In the newsroom, or separately?]

It was surprisingly easy, I think, because what we were doing was so unknown to the television industry. It wasn’t seen as a threat to anything else. We put together the plan — Harry Motro was actually the one who did it — but we eventually got referred to Ted, who is still not that digital today. He understood there was some potential there, referred him to John Petrovich, who was running Headline News at the time, and basically we were funded and actually operated under him at the beginning of CNN Interactive. Harry really handled the funding part. My job was to put together the team and make a product out of it.

“It was surprisingly easy, I think, because what we were doing was so unknown to the television industry. It wasn’t seen as a threat to anything else.”
To work with the wire copy, Woelfel began hiring an early staff of writers and editors with wire service backgrounds, as well as a few newspaper reporters and editors.

Paul Sagan

That was a pretty controversial time because the newspapers were trying to keep AP from doing it, but Reuters did it with Yahoo and kind of set wire stories free into the “Great Free Internet” at the same time. Do you remember that and how that related to what you were doing and what you thought the competition was doing?

Very much. It was an ongoing “frenemy” struggle with both Reuters and AP, but more with AP, over my entire tenure at CNN.com. They clearly wanted to be the fuel that powered this revolution in news, but, as you say, they were beholden to their members and were never really comfortable with the degree of how much was being used…especially as we grew so quickly and generated revenue so quickly.

I want to go back to the rationale for your developing this. The newspaper folks — Tony Ridder, others — really were focused on classified advertising and the disruptive potential of this technology….There was no existential threat at CNN. It neither threatened the television advertising business nor, at that time, the cable MSO subsidy. As I recall, Ted Turner didn’t even like it. Why did you even do this?

I’m not going to take that much credit for it. It was actually the Turner entrepreneurial culture. That’s what I really think it was, that “Hey, here’s a new business. Let’s go explore it.” It was not heavily funded. It was really self-funded through CompuServe. We got a million from LexisNexis. We got a million from CompuServe.

Right. They paid you. That’s the key. They paid you for the content.

We had started our offices under a stairwell. It was the most unattractive space in the entire CNN Center. The windows were papered off because you weren’t supposed to look in. Wires in the ceiling. It was a little hellhole.

We started there, but as we gained momentum we finally moved to a marquee spot because they were starting to show it off, because it started to be cool. That was the first time I got Ted to come down and look at our webpage.

I was nervous. What’s Ted going to think about it?…This was on a T1 [line] in CNN center. For some reason it was slower than usual and it was a slow load, and after about two seconds Ted was, like, just didn’t get it. Big thumbs down. And walked away. I’m thinking, “My God, good thing he didn’t see it on dial-up the way most people did.”

I have to give Ted’s brilliance full credit. Even though he didn’t get it, his entrepreneurial gut said, go, do it, [he] supported it, was interested in it.

The other thing I think: Ted had a fascination with what was going on in [Silicon] Valley. He closely followed the net worth of [Bill] Gates and Larry Ellison. That got his attention.

The front page of CNN.com in August 2000.
Whatever the rationale behind its founding, CNN.com very quickly became part of the “it” crowd in digital news.

I can’t remember if it was [CNN technologist] Scott [Teissler] or Sam [Gassel] who showed me for the first time what a hyperlink was. I said, “That’s really cool.” I was in my young 30s. I still hadn’t really made my career, so I said, “This is great. Let’s go do this.” We were doing the content anyway, and getting paid for it by CompuServe and LexisNexis, so let’s get some incremental revenue here.

Early on, we said we wanted to take that essence of what we think CNN is to the web, and that is breaking news and coverage of live events and things like that…We thought breaking news would be our bread and butter. We found almost immediately that was the case.

We had a very sharp uptake, and if you looked at our traffic patterns, what you would see is a stair [step]…pattern where we would gain audience around a news event, and we would lose very little of it. Then the next news event, we would gain more audience, and we’d lose very little. That stair step continued for I would say at least the first two years to be very significant, without a lot of drop-off, which was in great contrast to what you would see on CNN television, which would get those huge spikes of ratings, but then it would drop back down to a baseline that grew very little.

Who did you think the competition was every morning? Was it Yahoo News, or other sites? Was it simply [an] early…green field [opportunity] and therefore [you] just keep building an audience and don’t look backward?

There was competition that arose every time. Like the portals, and obviously the news organizations, very few of which were 24 hours a day. We really did give that sense of being there. We were able to grow on that, and establish that reputation early. Clearly then we did get a lot of competitors over time, but I think we were able to stake out a pretty interesting space early on.

John Huey

[To Scott Woelfel:] Scott, do I remember this correctly? Wasn’t there a period in there where Microsoft tried to do a deal with CNN.com instead of NBC?

Yeah, before we started CNN.com — so it was in 1994 — and Harry Motro and myself and John Petrovich, might have been just us three. There might have been one more, I don’t remember. We went to Redmond and met with the people there…. Harry took the deal back, and Ted looked at it, and turned it down. For a good reason, I’m sure. Harry can share. I wasn’t privy to that meeting. That was their first choice before they went to NBC.

They tried to do a CNN-Microsoft deal before the MSNBC deal. Nathan Myhrvold (a senior Microsoft executive) came. We all sat in a big conference room. A lot of meetings. They wanted half of CNN in perpetuity digitally. A lot of people talked about it, and they were going to throw a lot of money at it to create it, and Ted said no. At the end of the day, he was not going to give away half of CNN for any amount of money. He knew the intrinsic value of the CNN brand and so he said no.

Meanwhile at NBC, CEO Bob Wright was well schooled in both cable and Turner Broadcasting from his stint living in Atlanta trying to close an eventually aborted acquisition of Cox Cable by NBC owner GE. Perhaps hearing Ted Turner’s footsteps just a bit, he had gotten far out in front of the other broadcast networks with aggressive investments in cable channels. And now NBC was eager to leverage its combined news and cable assets by striking a deal with Microsoft for a dot-com news play. Tom Rogers, an attorney by training, was head of NBC Cable at the time.

We put together an approach to Microsoft. I remember that Andy Lack, then president of NBC News, and myself sat down with Bill Gates, and basically pitched him on the assets and strengths of NBC and how a partnership between Microsoft and NBC might be put together. Obviously, we were successful in getting him to think that we were a better way to go than CNN.

Why did you want to work with Microsoft?

Tom Rogers explains why cable TV networks moved online with confidence that successful business models would ultimately emerge on the web.

There were two things that drove that. One was, it was clear that we needed to have a broader catalyst for driving into new media…. We looked at Microsoft as a partner with a substantial amount of Internet traffic, a substantial amount of financial resource, and a substantial ambition to move forward in media in some way. Two, we were very much looking to take a cable channel asset we had, which had been started as America’s Talking,…. It certainly gave us a vehicle around which we could have a discussion about creating a more full-fledged news channel. We had created CNBC and a business news channel, but had not had a general news [cable] platform. We knew that Microsoft was interested in that very platform because of the discussions they had had with CNN. We put this forward as a way they could have it and own 50 percent of it, and we would bring the full resources of NBC News to it. We were also looking for a partner that could help us fund and develop a broad news channel.

The third piece of this was that we were very interested in how traditional news and Internet news could [be] fused into a single franchise where the two could [be] strengthened by some joint undertaking. The brand would stand for both forms of news. A viewer or user would be able to benefit by going back and forth and understanding how the two pieces fit together. That was the most revolutionary part. That was the part that…was the rockiest. But that was the formative thinking around it.

To help execute the joint venture, NBC enlisted journalist Merrill Brown, first as a consultant, and then in 1996, as the man to move from the East Coast to Seattle and run MSNBC.com.

So, talk about the founding of MSNBC.com in Seattle. It’s one of the more interesting ventures because it combines a significant journalistic institution, NBC News, with a huge technology company.

There were technology challenges around that. There were cultural challenges around that. There were journalistic challenges around that. It was a very intense period of time. Doing anything in real-time news on the web in that period was challenging. The mere act of publishing was tricky.

Paul Sagan

And you mean that from a technical point of view.

From a technical point of view, the content management systems were in their infancy. For NBC, trying to deliver real-time news on this very, very fragile platform caused a lot of friction because they didn’t understand that when a plane went down, or something happened, the turnaround time on that wasn’t the same as breaking into a cable network or a broadcast network. At the time it involved a variety of steps that we today take for granted in the content management world, but then it was rocky.

Paul Sagan

Talk about where the content is coming from.

Merrill Brown says he doesn’t believe that anyone has so far properly tried to build a successful online news business for local, urban markets.

Multiple ways. First of all, we had probably at the time 30 people in New York, under Lynn Povich, who was a key hire, who was charged with integrating NBC News. We had people in D.C. The principle function of those people in New York and D.C. was to attempt to extract words from television people, which was no small challenge, in part because they didn’t have desktop computers. They had only television news computing systems [closed systems].

Microsoft could not understand it. There actually was an information company that didn’t operate on some Windows system from which we could actually get words. There was actually enormous resentment about the fact that they weren’t all racing toward Windows.

We had to literally go and sit down with them, interview Andrea Mitchell and Pete Williams and other NBC correspondents. Take down their stuff, sometimes transcribed on the phone, sometimes on notepads or laptops, and literally pull content from them so we could rationalize the expenditure of effort and money on NBC in the short run, where they had very, very few natural assets.

The only people that I remember who were doing a great job of really being on top of breaking news were the folks at Yahoo News [who had] access to the Reuters wire. And CNN.com, who somehow mastered this, despite the fact that they had a television operation.

[CNN] was a television operation that had 20 years, or 15 years, whatever it was, of breaking news experience. They knew how to go after [and] cover [a] story in real time, which NBC didn’t know how to do. NBC didn’t have any years of doing that.

