Corporate America lost billions on the Net. That doesn't mean the medium has no value -- but the moguls remain clueless about where it lies.
You’d think that, in summer 2002, with the red ink of a thousand bankrupt dot-coms still bleeding across the stock charts, everyone could agree on what happened to the Internet. Big money poured in; a few got rich, many lost their shirts. Trend became gold rush became bubble. Pop — end of story. Now, everyone, back to work!
That, at any rate, is how much of the commercial media world views the Internet saga. New technology thing came along. Couldn’t figure it out. Seemed important. Threw a lot of money at it. Down a hole. It’s over now, thank God.
And that would be the story’s end, if it weren’t for one stubborn fact that refuses to vanish — instead it just sits there, center stage, after the curtain has dropped behind it, thumbing its nose at the booing crowd: The Internet itself hasn’t gone away. Hundreds of millions of people around the world continue to bend it to their own ends, in chaotic, unstable and unpredictable ways. As a generator of instant wealth, the Net may now be a big bust; as a generator of instant ideas, it keeps thrumming along.
This is a difficult fact for our media culture to digest. The media cover technology on a predictable cycle — a rhythm of hype and scorn that you can follow like clockwork each time a new wave of innovation sweeps the high-tech landscape. For nearly a decade, the Internet story has followed this arc; by all rights, it should be over by now.
According to “Bamboozled at the Revolution,” a new book chronicling “how big media lost billions in the battle for the Internet,” it is. After 300 grueling pages recording stunningly stupid corporate boardroom struggles, author John Motavalli concludes that “Web content is dead,” “digital dreams have been deferred for ‘broadband,’” and “AOL Time Warner will dominate.”
In the narrow circles of New York media mogul-dom that are Motavalli’s subject — the same people who blew those billions because they never figured out what the Internet is — his conclusions are the conventional wisdom (though AOL Time Warner continues to take a beating). With the Internet cycle over, who knows when the Next Big Thing to throw money at will come along? In the meantime, let’s play golf.
But the same people who got the Internet business so wrong got the Internet story wrong, too. IPOs and e-commerce and “network effect” growth rates were dazzling ephemera. But while magazine editors’ eyes were transfixed by the business’s convulsions, big things were happening under their noses: E-mail was transforming the workplace and the social landscape. Personal Web sites became “advertisements for myself” for the masses. “Communities of interest” — devotees of certain obscure handicrafts; critics of certain large companies; followers of certain public policy debates — formed and splintered and reformed in numbers too great to compile. New galaxies of communication coalesced, far off the familiar big-media grid.
It’s this story that’s addressed by “Small Pieces Loosely Joined” — an odd but wonderful series of essays by David Weinberger about how profoundly the Net is changing our lives. “Bamboozled at the Revolution” is trade-magazine reporting; “Small Pieces” is armchair philosophy. Still, you can learn far more about why and how the media lost their way online from Weinberger’s musings on the nature of Web reality than from Motavalli’s chronicles of boardroom chaos.
The crucial difference between these two books is that Weinberger focuses on people who actually use the Net — whereas Motavalli concentrates on people who didn’t, and probably still don’t.
To paraphrase James Carville: It’s the users, stupid!
“Bamboozled at the Revolution” promises to explain just how the lords of New York’s media universe got blindsided by the Internet. Its central focus is on the Time Warner empire, whose decade-long flirtation with the high-tech future never bore the fruit that chairman Gerald Levin envisioned in the early days of the corporation’s futile experiments with interactive television. While the book offers occasional side-trips to other companies, including Disney, Hachette Filipacchi and the TV networks, for Motavalli, Time Warner is where the action was — or, rather, wasn’t.
For those who participated in the madness of that time, “Bamboozled’s” review of the sorry histories of media misfires on the Net — iGuide, the New Century Network, MSN’s 1977 TV-style lunacy, Go, Snap, NBCi and of course Time Warner’s Pathfinder debacle — will offer moments of bitter nostalgia. Overconfident media bosses were unnerved by the Net and became “convinced that there was some kind of special mojo zeitgeist Internet know-how out there, if only they could find it.” One might feel sympathy with such confusion — but laughing feels better, and besides, virtually every one of them walked off with some sort of golden parachute.
“Bamboozled” doesn’t find much black comedy in the subject, alas. Motavalli asks us to hang out for an entire book with a bunch of executives who didn’t get the Net at first and never really caught on. That’s pointless and stultifying.
Motavalli’s East-Coast-centric account concentrates on the drabbest aspects of the Net revolution — the bureaucratic struggles within the Time Warner mothership, the “who reports to whom” battles that must have meant a lot to the participants at the time but that today read like dynastic struggles within a dead kingdom. A better writer might have transformed this material into a drama of corporate arrogance and folly — but Motavalli is the sort of author whose idea of color is to introduce each figure by briefly mentioning the hue of his or her hair.
In any case, the timing of news about AOL Time Warner has dealt a cruel blow to Motavalli’s account. “Bamboozled” concludes with AOL’s crown prince Robert Pittman triumphant — and the Time Warner leadership, who’d sold off their proud inheritance for a mess of new-media pottage, still wondering what hit them. In the intervening weeks, of course, AOL has been humbled, Pittman has resigned, and the Time Warner old guard is back in charge — with Don Logan, the veteran Time executive most famous in Internet circles for having said of Pathfinder in 1995 that it “gives a whole new meaning to the scientific term ‘black hole,’” now AOL’s overlord. The only part of Motavalli’s conclusion that still applies is that, any way you look at it, the big merger remains a disaster.
