From journalist to media target

When the dot.com bubble burst, and its biggest chronicler — The Industry Standard — collapsed, the press came calling

by Jonathan Weber

I don’t always answer my cell phone, and as I drove down Geary Street in San Francisco one Wednesday afternoon last August, I was especially eager not to talk to anyone. But I was expecting a personal call so I picked up the phone, only to be greeted by the one person in the world I least wanted to hear from — Matt Rose of The Wall Street Journal.

I braced for what I knew was coming; Matt had heard a rumor that my magazine, The Industry Standard, was going out of business, and he wanted to know if it was true.

It was indeed true. Just the day before, after months of acrimonious efforts to agree on a new financing plan for our once-high-flying business weekly, the owners had — to my great surprise — decided to throw in the towel. The timing could not have been worse, as the entire company was on a mandatory vacation that week. In a fit of stupidity, we had decided to try to sit on the news until the following Monday so that we could tell the staff in person.

Now the game was up, and all I could do was buy time. I told Matt that I couldn’t discuss the situation or comment in any way. At the same time, I tried to determine if he knew enough to run a story in the next day’s paper. It was late in the day in New York, close to the Journal’s deadline, and Matt indicated that he wasn’t in a position to file that night. As I hung up, I prayed that no one else had the story. Then I called Alissa Neil, our outstanding public relations director, to figure out a plan.

We knew we had only a day, at best, before the news would be out, and we desperately wanted the staff to hear it from us and not from the press. But if we started calling staffers at home right away, that would make it more likely that the news would break on the Internet that night. We decided to call as many people as we could the next morning and hope that it would hold until Matt, a good reporter, could break it on Friday in the Journal.

In the short but eventful life of The Industry Standard, I’d grown accustomed to this role-reversal. I’d been a reporter and editor my whole career, and as the editor in chief of the magazine, I was first and foremost a journalist — and we took pride in being the toughest, most skeptical, most hard-nosed journalists in what was then known as the “New Economy.” But as the top editor, co-founder and de facto number-two person at the company, I was also a business executive and one of the main spokesmen not only for the magazine, but for the larger entity known as Standard Media International.

And the Standard — first because of our unprecedented success, and then because of our dramatic collapse — turned out to be a pretty big story.

The experience of being on the receiving end of journalism was at once entertaining and ego-gratifying, frustrating and sometimes infuriating. As a veteran journalist, I figured I knew all the tricks, and thus would be able to handle the press more shrewdly than most. I knew there were limits on the degree to which the coverage could really be “managed,” but I was also very aware of the impact the media could have on our fortunes, and I was determined to make the best of it.

From the very start we were pretty good at creating buzz, thanks to the charisma of our founder and CEO John Battelle, and the fact that we were in part about the future of the media itself. Though the launch of the magazine in 1998 was greeted with a great deal of skepticism, we were happy that people were taking notice at all.

When we hit our stride in early 1999, we began to get some positive coverage, which in turn helped us do even better. Pretty soon we were anointed the hot new magazine, the media poster-kids for the Internet revolution. Cheery profiles appeared in numerous national publications, including Time and Business Week. Battelle and I were frequently quoted as authorities on the impact of technology and the Internet. We had high-profile conferences, a busy Web site, unique and popular e-mail newsletters, and a vision for how we were going to create a new kind of media company.

There were of course occasional snipes, and reporters who didn’t get it, but mostly the news about The Standard was all good. And why not? We had a great story to tell, and we had the facts to back it up: soaring revenues, must-read status in the world’s hottest industries, increasing success in recruiting top talent and producing top-notch stories. When the worst thing someone can write about you is that you invited too many people to your anniversary party and thus had to make some guests wait outside (lesson: don’t ever make a reporter wait outside) you know you’re in pretty good shape.

We were fully aware of the fact that we were becoming a symbol, a bellwether, a marker of where this whole Internet thing was going. The media needs symbols like that, and we were happy to oblige. We also knew that being a symbol can be dangerous, and that we’d probably get more than our share of arrows when the air inevitably came out of the dot-com bubble. But just as we anticipated the Internet bust without anticipating its scale or ferocity, we anticipated the media backlash without understanding just how painful and damaging it would be.

