[IP] Mike Malone on Forbes' anti-blog cover
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From: Arik Hesseldahl <ahess247@xxxxxxxxx>
Date: November 3, 2005 4:26:26 PM EST
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Subject: Mike Malone on Forbes' anti-blog cover
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for IP if you like.http://abcnews.go.com/Business/print?id=750595
Silicon Insider: Forbes Fumbles the BlogosphereDoes an Attack on
Bloggers Signal the Dawn of Blogosphere-Dominant Media?Commentary
By MICHAEL S. MALONE
Nov. 3, 2005 — - It's déjà vu all over again.
I was halfway through the blogosphere summit in Manhattan last week,
running back and forth to the podium introducing speakers, when it
suddenly hit me: I've seen all of this before. The dedicated
entrepreneurs, the explosion of new words and terms, loud
disagreements on what it all means, the venture capitalists watching
and waiting for the first business to break out before they break in
with bags of cash.
It was in 1995, at the birth of the dot-com boom. And I had seen
other versions of the same thing before that: in 1980 at the start of
the PC boom, and just before that, during the birth of the video game
industry. You only get a few of these epiphanies in your career, and
usually you don't recognize them when they happen. But I've lived in
Silicon Valley and attended enough boom births to see this for what
it is.
The numbers should tell you all you need to know: There are an
estimated 20 million bloggers out there. Now, we can assume that 90
percent, even 99 percent, are largely novelties put up by folks who
stick their Web journals up for a few weeks then move on to something
else, perhaps adding a new entry every month or two.
But even in the most pessimistic scenario, that still leaves 200,000
serious bloggers out there, scattered throughout the world, talking
about everything under the sun, from politics to pet care, shoes to
spelunking. That's 200,000 entrepreneurial startups, 50 times that of
the number of new dot-coms a decade ago. That's more than enough
critical mass to kick off a boom.
Not a Money-Maker -- Yet
It can be argued that most of these bloggers aren't making much
money. But then, they don't have much overhead either -- and they are
slowly groping their way toward workable revenue models. Once they
do, the venture capital industry is ready to swoop in. With the
Huffington Post and the soon-to-be-announced Pajamas Media, we are
also seeing the birth of the first larger business structures in the
blogosphere -- and the first serious interest by major advertisers.
That will be the key: when General Motors takes out an ad on
Instapundit, the blogosphere will ignite so fast that it will make
the dot-com buildup seem like slow motion.
And that is exactly what my Valleyite's sixth sense was picking up at
the summit last week. I heard it from the bloggers who are organizing
into real businesses, from mainstream media executives who talked
about forming partnerships with bloggers or contracting them as vast
armies of stringers and freelancers, and from investors and ad agency
owners who are waiting for the first blog-Google or blog-eBay or blog-
Amazon to rise to the surface.
But the real confirmation of the importance of what I had just seen
came after I left the hall.
Forbes is the Anti-Indicator
First, a quick surf of the Web showed me a blogosphere on fire --
with excitement over the birth of Pajamas Media, consumed with
jealously over not being part of it, or pre-emptively attacking it
with near-incoherence for alleged biases, incompetence or abuse of
power. Not bad for an enterprise that doesn't even formally exist
yet. Whenever a new idea in high-tech attracts this much adulation
and calumny, you can be sure that it is on to something -- and that
everyone doing the attacking is secretly plotting how to compete with
it.
But the real confirmation that the game is afoot in the blogosphere
came from a Forbes magazine cover story that literally hit the stands
while we were in the summit. I'd noticed that one of the panelists,
Paul Maidment, head of Forbes.com, was unusually circumspect with the
crowd about where he worked. After I saw the magazine, I understood why.
As I've noted in this column many times over the years, I used to run
Forbes' technology magazine, Forbes ASAP, which was based in Silicon
Valley. ASAP was probably the largest circulation technology-business
magazine in the world. I like to think it was because of the good
writing and editing, but the truth is that we were respected then
(and remembered now) because we understood technology, and we got the
big stuff right.
By comparison, when it comes to technology, the mother ship, Forbes
magazine, NEVER, EVER gets the big stuff right. It is, in fact, one
of the best technology counter-indicators I know. If you want to
learn about mutual funds or the annual incomes of dead celebrities,
Forbes is the place to go. But when it comes to tech, read Fortune
(or, if you can stay awake, Business Week) because if Forbes says
something ain't so, by God it certainly is.
Remember the story about how Mike Spindler was brilliantly turning
around Apple? That one was legendary. Or how about the cover story on
the genius of Carly Fiorina? You may not remember it, but I assure
you that thousands of HPers still do.
We used to wince over at ASAP every time Forbes would attempt a major
technology story -- usually because it meant we would have to spend
the next fortnight explaining to all of our Valley sources and
contacts that we had nothing to do with the story, that it was the
"folks back in New York" (while rolling our eyes), etc. It would take
months to restore our credibility.