The only solution to the problem was to build significant, original journalistic capability, largely in Seattle, where people could produce stories, cover stories, do reporting. I sent them on the road. I sent people to the war in Bosnia. I sent people to the Middle East. In some cases, to facilitate NBC News producing content for the web, but in some cases just to get stuff.

John Huey

But what that really means, “to facilitate NBC” is to make sure you got something out of there because they weren’t giving it to you.

Precisely.

Paul Sagan

Was there a business model besides the fact that there were two rich parents at the time?

Nothing but weak efforts at ad dollars, which Microsoft was terrible at for years — really, really terrible at it. We had lots of conflict about the fact that we couldn’t get their attention, in part because our inventory was worth 50 cents on a dollar to them, and Expedia’s was worth a dollar on a dollar [because of the ownership structure].

Paul Sagan

Were there specific stories that changed the perception of the parents or made the JV [joint venture] stand on its own?

Among the really important things we did was aggressively and quickly integrate with [NBC News programs] Dateline, Today, and Nightly News. We did this incredible thing of getting our URL on their screen. In ’96 and ’97 the act of creating [an on-screen graphic] that had an Internet address on it and actually might have a reason to send people to the Internet, was revolutionary in many ways. In prime-time television, we were the first people to do that.

Paul Sagan

So, effectively, your promotion, or at least your impressions, were far greater than what CNN could drive to their own site?

We had two brand and audience strategic advantages that nobody had: A broadcast network that was willing to integrate with us, and a [web] portal that was fully integrated with us. Big, important advantages.

[To Tom Rogers:] Let’s talk about the business model for just a moment. Did you ever think about at the time the idea that it might be a good idea to charge for the service given that there were no cable subsidies? In other words, you were committing to a one revenue stream business. As a cable guy, you must have thought: “I don’t like this as much as cable,” to be blunt.

It was clear by the mid-’90s that [the model of charging cable systems for retransmission of programming] was a really powerful business model. It’s only become more so.

Our view was that it was going to take a much longer period of time for the business model around Internet news to develop. Microsoft had a much more aggressive vision of how quickly that would come about.

No, we didn’t really consider charging a subscription fee…. Our view of the deal was that it was clearly driven off of our optimistic view of cable, and a very long-term view of what it would take for the Internet. Microsoft had a very bullish, near-term view of the Internet. They were not as enraptured by what the cable economics might look like. Those disappointed expectations had something to do with the souring of the relationship with MSNBC. Ultimately, years later, that partnership dissolved.

For all the fits and starts of these early online news efforts at CNN, Yahoo, MSNBC, and AOL, these four sites were destined to enjoy huge success in the traffic-chasing, banner ad — selling days that dominated the second half of the ’90s and on into the early 21st century. Even today, all of them remain — along with Google News, The New York Times, and the upstart Huffington Post — at or near the top of audience usage rankings for U.S.-based news sites.

Chapter 4: The Original Sin

Options on Yahoo stock start trading at the Chicago Board Options Exchange, 1997. (AP/Charles Bennett)
Around this same time, Mike Moritz, a former Time magazine reporter who had become a venture investor at Sequoia Capital, encountered two Stanford students, Jerry Yang and David Filo, and made his first Internet software investment in their fledgling company: Yahoo. This was a new media company that would give its content away for free and make money on advertising, like the sites built by many of the mainstream media companies, but this one had its roots in Silicon Valley.

When we encountered Yahoo, the only real differentiated insight that we may have had at Sequoia was that we believed in the notion that if a substantial audience is built for a site on the Internet, then with time, it should be possible to attract advertisers.

People in the investment world, in the venture world and elsewhere, got all tangled up in the conundrum of whether or not it was possible to have a business that on the surface gave itself away for free to consumers. Our assumption all along was that Internet sites were no freer for consumers than network television or broadcast radio, which, in retrospect, seems straightforward, very evident, [and] extremely apparent. But for whatever reason, it perplexed a lot of people. Don’t forget, there was no history in Silicon Valley — perhaps outside of AOL, which was not really considered a Silicon Valley company because its center of gravity was in the East….

Mike Moritz on the failure of most traditional media companies to appreciate that they should have shrunk to thrive in the online world.

One of the things that comes up as a theme in our interviews is [this notion of Original Sin] that Yahoo managed to get access to Reuters and the AP pretty early. They packaged content that had been coming to the consumer indirectly through broadcast and print channels and brought it directly to the user in a very updated way and created, in a sense, a superior free service to the legacy services that thought they should be paid for their content. Yahoo News, in a sense, set the stage. It became very large very quickly because of the size of the portal. It set the stage for the rest of journalism to go free. Do you disagree with that?

Best as I recall, at the beginning there wasn’t a purposeful desire to get into the news business. I think it was very much the result of the fact that Reuters at that point had a corporate venture that was quite active, run by a thoughtful person. They had identified Yahoo, and I think also [the portal site] Excite, and had made small investments in both. We had said to them, “As a result of the investment, there’s got to be something more than money. We need some sort of relationship. Can we package and distribute the news and information that you provide on the Reuters wire?”

That was what led to the beginning of the news business. The news business, in and of itself on the Internet, has not been a great business. It’s been a very useful service for consumers, but there are many other ways far more profitable for companies like Yahoo and Google and others to build large sales volumes than trying to sell advertisements around news and information.

I think to some extent it was a little accidental that we got into the news business. When Jerry and David were first talking about the site, news — certainly current news — was never on the road map. It came about like so many things on the Internet, accidentally and opportunistically.

One of the earliest investors and board members at Yahoo was Art Kern, a former broadcast executive who had sold his radio stations and was looking for something new in Silicon Valley.

Mike [Moritz​] called me up and said, “I’d like you to meet these guys.” I said, “What’s the business?” He said, “I can’t really tell you that much, other than it’s a directory for this new thing, the web. You’ll just have to come down and see these guys.” So I drove to the Valley and met Tim Koogle [CEO], Jerry Yang and David Filo. And Jeff Mallett [an early employee and the president and chief operating officer], actually. I came away from that meeting feeling like, “This is very different in every respect.”

Reuters offices in Times Square. (AP/Mark Lennihan)
But while the roots of Yahoo may have been far from the media establishment on the East Coast, it developed important connections back there that would prove critical to its success in building an audience. David Graves was an executive at Reuters in New York. Reuters, based in England, was a wire service whose main competitors were financial news companies like Dow Jones and Bloomberg. It had relatively few clients among U.S. newspapers, many of whom were members of the Associated Press.

Graves, along with two other executives, John Taysom and Andrew Nibley, first spearheaded an investment in Yahoo by Reuters in the early 1990s. After that, Reuters started putting its news on Yahoo, and did it in part for an entirely novel reason — to help protect its investment in the fledgling technology company even as Reuters hoped to build significant new licensing revenue streams. Later, Graves would move to the Bay Area to become head of media at Yahoo.

We had just reached agreement to put a couple of million dollars into a little company called Yahoo, pre-IPO. As a concession for us doing this really risky investment, they agreed that Reuters would have exclusive rights to provide content to Yahoo for five years, in terms of what content we had. If Yahoo wanted a news product or a financial news product, they had to come first to Reuters and say, “Do you have this?” Then if we didn’t, they could go buy it from someone else.

Of course, every time they came and asked for something, if we didn’t have it, we figured out how to make it. “Oh yeah, we have that.” We created things that we didn’t have before. U.S. sports and a lot of other things like that….

David Graves believes few ever made money on news, even in the pre-digital world.

So we sold these online reports, which were 10 stories that updated themselves. It was a kludgy, black-tape system. But it worked. We had our normal wire stories, and then an online editor would pick 10 of them and put them in order. Then we would send out a file with the code numbers of those 10 stories, called a link file. So if we put in a new lead story — a big important story — it instantly, within seconds, became the lead story on Yahoo….

There were only two news employees at Yahoo: One was a producer, and one was a feed handler, a technician guy.

There was never any question of charging users for content because Yahoo wanted to increase its audience as quickly as possible.

We were very successful in terms of page views, but not money. Because the Yahoo deal was a rev[enue] share. What I later learned, when I went to Yahoo…is that you do rev shares until there’s actually rev, and then you change it to a license….

John Huey

Explain the business rationale for Reuters doing this on a rev share?

Caroline Little explains why she thinks the changes in the major news industry were mostly inevitable.

The strategy was that Yahoo didn’t have any money. We did own part of it. We wanted to see more value. But it was really more, Yahoo did all their deals that way for content.

Paul Sagan

So clearly the consumer was voting to say, “I like the most updated news” from the outset. You were a part of that. I’m just wondering. The consumer says, “I like this product.” But Yahoo is saying, “Great, we’re going to make it for free.” I assume to get advertising?

Let’s take it in stages. For the first part of the Internet, your stock valuation was driven by your audience size because nobody was making any rational decisions about what things were worth. So for some number of years all you cared about was how many millions of people were clicking on Yahoo in a given month.

Art Kern suggests that the debate over whether Yahoo was a technology company or a media company ultimately slowed its development.

Fifty thousand a day kept getting added. So Yahoo wasn’t going to do anything that was going to interfere with the metric that was driving their stock, which at that point was audience. Certainly any kind of pay situation would’ve interfered with that thing. At one point I proposed [when I was at Yahoo]…that we offer a version of Yahoo for a buck a month that had no banners. “Let them put their money where their mouth is.” Here’s what I was told: Yahoo’s audience was skewed toward heavy users. Ten percent of our users did 90 percent of our clicks at one point. The person who explained this to me said, “If any significant portion of them decides to opt for the one dollar, it will take so many page views out of our ad inventory….”

Remember, the company’s really a financial news company. Their biggest businesses were foreign currency trading. Media’s a small part of that…

And Reuters didn’t have any real U.S. revenue. Didn’t have any U.S. retail revenue. We had 20, 30 newspapers who were rich enough to have both wire services. We had NBC was our biggest partner. We sold all the TV companies at the time. CNN was a big customer, obviously…

We had nothing to lose, at that point. It was a chance for Reuters to expand. We did end up generating substantial revenues, globally, with the online news reports because our strategy for sales was called “Yahoo envy.” We would create a product, put it on Yahoo and immediately someone would call us from Excite saying, “How come we don’t have that?”