The shift began when we had to shut down the spin-off magazine Grok in the fall of 2000, about six months after the stock market started to crumble, Grok was a good read but definitely one of our dumber business concepts, and its closing was seen as the first sign that all was not well at Standard Media International. By this time we were prominent on the radar screens of media beat reporters at the Journal, The New York Times, The New York Daily News, the New York Post, the San Francisco Chronicle, the San Jose Mercury, the wire services and all the media trades, and they began to thrill at the scent of trouble. The fact that we were so celebrated made any story about problems all that much more enticing.

The real torture began in early 2001, when falling revenues forced us to begin cutting the staff. There is really no good way to handle news of a layoff. As a private company we were under no obligation to announce them, but of course journalists are the world’s biggest gossips so the news was certain to get out there. If you announce them you call attention to layoffs. If you don’t, you stand accused of trying to hide something.

Another thing: the mechanics of laying people off are time-consuming. Once you decide to lay off a certain number of people you then have to decide who, exactly. Once you’ve decided who, you have to decide how you’re going to tell them. You have to get checks cut, arrange outplacement services, train the managers involved and figure out a way to reassure the people who are not losing their jobs.

What this meant in practice was that every time we had a layoff — and because of the dramatic and unprecedented speed of the fall-off in our business, we had to do it four times — word would leak out that something was about to happen before it actually happened. Nothing will send a staff into a panic like a story on CNN saying that a bunch of people are going to be laid off a week from Thursday. I couldn’t deny the story if it was true, but I wouldn’t do anyone any favors by saying that “yes, indeed, something terrible is going to happen in the near future and I’ll get back to you later with the details.”

As a journalist, I was constitutionally in favor of leaks. But as a manager, the leaks drove me insane. I spent enormous amounts of time responding to bits and pieces of information — sometimes accurate, sometimes not — that appeared in the press. I held a staff meeting one day to talk about what was happening with the business, and barely two hours later things I said at the meeting were quoted, verbatim, in The Wall Street Journal’s online edition. I had always tried to be very open with information, but it’s one thing to be open with employees and quite another to be open to the world. Suddenly, I couldn’t talk to staff anymore or send around an email for fear of seeing my words in print. The media attention forced me to be more secretive at precisely the time people most needed information.

I was personally very hurt by the leaks. We had a great group of people who liked and respected each other very much, and who generally saw themselves as part of a team; I couldn’t understand why someone would intentionally do things that would be damaging to the organization. The leaks could be damaging indeed: the media business is very perception-driven, and advertisers don’t want to be associated with a publication that is perceived to be failing.

Every time a negative story appeared and as the spring wore on the stories were not only speculating about layoffs, but raising questions about a possible sale of the company and generally questioning our financial viability — the sales team would be forced into a frantic round of damage control. Largely because of the Internet and sites like Jim Romenesko’s Media News, any story published anywhere was immediately seen by everyone.

I thought hard about who might be the source of the leaks, partly because I was getting a lot of heat from managers in other departments who were convinced — probably correctly — that the leaks were coming from the editorial staff. I had a few hunches, but how to find out for sure? Should we start reading email, or going through phone logs? We never seriously considered any of this, but I could now see how well-intentioned managers might, in the heat of the moment, be drawn to unsavory actions.

As the business continued to deteriorate through the spring of 2001 — we had to shut down the European edition, and our once-phonebook-sized U.S. magazine was beginning to look more like a pamphlet — the press really started to dig in. We were no longer a symbol of the the promise of the new economy. We became a symbol of the disastrous collapse not just of the dot-coms, but of much of the technology and telecommunications industries. Now no piece of bad news seemed too small. I was fielding calls from major newspapers about rumors that two people had been fired in the information and technology department. Could this possibly be news?

