Breaking News. Alan Rusbridger

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      The Conversation

      At the end of one millennium and the beginning of the next, the media world was divided between those who still shrugged and those who were panicking.

      This thing had come from nowhere and now CEOs were demanding urgent primers on what the internet was and what could be done about it.

      The big consultancy firms did good business flying around the world telling media companies how to get with the act. In January 1999 two McKinsey principals, John Hagel and Marc Singer, published a book about ‘the merging role of the Infomediary’. ‘The truth is that very few of today’s companies have what it takes to become an infomediary,’ they warned. ‘Most lack either the customer relationships that will be necessary to get started or the risk-taking culture that will be necessary to succeed.’¹

      They foresaw a rapid period of alliance between internet-based and more traditional businesses – a marriage of speed-driven decision making and deep pockets. Success in future would depend on a business’s ability to capture information about customers and use this for commercial purposes. In the two years from early 1998 to February 2000 the internet sector earned over 1,000 per cent returns on its public equity.² By the end of 2000 those returns had completely disappeared, but for a while the world went a little bit mad.

      Our problem was, if anything, the reverse. We were spending modest amounts on the website and – probably – going too slowly rather than too quickly. The current rate of spend was around £3.8 million on staff costs by 2000/1, rising to £5.6 million in 2002. The total expenditure over the first five years of digital experimentation was around £18 million. Ian Katz, having launched the original Guardian Unlimited website and assembled a team of brilliant mavericks, was needed back on the paper. For the next few years the web operation was in the hands of two formidably talented and visionary journalists, Simon Waldman and then Emily Bell.³

      The business model was looking as though it would involve a combination of recruitment revenue; business-to-business advertising and sponsorship; the licensing or syndication of content; as well as traditional advertising. The forecast for annual revenues in two or three years’ time was £7.4 million. Peanuts compared with what we were taking in print – but then we were planning for a world in which print might itself be taking peanuts.

      Advertising was actually healthy enough at this stage, but we had launched a stand-alone website, Workthing, designed to replace, and even grow, the classified print revenues. It was promoted as a ‘complete employment network’ aimed at younger junior or middle managers. Everything in recruitment was moving online: digital was quicker and more comprehensive: the internet had better reach and could save 80 to 90 per cent of costs. The market was going to be worth $7 billion by 2005, and we wanted a large chunk of it.

      Consultants crawled all over the projections and estimated that by March 2005 we could be making anything between £8 and £30 million a year in profits – but only after sinking £30 million of losses to get it airborne. Sales in 2000/1 were, at £5 million, still modest – but the team had high hopes of building that to more than £60 million within a few years.

      Reach before revenue.

      We were in the green bubble all right. The newspaper division would go on losing money – but, as the other parts of the organisation were highly profitable, this level of investment felt manageable to the Scott Trust. Long term meant long term. We could be patient.

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      Our investment on the main Guardian website was still modest – a drop in the water compared to frenzied activity over at News International. Around mid-1999, according to a semi-authorised book⁴ about Murdoch’s business at this point by Wendy Goldman Rohm, he was convinced by his sons that he was ‘missing the internet boat’ and, within nine months, had allocated more than $2 billion in resources to online projects. ‘The market was going wild, there was money to be made and he decided to jump on the bandwagon.’

      While on honeymoon in Tuscany with his second wife, Wendi, he and some executives (evidently joining the honeymoon) planned a new UK internet division, to be called News Network, according to Rohm. This would be the digital arm of News International, the UK newspaper division which published the Times, Sunday Times, News of the World and Sun.

      But the bubble in internet ventures was about to burst in the summer of 2000 and – less than a year after announcing he’d ‘got it’ – Murdoch ordered a retreat. According to Rohm, in a Los Angeles bar in July 2000 his top internet gurus were told there was to be no more spending on internet businesses. A few months later News Corp formally announced it was folding all its online businesses that had operated under News Digital Media back into their respective company divisions.⁵

      Murdoch was not alone in struggling to make quick returns on digital investments. Nearly everything was failing. In September 2000 everyone was trying to create women’s portals with names like Handbag, iCircle, Beme and uk.women.com. They all petered out. Emap, a trade magazine company, splashed out £50 million, only to announce a wave of site closures as they failed to work. Pearson were scaling back after lavishing more than £100 million in investment on the FT (£30 million on marketing alone). Trinity Mirror decided £10 million a year was more appropriate than the £42 million pre-bubble rate of spend. Associated had launched Charlotte Street, a ‘women’s portal’ in October 1999 and then relaunched it a year later, concentrating on 29-to 40-year-olds. It lasted another year before being quietly put out of its misery.

      

      Success in this new world was proving even more uncertain and expensive than anyone had imagined.

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      What was a newspaper becoming? The old newspaper model could be sketched as a tablet of stone – something handed down from on high. Our talented Polish-born illustrator Andre Krauze once drew the old world of newspaper production as journalists throwing newspapers over a high wall at readers on the other side.

      Newspapers encouraged letters from readers. Hundreds would arrive every day – a tiny number to be selected for publication by the letters editor. As with nearly everything in the old world, we were in control. Who gets a voice, who doesn’t? We chose.

      But this new world in which we were now playing didn’t feel like a tablet of stone. It became fashionable to start using the term ‘a conversation’. It wasn’t really, but there was much more two-way traffic. An early idea was to set up talkboards where the readers could congregate virtually and chat. They are, of course, ubiquitous now but were then in their infancy: it took a while for us to get our heads around them. It began around 1999, with a version of what was then a football bulletin board, and grew rapidly.

      We were – mostly – pleased to host them. They were very lightly moderated and the user interface was rudimentary. Occasionally the users would rebel if we changed something in a way not to their taste, and there would be periodic desertions: it was relatively easy for a number of disgruntled users to clone the site and take it elsewhere – an early reminder, if we needed one, that we were no longer in control.

      Over time readers started their own threads on multiple issues a day – including media, film, books, international news. The best and worst of humanity was on display. At their most unpleasant they were scrappy, almost wild – with bullying, stalking, trolling and name-calling. Some of them were, in the words of one poster, ‘utterly batshit’. The Israel/Palestine discussions were good ones to steer clear of if looking for rational, calm СКАЧАТЬ