This is a hypothetical, but had you not taken the quick money from Yahoo and built Reuters.com in 1993 or 1994, could it have become Yahoo Finance? Or didn’t you have the culture inside Reuters to do that?

There were those who wanted to do that. In fact, I was more in that camp because I came from the retail world. I was from broadcasting. I was consumer facing. But remember, Reuters was a wholesale operation in the media business….They’d always sold their pictures to newspapers and magazines. They’d sold their wire services to newspapers. Their television was uplinks and reports. We sent raw footage that NBC and others edited into pieces with their own reporters in front of it. So they were most comfortable with the wholesale approach, even to new media.

Paul Sagan

It was The Reverse [Innovator’s Dilemma]. It’s what freed you, I think, at Reuters to do these deals no one else would because you never saw yourself as a retailer.

Right. We didn’t see us as competing against ourselves.

Reuters did well with its Internet investment precisely because it was not competing for American consumers in its main business. Because of that lack of conflict, the company was able to pursue free content online without threatening its protected revenue stream from its financial news. As we see shall see, CNN was in a similar position: Its main business was fueled by cable fees, which allowed the cable giant to find a new audience online without the threat of cannibalizing itself. Newspaper subscription revenues were disrupted by news organizations that had no stake in the consumer paying for news; on the contrary, the prevailing market incentives motivated companies like Yahoo to go free, to build the largest possible base of users.

Around this same time, Matt Drudge was developing another form of free news service with his Drudge Report, which would later become a model for other “branded” bloggers who wanted to aggregate content from a number of other news sources — think Arianna Huffington and Andrew Sullivan.

Drudge used the essential power of HTML to “link out” to the rest of the web. His effort began as a subscription email newsletter in 1996 and later became a popular website. Today, it is fashionable among news providers to talk about “curation” or the idea of editing the web. Matt Drudge was, arguably, the original curator.

Chapter 3: The Big Bang

Tim Berners-Lee, inventor of the World Wide Web, in 1995. (AP/Stephan Savoia)
While AOL was getting everyone comfortable online in the early ’90s, a computer scientist named Tim Berners-Lee had been working at CERN, near Geneva, Switzerland, since 1989 to develop a tool that would enable academics to collaborate through globally linked computers. His idea was to harness the infrastructure of the obscure scientific research and defense communications network that had evolved into the Internet. Berners-Lee would call his baby the “World Wide Web,” and its magic would be precisely the opposite of AOL’s; it too would be a garden, but it would be an infinite garden with no walls in sight.

It was universal. One of the things I had noticed about all the systems which had been designed for scientists, or for people working on the mainframe, or for people using PCs in administration or something, is that they made assumptions…which limited availability. It was clear that this thing had to be universal. Every computer had to be able to understand HTML. Every computer had to be able to talk HTTP. You had to be able to make a link to anything. The moment you had a list, or a class of things — these are the things which the web was designed for and these are not — then you end up with an oil/water boundary, and the web itself would cease to be functional. If you can’t link to anything, then what’s the point?

It was designed to work on any computer. It’s what I didn’t put into the design. I didn’t put any constraints that you had to use. You didn’t have to use Microsoft Word. You didn’t have to use a Mac. You didn’t have to use a…mainframe….

Tim Berners-Lee explains why he thinks it’s critical that we find new ways to pay journalists for their work online.

An important thing is accessibility. We should try to make the web as much for people who may be listening to it as opposed to reading it, and so on. Certainly it should work for any culture. It works in any language. There are all these different layers that had to be independent of so many different things.

Berners-Lee launched the first website in 1991, and the nascent web began to grow exponentially in scientific and academic circles. But it wasn’t until 1993, when Marc Andreessen, a 22-year-old computer science student at the University of Illinois in Urbana-Champaign, co-authored a web browser called Mosaic that the Internet became widely accessible and began to subsume both the popular imagination and mainstream commerce. Andreessen soon moved to Silicon Valley to co-found Netscape, which launched its phenomenally popular Navigator browser. Microsoft followed with its own Internet Explorer browser, and the browser wars were on. For the news business and many others, this was the Big Bang. At AOL, management quickly realized that even if the walls of the garden weren’t tumbling down right away, the users were coming to expect — and demand — a simple path to the greater web.

“People are always saying, ‘Well, these newspaper guys never saw this coming.’ I used to say, ‘We are not going to be a buggy whip company. We are not going to miss this wave.'”

The launch of Netscape changed everything. When Netscape launched, we knew, “Okay, this is giving software away for free. We know that model.” We were giving billions of dollars of software away for free. AOL was the most highly distributed piece of software in the history of the world because you would get those disks everywhere. We were putting in a browser, but now Netscape was out, and they were giving a really high-quality browsing experience away for free. That activated Microsoft, who immediately rushed into the market with IE, and then they came out with their online service, MSN.

Now, all of a sudden the industry was different. You had AOL. We were booming, and we had our taxonomy, software, and network. You had Netscape, which was about a thousand flowers blooming. And then you had Microsoft, which was building its online service and its content right into the operating system.

All of those were trying to recruit journalists, either to work for us or to partner with us. There was an unbelievable amount of confusion in the marketplace.

It became a real tough decision for partners, media companies, journalists. Whose side should they take? A lot of it became who would pay you the most money. Rights fees were created. I once had a $400 million budget to now write a check upfront. There was no longer revenue sharing. It was: “We’re going to write you a check, and you’ll be with us, and then we’ll charge.”

Now all of a sudden for AOL we had to change our model. We had to go from metered pricing to $19.95 all you can eat. I remember the world saying, “That’s it for AOL. You’re dead.” The exact opposite happened.

netscape-andreesen-ap

Netscape cofounders Jim Clark and Marc Andreessen pose outside of their offices, 1995. (AP)
Knight Ridder, the second-largest newspaper publisher in America in the ’90s and videotex pioneer in the ’80s, became one of the first mainstream publishers to take its product online as AOL took off. Tony Ridder, an heir to one of the founding families and an executive on the advertising side of the business, was president of the company, working for (the now deceased) Jim Batten, a journalist who had worked his way up on the Knight side of the business. Ridder made the decision to move headquarters from Miami, Florida, to San Jose, California, and launch, along with editor Bob Ingle, a venture called Mercury Center, one of the very first online newspapers. When they began, the web wasn’t yet available so they signed on with AOL to distribute their product online.

I think that we thought it would be the newspaper in live form. Not just putting up the newspaper, but it would be the newspaper in live form, and we would offer these other services that we would have, a retrievable service so that people could access past copies of the Mercury News, and that they could search for other kinds of information.

Tony Ridder on the conservative culture of newsrooms.

But then Netscape came along and we could go up on the Internet. We were the first customer of Netscape. It’s interesting when you look back on it now. People are always saying, “Well, these newspaper guys never saw this coming.” I used to say, “We are not going to be a buggy whip company. We are not going to miss this wave. There’s something here, and we’re going to be part of it. We’re not going to worry about making money for some period of time. We’re going to get on top of this thing.” But even though we spent all this money….

Of course, in 2009, four years before our interview with him, Tony Ridder had stood before a gathering of employees, reportedly with tears in his eyes, to announce the sale of his namesake company to McClatchy Co. for $4.5 billion, only a fraction of what Knight Ridder had been worth just a few years before, but considerably more than it would likely be worth today.

But we are getting ahead of our story. Around the same time that AOL and other services were opening up, at least a little, to the web, strategists in the news industry grew excited that the freedom to publish directly onto the web would lead to better business models. Kathy Yates was an executive at the Mercury News and later at Knight Ridder Digital, and she recalls the clear benefits presented by the web over the proprietary walled garden services.

I just didn’t see that there was much of a future in a limited, walled garden online approach. It was just too difficult. The penetration was too thin; there was nothing about it that said to me that it would ever be a successful enterprise. The staff knew I was fairly skeptical…. One day the chief marketing officer for Mercury Center called me into the boardroom and sat me down. He said, “I’ve got to show you something.” What he showed me was, it was a beta version of Mosaic. I just…I said, “Game over. That, I believe in.”

Kathy Yates explains her view that the successful transition of most newspapers to the digital world just wasn’t going to happen.

I think what really was so striking to me about the Internet was the removal of boundaries. The newspaper business, as I experienced it, was always full of boundaries. It was very limited in so many ways. The manufacturing process. The distribution process. The limitations on how you package the news and the advertising always seemed to be putting up constraints that we were bumping into, even though we were an extremely profitable business. I think at the time the Mercury News was number one in terms of classified lineage in the country. We were always vying back and forth with The Dallas Morning News, but I think at that point we were on top.

The Internet was just so gloriously, really free, of those constraints. That’s what convinced me: “OK, this is a game changer.” From that point on I really dedicated everything to it. I signed on to become one of the founders of Knight Ridder Digital…Tony was looking to see if the experiment could be extended throughout Knight Ridder as an entire company…. That’s really how I spent the remainder of my career with Knight Ridder.

In virtually every media company, early adopters emerged, and they jumped on the prospects of the Internet with enthusiasm. One was Steve Newhouse, part of the media conglomerate that carried his family’s name, and he helped to push the business to experiment with digital technology, inspired in large part by work he saw at the MIT Media Lab.

I first became aware in the early ’90s when there wasn’t an Internet yet. It was called “new media.” No one quite knew what that was, but everyone was afraid of what it could be and wanted to be more familiar with it. I was editor of the Jersey Journal in Jersey City, New Jersey, and in the third generation of a family business. And so because no one else in the business really cared or wanted to pursue new media, I elected myself.