Missing the Dot-com Boom
Even as we at ASAP (and our peers in the tech media) were cheering
the birth of the dot-com boom and the hundreds of tycoons it created,
Forbes was advising its readers to stick to "value investing" or some
such phrase, which meant essentially: put all of your money in
Consolidated Amalgamates or Amalgamated Consolidates, and sit back
and watch your savings grow at a thrilling 5 percent per year.
How many billions did that cost Forbes readers?
Then, five years later, when we at ASAP saw the bubble was about to
burst and put a guillotine on our cover, Forbes was finally getting
traction on cheering the New Visionaries. How many billions did that
cost Forbes readers? Toss in convincing George Gilder that he was not
only a technology visionary but stock pick guru, and between 1995 and
2001 Forbes achieved a kind of personal portfolio disaster hat trick.
At about the end of that period, a few months before Forbes killed
ASAP because tech advertising was dead (uhm, hefted a copy of Wired
or Business 2.0 lately?), I agreed, against my wishes, to appear on
the magazine's TV show, "Forbes on Fox." I had just written in my
magazine that, even as we were bottoming out on the dot-com crash,
tech was already positioning itself for a huge new boom, one that
would extend well into the decade; and that, as part of this boom, e-
commerce would be bigger and more important than ever.
I was instantly attacked by the senior Forbes editors. How dare I
suggest that tech could come back? And how could I possibly say that
the surviving dot-coms would be bigger than ever? Or that Silicon
Valley would come back to even greater prosperity?
My reply, to paraphrase, was that "You guys completely missed the
last boom, so why should anybody listen to you when it comes to
predicting the next one?"
Silence. I was never invited back.
Meanwhile, online business dominates retail in the U.S., and that
little Silicon Valley company called Google rules the world.
Predicting the Bust of the Bloggers
So, needless to say, seeing the words "Forbes" and "tech" anywhere
near each other usually makes my teeth chatter. Still, last Thursday
at the airport, when I at last looked at the new Forbes cover, I
could only laugh. This time, Forbes may have set a new high water
mark: It actually wrote off a new industry on the very day it was born.
The piece, "The Attack of the Blogs," is a strange, sour essay by
Daniel Lyons whose theme -- captured well in the subhead -- is: "Web
logs are the prized platform of an on-line lynch mob spouting liberty
but spewing lies, libel and invective ..." What follows is an
apparent attempt to tar all of those 20 million bloggers out there
with the scummy practices of a few dozen renegades. The overall
message is (picture an old guy at a private club rattling his old-
fashioned invective and shouting): "Of course I believe in free
speech and all that, but this kind of thing must be stopped!"
There is already a hilarious parody of Lyons' piece circling the
blogosphere in which an 18th-century essayist complains that
pervasive printing presses have led to the rise of pamphleteers,
whose scurrilous antics have prevented King George III from raising
taxes to finance his "benevolent aims" for the colonies.
That's pretty accurate, actually. To its eternal credit, Forbes
really does want everybody to become wealthy. But until they do, the
little people need to know their place. All of this entrepreneurship
business only creates chaos, frightens the horses, and threatens the
well-being of the Right Kind of People.
Meanwhile, given the magazine's record with tech, it is interesting
to speculate: Which is worse for a technology company -- to be
attacked by bloggers or celebrated by Forbes?
Let me make a prediction. Five years from now, the blogosphere will
have developed into a powerful economic engine that has all but
driven newspapers into oblivion, has morphed (thanks to cell phone
cameras) into a video medium that challenges television news, and has
created a whole new group of major companies and media superstars.
Billions of dollars will be made by those prescient enough to either
get on board or invest in these companies. At this point, the
industry will then undergo its first shakeout, with the loss of
perhaps several million blogs -- though the overall industry will
continue to grow at a steady pace.
And, at about that moment, Forbes will announce that the blogosphere
is the Next Big Thing for investors. Maybe they'll even invite me
back to Forbes on Fox.
This work is the opinion of the columnist and in no way reflects the
opinion of ABC News.
Michael S. Malone, once called "the Boswell of Silicon Valley," most
recently was editor at large of Forbes ASAP magazine. He has covered
Silicon Valley and high-tech for more than 20 years, beginning with
the San Jose Mercury-News as the nation's first daily high-tech
reporter. His articles and editorials have appeared in such
publications as The Wall Street Journal, The Economist and Fortune,
and for two years he was a columnist for The New York Times. He has
hosted two national PBS shows: "Malone," a half-hour interview
program that ran for nine years; and a 16-part interview series in
2001 called "Betting It All: The Entrepreneurs." Malone is best known
as the author of a dozen books: his latest, a collection of his best
newspaper and magazine writings, is called "The Valley of Heart's
Delight" (Wiley).
Copyright © 2005 ABC News Internet Ventures
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