So we know who got bamboozled. But who did the bamboozling? There really are no culprits — aside from one sad account of software hustlers actually defrauding the folks at the Hollywood talent agency CAA. Mostly, the media barons bamboozled themselves; the fear of losing turf to a new generation of technology, and later, the lure of quick Internet riches, motivated them to make costly decisions out of ignorance — to invest in Web ventures that any observer who actually used the Internet could see were poorly conceived and doomed to fail.
And that, really, was the problem. In the mid-’90s, as the New York media world woke up to the Net’s rise, I always assumed that reports of media leaders’ online virginity were highly exaggerated. I mean, how hard was it to install an AOL disk? But Motavalli’s account leaves it quite clear that, yes, many of these guys who were getting their companies on the Net really hadn’t ever used it themselves.
“If you’re not an online user, it’s very difficult to understand the medium,” says Warner exec Jim Moloshok. Well, duh. But somehow this elementary principle eluded media leaders for years. In one embarrassing anecdote culled from an Industry Standard article about the aftermath of the winter 2000 Time Warner/AOL merger, Time Warner CFO Richard Bressler hears about plans to promote Time magazines on AOL and asks, “What are these pop-ups? How big are they? Can you send me some information on them?” AOL’s legendary deal-maker, David Colburn, responds, “Rich, why don’t you invest $21.95 in an AOL subscription and consider it due diligence?” Ouch.
What might have been due diligence for a corporate exec was already a way of life for tens of millions of people. Motavalli contrasts the New York media honchos’ cluelessness with the insight of AOL’s Ted Leonsis that, online, it’s “user experience” that counts. For AOL the key experience was getting new users online painlessly: It has always offered the simplest, most idiot-proof onramp to the Internet. AOL solved a vexing problem for millions of people; that, more than any “content strategy” or insight into online behavior, secured its dominance.
But once those people got online, they almost immediately started behaving in unpredictable ways. They didn’t wait for a media corporation to tell them what to do; they began writing pages and posting comments and building sites and contributing reviews and arguing and inventing identities. This unplanned behavior was made possible because of design decisions made by the engineers who established the Internet long before the media world ever heard of it. As Doc Searls summarizes these principles, “Nobody owns it; everyone can use it; anyone can improve it.”
This activity continues unabated, oblivious to the Web industry’s flameout. “We — the great mass of Web users — knew that there was more to the story than how the money was being made and, later, lost,” David Weinberger writes in “Small Pieces Loosely Joined.” Weinberger — one of the writers behind “The Cluetrain Manifesto” — tries to analyze the rest of the story: How the peculiar, unique traits of the Net are shaping a new kind of human discourse.
The argument is abstract — and, in places, abstruse — but at its heart is a simple insight: That most of what’s on the Web is there because someone is interested in it, cares about it passionately enough to put it in front of the rest of the world. And, Weinberger proposes, it’s precisely because the Web is powered by our interests, “the world’s collective passion,” that it is so distracting, so conducive to quick hops and interruptions. He doesn’t see this as necessarily bad: “Perhaps the Web isn’t shortening our attention span. Perhaps the world is just getting more interesting.”
That glass-half-full view may be a little too rosy, but it’s a provocative challenge to conventional wisdom. Similarly, Weinberger views the Web’s perennial technical problems and “under construction” imperfections as a healthy antidote to sterile professionalism and a key to the Web’s phenomenal fertility: “The designers weighed perfection against growth and creativity, and perfection lost. The Web is broken on purpose … Remove the controls and we’ll have to put up with a lot of broken links and awful information, but in return we’ll get a vibrant new world, accessible to everyone and constantly in the throes of self-invention.”
Weinberger’s Web is not just a giant marketplace or an “information resource” — it’s a social commons on which the interests of a mass of individuals are splayed in universally accessible detail and trumpeted in an effectively infinite array of personal voices. That concept is almost unfathomable to media pros whose business is “aggregating eyeballs” to sell to advertisers.
Everyone understands that the Web will not, as its most wild-eyed prophets might once have imagined, somehow preempt or eclipse the media of eyeballs and ads. TV is still there. Magazines aren’t going away. AOL Time Warner is still a vast company whose biggest profits come from “old” media.
But if media companies are going to continue to participate in the Web world — and they are — then they could learn a lot from Weinberger’s analysis. How does the tradition of professionally created journalism and entertainment fit into the dynamics of a wide-open Web? No one has a definitive answer to that question, and that includes us here at Salon. But “Sit around and wait for the Web to just go away” is one answer, still popular in some media circles, that we should rule out.
Motavalli, lamenting the post-bubble state of the industry, asks the quintessential media-insider question about the Web: “There are billions of Web sites, but how many of them matter?”
Excuse me — matter? To whom, exactly? To the Manhattan lunch crowd? To the Beltway lobbyist? To the person searching Google for “Anna Nicole Smith” — or “expansion joints”?
What Weinberger reminds us is that every Web site, every Internet posting matters to the person who created it — and maybe to that person’s circle of site visitors, whether they number 10 million or just 10. Sure, some 11-year-old’s book review on Amazon may be full of grammatical errors. OK, the world may not need any more Britney Spears fan sites. But lord, here’s the quark machine some imaginative scientists built in 1997! Here’s the complete lyrics of Bob Dylan! And here’s everything you ever wanted to know about repairing your old Volkswagen!
Individually, these contributions may be crude, untrustworthy, unnoteworthy. Collectively, they represent the largest and most widely accessible pool of information and entertainment in human history. And it’s still growing.
In this context, statements like “Web content is dead” or “AOL Time Warner will dominate” aren’t so much wrong as irrelevant. Web content is everywhere. No one can dominate the Internet. And the Web belongs to its users. That’s not the end of a story, it’s the beginning.
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