Steve Newhouse on key differences between print and interactive media.

I joined a consortium at MIT, “News In the Future,” which was a really pioneering effort by Nick Negroponte, who ran the Media Lab, to investigate the changing landscape and [was] remarkably accurate in its focus and prediction. I remember sitting with the grad students in the Media Lab and hearing a view of news that was digital, that was interactive, and was community based. I actually saw the Internet for the first time in the Media Lab. It was before Netscape. It was text-based. It looked like the early computer programs where you typed in equations and got an answer.

The leader of that lab was Nicholas Negroponte, who helped many established media executives get an early view of the coming digital revolution even before their companies could legally register Internet domains.

The Internet, or ARPANET, as it was called, and DARPANET, as it was called after that, wasn’t available to companies until the mid ’80s. In fact, I think it was ’87. It wasn’t legal for companies to use it. The reason I know that is that when we opened our doors for business at the Media Lab, which was October, 1985, we were fronting for companies to have email addresses because we, as an academic institution, could have them. It wasn’t quite laundering, but it allowed companies to have Internet access. We started…I believe in ’87…something called “News and the Future.”

Paul Sagan

Why did you do that? What did you see?

We did that because we saw the nature of news changing very quickly. We had something called “Television of Tomorrow” that predates it by about two or three years, but that was really the technology about high definition and delivering television over telephone lines. It was very tech oriented. The “News in the Future,” we thought, would be more content oriented. We basically went to media companies and said, “You better hedge against the future and fund us.” I believe that at our peak we must have had 50 or 60 [sponsor companies].”

We had every single one of those [big media] companies as a member of “News in the Future.” The only one that was a holdout that I don’t think was ever a part of it was The New York Times. I remember in 1981 or ’82 going down to The New York Times with Jerry Wiesner [president of MIT] to see [Times executive] Sydney Gruson. Sydney and Jerry have this story they’re chatting away about. Then Sydney Gruson looks at me and says, “Young man, what is the future of newspapers?” I said, “Sir, it’s to wrap dead fish.” Jerry Wiesner never forgave me for that comment. When we did our first electronic newspaper here at the Media Lab, that was really the first web application. They named it Fish Wrap, sort of in honor of that remark.

AOL founder Case remembered that in the pre-web days, even AOL was prohibited from exchanging data with the Internet because it was still not commercialized.

What’s interesting to me is that when we started in 1985, it was illegal to connect a commercial online service to the Internet. The Internet, I believe it was [until] 1991, was only for government use and university non-commercial use. Businesses could not operate on the Internet. A company like AOL could not connect to the Internet.

Our positioning in that early- to mid-1990s was AOL certainly got you access to the Internet and a whole lot more that was exclusive to AOL. That drove a lot of the growth in that 1990s period, when people were beginning to learn about the Internet. The World Wide Web was just beginning to emerge and come of age, and the way you could access that through AOL gave you a better Internet experience, plus some things that were only available if you were an AOL subscriber.

Even today, Ted Leonsis questions the conventional wisdom that the walled gardens failed because they were closed as compared to the web and the greater Internet.

We saw this other world emerging, and we were being sneered at. Remember? “You’re a walled garden. You live in the Walled Garden.” I laugh now because Apple’s the most valuable company in the world. They’re the ultimate walled garden.

And in spite of the burgeoning digerati’s condescension toward AOL as the “Internet on training wheels,” the online giant thrived in the early years when the web took the world by storm.

We started the company in 1985. We went public in 1992. It was seven years later, and we only had 200,000 customers after seven years. Seven years after that, when we were looking at, and did merge with, Time Warner, the number had gone to 20 million. But it was only the second decade when it really took off and everybody woke up to the idea of the Internet. Thankfully, at our peak, a majority of Internet usage in the U.S. flowed through the AOL systems.

Still some legacy publishers, such as Newhouse Communications, proceeded from Day One without help from the likes of AOL.

Over time, at the Media Lab, I became convinced that the Internet was the way of the future, [and we] decided to embrace it as our publishing platform. We never did a deal with CompuServe, or Prodigy, or AOL. At the same time [Nick steered us to] an unknown magazine called Wired, which had been founded in Amsterdam by Louis Rossetto and Jane Metcalfe. We made an investment in Wired.

…I became the Advance representative to Wired and would go out there [to their office in San Francisco] every couple of months and sit with Louis and Jane, and they were really pioneering people. So in the early ʼ90s we decided to start Internet sites. It was really based on the first [media company] Internet site that ever existed, which was at Wired magazine. It was called “Hotwired.”

Steve Newhouse hired New York Daily News president Jim Willse as Advance Communications’ first new media executive, and he in turn, hired Jeff Jarvis, who began planning the site that would become NJ.com — one of the first major local or regional online news efforts — as part of their effort to navigate the digital currents running across the industry.

As a sense of how early we were, we were able to sign up URLs like NJ.com, Cleveland.com, Syracuse.com because no one was doing websites with those names. Now, if I had been really smart, I would have bought a thousand of the best URLs and made hundreds of millions of dollars. But so be it. We just bought city names.

On the national side, we tried to think of how we could apply what we were seeing at Hotwired to magazines, and we decided to start a food site and build a Hotwired-like site for food because we thought looking for recipes would be a good application, which it turned out to be. That’s when we started Epicurious.

We felt that we needed to give the new medium new brands and experiment with new things. Epicurious was both a site that combined content from the two food magazines at the time, Gourmet and Bon Appetit, with a searchable recipe database and all sorts of other enhancements…that made it to the Internet. Most importantly, we believed early on in interactivity, and we allowed our users to comment on recipes, so the recipes became annotated with the comments of people who actually used them, and that became very popular.

Certainly, the newspaper companies like Knight Ridder and Newhouse weren’t the only publishers taking an active interest in moving content online. At Time Inc., the largest magazine publisher in the country, interest in digitizing the titles actually arose from the journalism ranks. Walter Isaacson, soon joined by Paul Sagan from Time Warner’s cable division, worked with a small team to bring news from titles as diverse as Time, Fortune, People, and Sports Illustrated initially to the proprietary services and soon after to the web.

John Huey

Walter, can you conjure for us your first time? When the light bulb went off over your head and you said, “Ah, this digital technology in journalism is going to really change the way this all works?

Yeah. It was on a New Year’s Eve [1992], after we’d come back from a party, and Phil Elmer DeWitt had been pitching a story called “Cyberspace,” what’s happening online, digital media. I was back-of-the-book editor at Time, and late that night I went online to the Well, which was one of the early bulletin board systems that Phil had told me to go on. Totally dial-up. It was complicated because we didn’t even have dial-up modems. I had to borrow a dial-up modem. It was like 2,400 baud or whatever.

I noticed hundreds of people in these bulletin boards and sort of chat rooms. They weren’t live chat, but it was close, talking about New Year’s Eve and talking about the year, and [I was] thinking, “Whoa, there’s this whole cyber community.”

Walter Isaacson on what initially got him interested in online journalism even before the web.

We ended up three or four weeks later using the people from Mondo 2000 — which was an early pre-Wired magazine…about the digital age — [to produce a cover for Time]. We even had hypertext, which was…the web had not flowered. There were no Mosaic browsers yet. But hypertext was still being used. And so we ran the story and some words were underlined, or in red, and they would point to things in the margin that would explain it.

After that we said, “Why don’t we put our own magazines online,” and I asked Phil. We started playing off AOL, CompuServe, and Prodigy because this is before Mosaic had made the web very accessible. If you put it up with AOL or CompuServe it had to be their subscribers. They would get revenue by the fact that the longer somebody stayed online with them the more they would pay those companies, and we would get a cut of those revenues with approximately a million dollar guarantee [from AOL].

At that magazine conference in 1993 I remember being with Louis Rossetto, who had just launched Wired magazine [and we talked about this]. But then Louis and I talked a year or so later, and we said, “Why don’t we put it directly on the Internet?” as opposed to one of these online services that were walled gardens. We made those deals with AOL, Prodigy, and CompuServe without much corporate knowledge or interference until it got to be about a million dollars of revenue a year, at which point they were paying attention. Then we had to pitch them, “Can we cut out these online services?” which wasn’t a good idea because the online services were giving us money, but it was an inevitable idea.

Every now and then we’d go up to Reg Brack, who was then president of Time Inc. He would say, “Well, who owns the Internet?” and things like that.

For an early adopter of digital technology, like Time Warner CEO Jerry Levin, the advent of the web seemed to offer a promising way to bring together a unified strategy for creating content, distributing it, and making money.

[Walter] came into my office and said, “There’s something called the World Wide Web. You ought to take a look at it.” It showed that somebody had finally figured out a unification strategy…. Somebody brought an agreed-upon standard so that all parties could have access to signing on and getting something back. That there was a universal code. I thought that was transformative.

John Huey

When you go back and look at the development of all this, you look at all the decisions that were made and all the coming together you described, of trying to juggle technological development with content development…Is where we are today pretty much where we would’ve ended up, inevitably, no matter what, or were there things…I’m not just talking about Time Warner, I’m talking about the whole landscape. Is there another path that, had it been taken, things would be profoundly different today? In other words, is the march of this technological disruption inevitable to all the business models, or were there other ways to have ridden the disruption that would have ended up in a profoundly different place?

I think we’re where we were meant to end up. The disruption was simply the notion of a network that has no central control that can deliver near infinite capacity. And everybody tries to figure out how to make money and what to deliver over that network. That’s where we’ve ended up. Everything pointed to that. No one owns it. I think it’s a beautiful thing.

Paul Sagan

There have been disruptive technologies in the past. Print, movies, radio, and TV. But they all accommodated each other. They didn’t kill each other. Then something happened with interactivity when we got to a public standard, or the web standard. It really started to not just make room at the table but really hurt the old distribution. Was this disaggregation or digitization? What was it that made it disruptive, as opposed to incremental?

Because it made the old form of distribution totally irrelevant. There was zero need. At least I can still go to a movie theater. There’s some socialization. Popcorn. Booze. But music, the fact that you had to buy music on a disk or listen to it on the radio…And now you can get any piece of music at all, anytime, anywhere. Why do I need anything else? This is why it’s slowly going to take the networks down. I can get online and get anything I want.

Paul Sagan

Same for journalism?

Yeah.

Pathfinder.com’s homepage, October 3, 1995. (Pathfinder Museum)

As a result of this early online experimentation at Time Warner, and with Levin’s support and encouragement, Isaacson and Sagan began working on two new media projects. One was a narrowband web service that pulled magazine content and other features together in a sort of digital newsstand they called Pathfinder. At one time it was one of the most visited sites on the web. Today it’s a single page that points from pathfinder.com to the homepages of the company’s magazine sites. The other sought to combine the broadband potential of the modern cable TV plant with direct connectivity to the public and now-commercialized Internet in a service that would come to be known as Roadrunner, named for the speedy cartoon character from the Warner Bros. stable.

It worked pretty well. We created something called Pathfinder in ’94. It was like some of the aggregators, like The Huffington Post, in a way. But it was Time magazine, Sports Illustrated, and People. It was all on a homepage. Once people got on the web, [though], they didn’t need people to package things for them. They’d do whatever they wanted.

Paul Sagan

That’s right. We arguably created the first portal. We looked at the ones that developed around search, which were really guides. We were wrong. We kept saying, “We could build a guide, too.” We looked at Yahoo and said, “We could do that, too.”

But even before Yahoo was a dream, there was some kid somewhere who started doing “my favorite websites.” It would be sports. It would be art museums or whatever. We said, “That’s how it’s going to work.” It’s going to be a directory service. That’s how you’ll find things on the web. You’ll go to a directory and find it. We did not think that kids at Stanford like Larry Page and Sergey Brin or Yahoo or whatever would create an ability to search the web well. There was a phrase back then that “content is king.” And we actually believed it.

Pathfinder was good for what it was, which was a portal. It was a place you landed on if you went right to it. We had always believed that what we were going to do was bring people into this portal. Then, when they got the content, they would subscribe to it. They would pay for it, just as you paid for any other service or magazine or subscription you had. We had an elaborate scheme for charging people, almost like The New York Times is doing now. You got a little bit for free, but then at a certain point a paywall hit.

But I remember vividly the day in mid-1994 or so when Bruce Judson (who worked on the business side of Pathfinder) came up with the concept of a banner ad. Yeah, Wired did it as well, but it was like the microchip being invented in two places at once.

Paul Sagan

It was literally one day apart.

It wasn’t the hardest concept in the world, which is, “Let’s put a banner ad on top,”…but it drove a lot of the whole shape of the business for a long time.

It really transformed everything. Immediately, Madison Avenue decided, “Oh my God, we’ve got to understand this. We have to hire a lot of young people. They would send us money. It was almost like you could look out of the Time Life Building to Madison Avenue and watch people walking with bags of money to dump it on our desk, or Bruce Judson’s desk, to buy banner ads because they all wanted to be in on this thing. What this does is, it taught us we shouldn’t charge for content. We should just get as many eyeballs as possible. That’s the way we’re going to make money. By aggregating eyeballs.

Chapter 2: America Goes Online

Microsoft’s Bill Gates and AOL’s Steve Case announce a deal, 1996. (AP/Lacy Atkins)
In watching the video pitches for the early teletext, or videotex, services, it’s easy to be amused by their Paleolithic production values: the clunky fonts, the syrupy speed, the awkward remote clicker. And yet, most of the content being hyped is eerily prescient of what was to come for the interactive consumer over the next 25 years: “real time” sports scores and stock quotes, “electronic” games, a directory to find an ethnic restaurant in a particular neighborhood, and of course, “news” (from the local newspaper), scrolling across the TV screen. Once the smug laughter fades, the real takeaway may be that there really aren’t any new content ideas, only new technology platforms.
So, by the mid-’80s, when the media giants were folding their costly experiments to marry the telephone with the television, and basically turning their backs on the notion of an interactive future, the real key to that future — the personal computer — was proliferating in offices everywhere, having been introduced in the mid-’70s and then to the mainstream business community by IBM in 1981. Another significant moment came in 1983, when Apple introduced the innovative Macintosh, a more user-friendly device that was clearly meant for more than crunching numbers at work; it was, in fact, the birth of self-publishing, a phenomenon that would later have enormous impact on the news business.

Steve Case on major shifts in AOL’s business model, including the move to unlimited pricing.

By 1985, two entrepreneurs, Steve Case and Jim Kimsey, had converted a struggling interactive company called Quantum Computer Services, which had begun under previous management as a dial-up interactive Atari gaming company called Control Video Corp., into something called America Online. It — and for a while its competitors, CompuServe, the Source, Delphi, the Well and Prodigy — would launch the “dial-up” era of so-called “walled garden” proprietary online services, which would explode on to the consumer market and pave the way for much of how news and information services would be distributed and consumed for years to come.

AOL took its stock public in 1992 and over the next few years peppered the country with its free software disks, like some Johnny Appleseed of interactivity. The combination of AOL’s simple, user-friendly interfaces and rapaciously aggressive marketing skills paid off handsomely. The company eventually gathered an audience of more than 30 million paying customers into its “walled garden” — racing from behind to surpass early mover CompuServe, and having a huge impact on how consumers would behave online for years to come. AOL was where many Americans acquired their first screen names and their first email addresses. They had their first “social media” experiences hanging out in AOL chat rooms; they used instant messaging in ways remarkably similar to the early Twitter experience. They even went to the movies and related as Tom Hanks and Meg Ryan hooked up to the sound of that familiar voice then streaming into everyone’s living room with the not-so-subtle reminder of all the excitement that could await you online: “You’ve got mail.” Could it really be Tom or Meg?

For this project, we asked Walter Isaacson, historian, journalist, and president and CEO of the Aspen Institute, to interview Case.

My interest in the space really started a few years before, when I was still in college. I think it was 1979. I read a book by Alvin Toffler called The Third Wave. He was talking about a number of things that were going to happen in the future. But one of them was the idea of an electronic cottage.

Someday, people would be living in this more interactive world, getting information in new ways, communicating with people in new ways. It struck me as an obvious thing that eventually would happen….

How did you see AOL, originally? What exactly was the mission, in terms of forming community, helping with email, delivering content and news?

When we started AOL in 1985, only about three percent of people were online [for about an hour a week]. It really was a pretty niche, almost hobbyist kind of market. Our goal was to expand it and make it much more of a mass market, mainstream phenomenon. Everything we did was geared towards that, trying to make it accessible, easy to use, and more affordable — more useful, more fun, things like that.

Our big bet, even back in 1985, was what we called community. Now people refer to it as social media or other kinds of things, but we thought it was the killer app…. People interacting with people they already knew in new ways that were more convenient, but also people interacting with people they didn’t yet know, but should know, because they had some kind of shared interest.

Even in 1985 we launched things like People Connection or chat rooms, [and] things like instant messaging, buddy lists, and text messaging came out of that. We really always focused on that. It always accounted for the majority of our use. We had a lot of different things as part of AOL, but those community features were the main event in terms of use.

“I’d say, ‘Rolling Stone magazine didn’t create MTV. The New York Times didn’t create CNN. Don’t let that happen to you.'”
Also in 1979, two years after graduating from Georgetown University, Ted Leonsis travelled to something called the West Coast Computer Faire, where Commodore, Osborne, and early Apple computers were being hawked from booths. He bought an Apple II computer, consisting of a motherboard, a keyboard, and a separate cathode ray tube. Outside the hall, he paid a sidewalk vendor six dollars for a homemade manual (wrapped in a Baggie) that explained how to put it together. While there, he met digital pioneer Robert Metcalfe (who co-invented Ethernet at Xerox PARC and later founded 3Com), and came home convinced that the computer, television, and software were somehow all destined to merge into a new form of media. Leonsis then went on to found a series of ventures that included software directories, buyers’ guides to Macs and PCs, a private satellite business, and an interactive shopping business on CDs. By 1993, he was mayor of Vero Beach, Florida, and running a “new media” company called Redgate Communications, where he coined provocative slogans like “New Rules, New Media” and “Digitize or Die.” Then he met Steve Case, and the almost overnight shotgun marriage of their two companies would accomplish Steve Case’s goal faster than anyone could’ve imagined.

I thought I should hire an investment bank, which I did. My investment banker was Dan Case, who was head of Hambrecht and Quist. Dan worked really closely with us and one day said, “I’ve got a brother who’s just been named head of this little online company, and you talk about stuff the way he’s talking about stuff. He’s seeing the world from one vantage point, you’re seeing it from another, but you’re seeing something very similar. Can I introduce you?” And so I had breakfast with Steve, and over coffee he bought my company.

I remember saying to Steve, “Can we kiss first? I mean, can we date?” He’s like, “Life’s too short to drink bad wine, and this is what we should do. We should merge our companies. You have 150 people. I have 250 people. I’m $40 million in revenues, you’re $20 million. We’ll get scale. There’s not that many people out there that get it.”

What was the idea? Because Steve didn’t like advertising at AOL.

Ted Leonsis recalls his first experience with a computer in college in 1976.
[AOL was predominantly a B-to-B company.] People forget that AOL started as a private network for Commodore, Q Link, and a private network for Apple-AppleLink — and one for IBM. My experience in the sponsored publishing business was similar. Steve brought all of those together, and that’s how America Online was started.

And I get online at 1,200 [baud], but what do I do? We were talking about content and interactive shopping and communications apps.

We were all young, and it was populist. Our message was ease of use and take the drudgery out of your business day.

You would pay AOL $1.35 an hour to be online. We went from 1,200 baud to 9,600 baud, and now you could get a photo delivered. It painted (slowly on the screen). We had our own proprietary thing called Rainman. It would fill up the print, and while you’re reading the print, this photo would, we’d say, “magically appear!” [laughter]

[To Steve Case:] Let me plug the theory that, like Steve Jobs, you believed it had to be really simple, and you had to get people online in an unintimidating way. Those disks and the marketing that would come with Time magazine. You’d say, “Oh, this can’t be that hard. I can put it in and it says ‘You’ve Got Mail.'” Which made it, to me, more distinctive than The Well, Prodigy, CompuServe, which always seemed a bit more intimidating to the average user.

They were more intimidating. We spent a lot of time designing our software and our services to make them as simple as possible. The mantra at the time was, “We want to make this easy enough for my mom to be able to use.” My mom always resented that…. She said, “Why don’t you pick on your Dad?”

But the idea was that we didn’t just want to appeal to technologically sophisticated people. We really wanted everyone to get online. We really wanted to get America online. In order to do that it was going to have to be simple. Some of that was the software. Some of it was things like getting PC manufacturers to bundle the modems in and bundle our software in….

Then we [bundled] our software with magazines and a variety of other products so that no matter where you turned you would see AOL, and it would be coming to you from a trusted, credible endorser, if you will. It might have been IBM bundling us on the computer. It might have been Time magazine bundling our software with their magazine. It was a way to make it easier, but also a way to basically say: “It’s safe to get in the water. It’s time to get online.”

In the process of building its nationwide service, AOL had established a wide network of local dial-up “nodes,” which saved subscribers from having to make long distance toll calls. At the same time, the fledgling service was hungry for content.

We had the idea of, “We have this national network, but we have these local nodes. And what we should do is create affiliates with local companies.” The first company we went to was the Tribune in Chicago, and they embraced us totally.

Paul Sagan

And invested.

They made an investment that ended up, I think, making them about $4 billion. It was obviously their best investment, but they wanted to learn about digital. They carved out the Chicago territory, so when you logged on to AOL from Chicago it would come up with AOL News, followed by Chicago Tribune news. Then they programmed Chicago Tribune Online. We did the same thing with the [San Jose] Mercury Center, and The New York Times [embraced us].

Where I believe the first generation of journalist/publisher fell down was that they didn’t internalize that this was the birth of a whole new industry. I remember, we’d have our partner conferences, and I would plead with companies. I’d say, “Rolling Stone magazine didn’t create MTV. The New York Times didn’t create CNN. Don’t let that happen to you. Understand the new medium and build new properties, new brands for it. Just taking Time magazine and making it available online isn’t taking advantage of all the things that online is bringing.”

One of the people who first heard AOL pitch its call to digital arms was Tim Landon, then at the Tribune Company, which not only invested early in AOL and made billions on its stock, but also experimented with putting local news content online under its own brand.

Tim Landon

A guy showed up on our doorstep [in 1991] and essentially he was trying to reposition his service into an online news information service. The guy was Steve Case. I got involved [because] I had written things…basically saying that these early-stage dial-up proprietary services — Prodigy, CompuServe, Genie — had made a market connection between buyers and sellers, and that that market would displace our classified advertising market. So I was invited into these meetings.

I remember that Steve Case had somehow convinced Apple…to be their proprietary service. I can’t tell you if it was Case’s Procter & Gamble’s marketing skills (or because it was the Apple interface), but my perception, as a young person, was that AOL — which was not AOL at that time but Quantum Computer — was more user friendly than those others. A guy named Mike Silver deserves a lot of credit because we…very quickly invested $5 million in AOL for 10 percent. We private labeled it in Chicago with Chicago Online. From then on, in different variations of my life, I was very focused on, “How do we take the legacy business and the legacy cash flow and redeploy it and create digital assets?”

As you’ve just described, Tribune invested very early in AOL. In ’93, ’94, the web starts going and the Tribune Company, but in particular The Chicago Tribune, is now starting to build websites. Most of what people did in that era was pretty much just simply repurpose the editorial content from the paper and put it online. You guys had the distinct advantage of having a lot of visibility into a service that was succeeding with the consumer. Clearly, they were doing a lot more than publishing newspaper copy into an online service. Did you guys, at that point, think about what AOL was succeeding at doing and triangulate that back to the newspaper?

Tim Landon

If you recall, AOL was declared dead a number of times….When the open web was launched, there was a real question by the digital intelligentsia whether AOL would survive. The period you’re talking about, we were wrestling with a number of things at Tribune. One was, “Is AOL just a passing fancy and were things really moving to the web? There was tremendous energy on the editorial side of Tribune to take control of our destiny and not be captive to an AOL environment, but publish on the open web. That was one factor. Another factor was…Ted Leonsis. Ted is a tremendously charismatic and compelling figure.

He was making the pitch [for us to stick with AOL]. He said, “I know AOL is screwed up. We’re an early-stage company. We’re making all sorts of mistakes.” It’s hard to believe this — it shifted very quickly — but at that time in the history of Tribune we’re by far the stronger company and viewed AOL as needing us. We didn’t need them. Ted was saying, “I know you like your newspaper buddies. I know you like fishing and golfing with them. I know I’m kind of fat. But I’m telling you, we’re going to win, and you should do your classified stuff with us. Build these marketplaces with us.”

Just to give you a little color — and I don’t think Ted would mind about this — we’re in those fancy conference rooms, the Colonel’s former office [at Tribune]. The meeting breaks up for a bathroom break. We go outside. Ted pulls me aside and he says, “Look, I’ll give you $5 million right now. Just come with us and build it with us.”

I did not feel that was an appropriate thing, in terms of my fiduciary responsibility. We end up saying, “God, we really like these AOL guys, but it’s so disorganized. It’s chaos. Everybody’s saying it’s going to shift away from AOL. Let’s build it outside of AOL.” That’s why we started Classified Ventures and CareerBuilder. And I really think, on the news side, it was a similar set of discussions.

Eventually we monetized that five- or ten-million-dollar [investment] into two-and-a-half billion dollars. [Authors’ Note: Leonsis says $4 billion.] But it was a hedging strategy….In retrospect, we could have cut a deal there. We could have owned and controlled those channels on AOL. As it played out [from ’94 to ’99], to be able to program a national news channel, a local news channel, the employment channel, the auto channel, the real estate channel on AOL, we would have created a lot of value for Tribune Co. Just one man’s opinion.

The drive to persuade local newspaper companies to come online inside AOL would continue, but as Leonsis recalls, it wasn’t always met with the same enthusiasm as in Chicago.

And then we went to The Washington Post. We said, “It’s such a natural. We’re in D.C.; The Post is in D.C.” At the time there were some people that thought what we were doing was easy. How hard can it be? You buy some computers, you send out some disks, you hire some editors. I remember Steve and I went to a meeting, and it was obvious that they [The Post] couldn’t make that decision. We were driving back and Steve asked me, “So what’s your Plan B?” And I said, “Well, how hard can it be to do what they do? What do they do? They hire some writers. They get a photographer. Why don’t we make a local media product and try it in D.C.? It would at least get their attention, and we’ll learn something.” So we launched AOL D.C. That was the precursor to Digital Cities.

John Huey

So you were forced into the news business?

Oh, totally.

Donald Graham recalls that newspaper circulation has been dropping for decades, starting well before the Internet came along.

One of the biggest challenges established media companies faced in moving online wasn’t the problem of finding successful business models, it was the difficulty of creating successful online cultures inside legacy publishing companies. Eventually, they suffered a sort of “Revenge of the Nerds” when it became clear that without hiring and empowering computer scientists in roles of real importance, the legacy media companies couldn’t keep pace with the new all-digital entrants. Despite having passed on a deal with AOL — for content or maybe even something grander like a major investment or acquisition — this lesson of engineering wasn’t lost on Washington Post publisher Don Graham (who, as mentioned, finally threw in the towel in August 2013, selling The Washington Post to Jeff Bezos, no stranger to building and leading engineering cultures).

You would have to look at AOL and say, the lesson of this is not the uses it’s being put to. The lesson of this is that it’s being built by a kind of people we do not have in these walls [at the Post Co.] and we’d better go get some. [Bill] Gates, at that time, was going to everybody’s editorial board and saying, “Good technology people won’t go to work for people like you. Good technology people want to work for Microsoft.” He was wrong. He was wrong. Good technology people want to work on hard problems, and news quickly became a very famous hard problem.

Chapter 1: The Teletext​/​Videotex Era

Frankfurter Allgemeine Zeitung shows off its videotex system in Berlin, 1983. (AP/Elke Bruhn-Hoffmann)
In the beginning, there was print. And then there was the telegraph, which enabled news “wires,” and then radio, followed not too far behind by television. And while each new entrant wrought disruption, all soon found stable paths of coexistence and even fresh lucre (while network TV killed Henry Luce’s enormous Life, it also spawned Walter Annenberg’s huge TV Guide). Then, sometime just before the 1980s, the worlds began to intersect slightly, with the first emerging hints of a future for publishing beyond print. That’s when journalism companies, including newspapers, broadcasters, and fledgling cable operators, invested heavily in early consumer information services that bridged the telephone and television with a low-cost “decoder” box to deliver text and, in separate ventures, pictures.
A 1981 report on KRON-TV San Francisco on an early effort at digital distribution of news.

Warner Cable famously debuted its interactive Qube service in Columbus, Ohio. Knight Ridder launched its Viewtron videotex service in Coral Gables, Florida. Time Inc. fielded its Time Teletext service in Orlando. Times-Mirror Co. launched Gateway in Orange County, California. And PBS, CBS, and NBC each had broadcast teletext versions.

There were those, such as Jerry Levin at Time Inc., even before it was Time Warner and he was CEO, and Roger Fidler at Knight Ridder, among others, who anticipated that being able to move content — the news — digitally would be transformative and even produced a video in the mid-’90s of how news could be delivered to electronic tablets that wouldn’t be fulfilled until Apple’s breakout product, the iPad, was introduced in 2010. But their experiments came too early, before there was enough bandwidth, enough processing power in the hands of consumers, enough devices in the market, to build new businesses.

My whole introduction to journalism and technology was all about two-way. There was no talk of digital at the time. No Internet. No computers. It was taking all these pieces and seeing how you can get interactivity. That was the goal….

Before we [Time Inc.] started HBO [1976 or 1977] I was in Sterling Manhattan Cable in a little office working on the business plan. Next to my chair was an AP news wire with a camera in front of it. In the cable system at the time, that’s how news was delivered to the audience. What fascinated me was I was more interested in reading what was coming off the wire. I thought this was fantastic because somebody at home could get the news just as quickly as any reporter working for any company. That was a pivotal thing for me. I didn’t think it was primitive that there was a camera set up in front of a news wire.

After we started HBO, I kept thinking about ways of delivering news into the home…I was taken by Life magazine and pictures…I asked one of the engineers at Manhattan Cable, is there a way you can get a news wire into the home? Let’s get pictures into the home because…”To see Life, to see the world,” that’s what Henry Luce said about Life.

Gerald M. Levin talks about Time Warner’s myriad interactive projects from the earliest experiments to the Full Service Network
[He told me they] had this technology called slow-scan technology. A photograph will wipe across the screen. Now it takes a little time and people may get a little impatient, but you can deliver a picture. We set it up in our office…and I thought, it’s probably going to be too difficult for people, but at least they gave me the notion that you could deliver text and you could deliver pictures….

Teletext was part of this drive [for interactivity]. I don’t know how I was able to get authorization [I was running the video group at the time] to build a studio that would deliver journalism that was theoretically two-way [but was actually one-way] and was called Teletext…. We got a number of journalists involved. We created a Teletext newsroom. It was to be delivered to Orlando by satellite [from Queens, NY] into something that wasn’t a cable converter box. …I thought, “This is great because we can test how much information the consumer can handle, what kind of journalism, what kind of information.” The most interesting finding was that we couldn’t deliver enough information fast enough, deep enough, to satisfy the consumer’s appetite. Rather than being, “hey, we’re on to something with this technology,” it suggested that if ever you could find a technology that had much greater capacity, that was truly two-way, the consumer would be there.

Time Teletext was eventually introduced in underwhelming fashion with the tagline, “Our time has come,” when sadly, as the corporate promotion seemed really to demonstrate, it was still a distant dream. But it wasn’t the only digital news idea that wasn’t ready for prime time.

In 1979, in January, Jim Batten [Knight Ridder’s CEO] called me and asked me if I could come to Miami to talk about a new project that they wanted me to be involved in, but he wouldn’t tell me what it was. I flew to Miami, met with Batten, who told me at the time, “This is our top-secret project.” He called it our Manhattan Project to develop an electronic publishing system that was being developed in England at the time called ViewData or Videotex. He wanted me and this group of three other people that had been chosen to go to England, learn all we could about the videotex service, one that was being developed at the time called Prestel, and then come back and build a similar system in the U.S…. From 1979 to ’83, I worked on the Viewtron project…. We weren’t allowed to talk about what we were doing because we were afraid at the time that Times Mirror and other companies might get a jump on us.

A 1983 promotional video for Viewtron, an AT&T/Knight Ridder joint effort launched in Florida.

At the time, you may recall back in the late ’70s, early ’80s, there were already people predicting that at some point newspapers would be replaced by digital technology…. So in ’81 there was the APME [Associated Press Media Editors] that invited a number of editors and designers to write an essay and perhaps create some images of what they thought newspapers might be like after the year 2000.

At the time, everyone thought I was totally crazy. This was total science fiction in the minds of the editors I talked to. I remember John Woolley, who at the time was the editor of the Viewtron project, said to me that this was a “nutball idea” that would never happen.

Do you take any lessons from Viewtron?…It was a very bold and costly experiment in the early ’80s. But it was shut down. As we all know, it was termed a failure. What lessons did the company, or did you learn from that?

Quite a few. One of the lessons, of course, is when you are developing any new technology, those who are involved in the project believe things will move much more quickly than they actually will. It’s just normal human nature for things to take a while before they catch on. Paul Saffo, at the Institute for the Future, talks about his 30-year rule: That usually in the first decade of a new technology as it comes out of the lab…there’s not an audience prepared for it. Often that first wave fails. The second decade a newer technology emerges, and people are becoming more aware of it. It starts to take hold, but…there are still a number of failures.

Then it’s the third wave, or the third decade, where if it’s a successful technology at all, it becomes commonplace. People accept it as part of their everyday lives.

A Viewtron user in south Florida, 1980. The message on the screen: “Doug I like you very much. I want to know which of us you like better, Katy, Tiffany, or Leslie (me). I hope it is me!!!” (CC)
Nicholas Negroponte on the founding of the MIT Media Lab.

As early as the late ’70s, what would become the MIT Media Lab was beginning to show off functional technology eerily similar to what would become touch screens, interactive graphics and user-controlled displays in this decade, embodied perhaps best in Apple’s iPad, brought to market at scale.

The early trials taught these interactive pioneers other lessons that would be a harbinger of trends to come more than a decade later. As Fidler explains, the newsrooms thought their news was most appealing to users, but it was really the new ways of communicating through networks that excited the customers.

We also made the mistake of assuming that it was going to be the newspaper content that was the most appealing content that would drive the service. Even though our research was showing us the things that were driving the service more in the early days were email, online chat, the auction services we had, games, entertainment.

News was not the top feature that people were looking to, even though when we’d interview people they would say news was what they really wanted. When we were following what they actually did, it was quite different from what they said they were doing.

Roger Fidler describes Knight Ridder’s early efforts to build an interactive newspaper display device

Had the Viewtron project been more of an ongoing R&D project to deal with digital technology, more as a lab experimenting at a lower cost rather than ramping up quickly to, at one point…close to 250, almost 300 employees…They were putting a lot of money into it to try to go national. So when they couldn’t see a large enough revenue stream from it, they shut it down, believing it wasn’t going to catch on.

By 1986, most of these interactive services were shuttered, having incurred significant losses at their parent companies, which led to a sustained period of disinvestment in interactive media by legacy media companies. Only one of these services, Ceefax in the U.K., actually hung on until 2012, and the early failure of the rest led to a feeling of false security across the industry.

Print felt pretty good…these technologies were either so inefficient or so far in the future that we didn’t need to worry about them or adapt to them. These were all failures. Teletext was considered a failure…the $25 million number sticks in my head, but it was a costly thing…. The video group was the darling of Time Inc. at the time, and there was a lot of interest, but then we…shut it down. So when you shut something down at Time Inc. it’s a failure. It’s not a success.

Robert November describes some of the first attempts by The New York Times to create a digital news business.

One of the themes that seems to be true throughout this whole period and well into the ’90s and beyond, is that large corporations — maybe because of their culture, maybe because of the point you made that it wasn’t a threat — just don’t seem to be able to adapt as quickly to some of the digital technologies as the entrepreneurial community that operates on a, in a funny way, slower but faster cycle. At the same time as you’re shutting Teletext and Knight Ridder is shutting down Viewtron and Times Mirror is shutting down its service…the Quantum Computing guys are starting up [what becomes] AOL. That must have seemed trivial at the time.

It was always an issue. A large corporation…makes most of its money — and therefore its Wall Street success is based on — its inbred businesses. The threats seem unavailing because you’re walled up in your own secure revenue generation, but it was at least clear that we wanted to start something.

Introduction

A New York Daily News truck heads out for delivery, 1978. (AP)
For most of the 20th century, any list of America’s wealthiest families would include quite a few publishers generally considered to be in the “news business”: the Hearsts, the Pulitzers, the Sulzbergers, the Grahams, the Chandlers, the Coxes, the Knights, the Ridders, the Luces, the Bancrofts — a tribute to the fabulous business model that once delivered the country its news. While many of those families remain wealthy today, their historic core businesses are in steep decline (or worse), and their position at the top of the wealth builders has long since been eclipsed by people with other names: Gates, Page and Brin and Schmidt, Zuckerberg, Bezos, Case, and Jobs — builders of digital platforms that, while not specifically targeted at the “news business,” have nonetheless severely disrupted it.
The precipitous fall of the industry that produces what we have come to call quality journalism — that is, independently reported, verified, branded information published or broadcast by institutions prepared to “stand by their stories” despite pressures from commercial or government interests — is hardly a fresh subject. Tens of thousands of articles, books, research papers, and documentaries have been devoted to the topic.

Tectonic Shifts in News:
A Few Good Reads

Post-Industrial Journalism (Tow Center for Digital Journalism)

Leading the Way to Better News (Geoffrey Cowan)

Information Needs of Communities in a Democracy (Knight Commission on the Information Needs of Communities in a Democracy)

Why Newspapers Matter (John S. Carroll)

Big News Forges Its Own Path (David Carr, New York Times)

Not surprisingly, the press hasn’t treated this story like just any other industrial disruption. With newspaper news jobs down by 30% in little more than a decade, this issue hits as close to home as possible for journalists. More importantly, some go so far as to argue the disruption is so profound that it threatens the future of democracy itself.

Reasonable people can — and do — debate whether the replacement of legacy media by new forms of information gathering and distribution — including citizen journalism and smartphone photojournalism, crowdsourcing, universal access to data and, of course, a world awash in Twitter feeds — makes democracy more or less vulnerable. Usually the argument is reduced to a couple of symbolic questions: Who’s going to pay for the Baghdad bureau? Who’s going to replace the watchdog function at city hall traditionally provided by healthy metro newspapers?

The arguments supporting the idea that the decline of quality journalism threatens democracy are frequent, familiar, logical, and voluminous, and they come mostly from either academia or people invested one way or another in the legacy journalism business.

As Alex S. Jones, director of the Joan Shorenstein Center at Harvard’s Kennedy School (sponsor of this site) writes in his book Losing the News, The Future of the News That Feeds Democracy:

It is an article of faith among journalists that what they do is essential to democracy. Indeed, if one were to eavesdrop on a gathering of traditional journalists deploring the state of the news media, it would be easy to conclude that without high-quality journalism, American democracy would be hugely diminished. This is a view also shared by many nonjournalists of all political persuasions, even though these same people might also be very critical of the media. Despite their quarrels with the news, they recognize that reliable news is important. If news isn’t credible, it loses its ability to persuade. If news institutions cease to be trusted to be honest brokers of information, then disagreeable or politically unwelcome news will be dismissed as spin and bias. In such an environment, the argument goes, a genuinely informed citizenry is replaced with an anarchy of half-truths, misinformation, and propaganda.

Those arguing the other side tend to be many of the so-called disruptors — entrepreneurs engaged in building new digital-only news business models around aggregation, blogging, and low-cost newsgathering. One of those is Henry Blodget, founder of Business Insider.

There’s a big argument right now about what’s going on in the news business. There are two big different opinions. One is that news is dying. The world is going to hell in a hand basket. Who is going to do the hard reporting? Newspapers are caving in. How is the world going to police itself? That’s one. The other is what’s actually happening: The amount of news that’s being created has been increased by a hundredfold over the last five years. People are absolutely drowning in it. That’s the one I subscribe to.

Anybody with an opinion can tweet. They can blog, or they can go online…. In the old world through 1995, media organizations were the equivalent of a hydrant in the desert. They controlled the vital information flow. They had tremendous power because they were the gateway. Now, we are a hydrant in the ocean. Media organizations are often still coming at it from the point of view of “Wait, we get to choose what’s important. People should consume it because we say it’s important.” The point I’m making here is there is so much out there to consume right now that you actually have to build something that people like. People do not want to have to eat spinach because it’s good for them. They simply won’t. There are too many options.

On the national level, the owners of the big legacy news businesses have fought fiercely against the disruptors, often with the effect of a frustrated ocean swimmer flailing against a fierce rip current. They have waged legal battles over “fair use”; they have lobbied against anti-competitive behavior; and in many cases they have yielded to the current, creating substantial digital advertising businesses with hundreds of millions in revenue dollars of their own. And at least three big news players — The New York Times, The Wall Street Journal, and The Financial Times — all have built emerging models that rely substantially more on consumers paying for their digital products than merely relying on digital advertising. Other legacy news businesses — CNN, Fox News, CBS’s 60 Minutes to name three — also continue to operate with highly profitable margins.

Was there some “original sin” that unleashed this fierce tide of disruption — say, the decision by so many original news sites not to charge for content?
But with each digital click upward in Moore’s Law (processing power) and Metcalfe’s Law (network power) the tide of technological disruption has only risen, washing many of the legacy swimmers further out to sea, or at least diminishing their financial prowess. The summer of 2013 saw two particularly seminal events that highlight the acute situation legacy journalism companies find themselves in today: The Boston Globe sold for a mere $70 million to the owner of the Boston Red Sox (after once selling to The New York Times Co. for $1.1 billion), and The Washington Post Company stunned the journalism world by selling its iconic newspaper to one of those very names we mentioned at the outset: Amazon founder Jeff Bezos.

The choice of the riptide metaphor — or the rip current to be strictly accurate — is deliberate. The recommended survival technique against a rip current in the ocean is to quickly move sideways outside the current, but that’s been easier said than done in the news business, just as it is in the open sea. We chose the metaphor to represent what happened to the news business: When successful, pre-digital players who had learned to swim out to sea and return safely with confidence and regularity found themselves over time confronting a stronger and stronger force that made it more and more difficult to get back to shore. And just like a school of swimmers caught in a real riptide, even some of the best-prepared and forward-thinking media companies were swept away no matter how hard they tried to survive.

These exponentially increasing digital building blocks have enabled generation after generation of wunderkind engineers to develop fresher ways to deliver, receive, and share information, much of it directly in the wheelhouse of the old news businesses — not just news, but display advertising and distribution and, most devastating to many newspapers, classified advertising.

In some cases, a disruptive force has been aggregation (think The Huffington Post or Google News), while in others it has been disaggregation (Politico is only about politics; Cars.com is only about cars). In the case of classified advertising the disruption was almost just a stray bullet; programmer Craig Newmark basically set out seeking a way for people to share information about local events, not kill an industry. But none of these new content creators is really the big winner, in spite of their ability to chip away at consumers’ dependence on legacy media. They are mostly small players. It is the platform providers — Google, Facebook, and Twitter, in particular — with their engineering prowess, massive audiences, viral networks, deep data, and grip on the prime demographic targets for advertisers that have captured enormous shares of the revenue once flowing to the old media companies. (If you’ve never done it, try Google’s free Google Earth tool to view the company’s own sprawling California headquarters campus some time. Or better yet, take a look at the nearby facilities of Facebook, a company launched only in 2004 that took over the former headquarters campus of Sun Microsystems at what’s now called 1 Hacker Way, Menlo Park.) Also, as advertisers increasingly use automated “programmatic buying” to target specific audience segments on the web, general news providers are losing the core proposition of their traditional businesses — that is, serving as intermediaries between their audience and the advertisers wanting to sell them things.

One point that now seems clear: The news business had no shortage of visionaries who could imagine the future. As you will see over and over in this compilation of recollections going back many years, numerous editors and business executives in the employ of legacy news media companies set out to harness new technologies that would revolutionize the delivery of news. But (to get out of the sea for a moment) they were rewarded more as pioneers (who are often the first to perish) than as settlers (who eventually claim the new land).

And while it has been Moore’s and Metcalfe’s laws driving most of this change, perhaps it is another law, Amara’s, which best describes the results. That law states, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” Or, as Frank Rich put it in an April 2013 column for New York magazine: “We didn’t realize we were up against change so sweeping as the building of the transcontinental railroad or the invention of electricity [sic].”

Hyperbolic as that may sound, it probably isn’t an overstatement. And as such, it is a phenomenon worthy of a continual effort to understand its causes, its effects, and its possible outcomes. With that in mind, we created this oral history project — curated at Harvard by the Joan Shorenstein Center on the Press, Politics and Public Policy in conjunction with Nieman Journalism Lab — to document the experiences of a broad group of primary participants, some of whom were there at the beginning of the transformation (a time we judge to be some 35 years ago, long before the advent of the World Wide Web) and some of whom have only recently arrived but are profoundly affecting the force and direction of the current that is washing away the foundations of the legacy news media business.

Joining together as a team, we three Shorenstein Center Fellows decided to seek the personal recollections of a broad but select group of principals who faced the choices, made the decisions, placed the bets, and now have the benefit of hindsight as to how it could, or couldn’t, have played out differently. The original participants number more than 60 and could grow in time. In hierarchy, they range from the mighty: Eric Schmidt; to the defenders: Arthur Sulzberger, Steve Newhouse, Don Graham; to the disruptors: Arianna Huffington, Nick Denton, Jonah Peretti, Henry Blodget; to the artisans: Andrew Sullivan, Michael Kinsley; to the humbled: Jerry Levin, Tony Ridder; to the philosophical: Walter Isaacson, Steve Case, Gordon Crovitz; to the journalists-turned-capitalists: Mike Moritz, Will Hearst; to the scientists and academics: Tim Berners-Lee, Nicholas Negroponte. And many others in between: pioneers, martyrs, eyewitnesses, victims, conquerors. There were some players we didn’t approach, either to avoid duplication or because we simply lacked the time to reach everyone. We purposely chose to not interview the journalists and pundits who have covered this transformation over the years, although we believe this could be a worthy addition in the future.

We sought answers to many of the big questions. Was there some “original sin” that unleashed this fierce tide of disruption — say, the decision by so many original news sites not to charge for content? Or did the move by Reuters in 1994 to sell wire feeds to the upstart Yahoo — which would in turn give it away for free and soon become the world’s largest news service — create a current so strong that most traditional news providers forever lost the leverage to charge for digital content? Or was there some more primordial spark that guaranteed the inevitable disruption regardless — say the invention of URLs (universal resource locators) or html (hypertext markup language), which would allow any piece of content to be identified and transferred from anywhere in the world to anyone, anywhere on any Internet-connected device? Was the “news” ever really an unsubsidized business, or did it only appear so because it was conveniently bundled in newspapers and news magazines that offered numerous other amusements and services? Did the miscalculations of legacy publishing and broadcasting executives really change the course of history, or did they only matter on the margins? And, again, how serious is the threat of this transformation to the fundamentals of democracy? Is the net effect of the gains and losses wrought by digital media positive or negative for such traditional benefits of the news media as public service or civic welfare?

The answers and stories you can read and watch here are varied and, to us anyway, full of surprises. Like all oral histories, this compilation doesn’t represent cold, hard fact, but rather memory, with all its imperfection, psychological adjustment, and often, confusion. As such, the document as a whole is a Rashomon tale. Everyone may have seen the same sequence of events, but not necessarily in the same way. Many themes emerged repeatedly: The Innovator’s Dilemma, the cultural challenges of legacy companies, the mistiming of trying to capture the power of technological breakthroughs (often too early and sometimes too late), the tension between “paid vs. free” content, the failure of legacy media to appreciate the importance of engineering, the power of network effects if not the networks themselves. The interviewees expressed surprisingly little regret, or guilt, nor was there much finger pointing. But there are inevitable hints of nostalgia on the part of the old guard and fervor for creative destruction on the part of the new. On some questions, particularly the importance of institutional news media to democracy and the civic good, there is fierce disagreement.