On the whole, of course, the bad press was on the mark; the company was in fact in deep trouble. But as the feeding frenzy gained momentum, stuff that was patently ridiculous began to appear. One day there was a report in a publication called The Daily Deal that we were discussing a merger with a rival publication. This was totally untrue, and the reporter hadn’t even bothered to call anyone at The Standard. Still, I had to spend the better part of two days assuring the staff and the media horde that there was nothing to it. One reporter demanded to know: “Well, if there’s nothing to it, why is it on the front page of The Daily Deal?” Other publications did full-blown analyses of the non-event, with the excuse that even if it wasn’t true it could be interesting to consider what such a thing might mean.

While I had friendly relationships with many of the reporters who covered us, a certain amount of gratuitous hostility began to emerge as well. When I insisted to one reporter that we had no plans for layoffs beyond the ones we had already announced, she snarled: “Can you guarantee me that there aren’t going to be any additional layoffs?” I told her to go ask her own boss for such a guarantee.

The power of Romenesko’s site especially came home to me one day when The New York Times paraphrased me as saying that “The Standard was in crisis, but not dead yet.” I had said nothing of the kind. In fact, I hadn’t even spoken to the reporter, only sent a short e-mail, and thus I even had proof that I’d said nothing of the kind. The comment was in about the 15th graph of a relatively minor story that was mostly about a golf magazine, and it would have passed largely unnoticed were it not for the Romenesko headline: “Industry Standard chief says magazine is in crisis,” or something close to that.

This incident also provided a rude reminder of how people tend to get treated when they are wronged by the press. Our majority owner was very upset by my alleged comment in the Times, so I decided I needed to seek a formal correction. Since the e-mail spoke for itself — and since I knew the relevant New York Times editor personally — I assumed this would be no problem. Wrong. He said the reporter had said that I had said something like that in previous conversations and thus they weren’t going to do anything. When I protested that I hadn’t spoken to this reporter in at least a month, he said he would look into it again, and came back with the same answer. If this was how The Times treated me, a peer, I shuddered to think how they would react to a powerless stranger.

Even if no one had written a word about us, these would have been very difficult times for me and everyone else at The Standard. But the public attention to our woes certainly made matters worse, both for me personally and for the business. I tried to be philosophical about it — I certainly understood what was going on and why, and it really wasn’t the media’s fault that our business was in trouble. But when the press screwed up, or spun something in a way that I didn’t think was fair, it still made me furious. This was schadenfreude, big-time. We had the gall to challenge the established media, poach reporters and editors, pay big salaries and swagger around like we were smarter than everyone else. Now we were going to be punished.

I knew the news of our bankruptcy would be a big story, but the amount of attention it received still came as a shock. Less than 24 hours after my conversation with Matt Rose, the trade publication Advertising Age reported on its Web site that there were rumors we were going to be shut down. Around the same time the Journal, unable to hold its exclusive for the print edition, published its story online. Within minutes my phone was ringing off the hook. Soon there were reporters and TV crews congregating outside the office.

There were a lot of sensitive issues around some basic questions. How could we have gone from smash success to bankruptcy in less than a year? Who was to blame? I wasn’t entirely sure how I would respond; it’s noble to take responsibility, and yet there were many people — most of them out of the spotlight — who were at fault. Fortunately, for that day at least, most reporters weren’t going too deep on this. We were a symbol of the Internet bust, and thus our failure was a result — and an indicator — of just how complete a bust it was. If you ever wondered whether this new economy thing was all hype, well, what more evidence do you need? The voice of the new economy itself was heading for Chapter 11!

The stories were a mixed bag, inevitably, but most of the major publications got most of it right (Matt Rose’s story was probably the best). I could take some solace from the fact that many of the pieces talked about how we were known for our high-quality journalism and thus it was doubly shocking that we were going down. A couple of days later the Times ran an editorial, which captured our rise and fall extraordinarily well, and even complimented me by name. The truth is that we probably got more attention in death than we deserved — partly because it was a slow summer news day, but because we were such a convenient symbol. But it still made us feel better.

It wasn’t all over yet, though. Some stories were going to dig deeper, and assign blame. The fact was that we had made many mistakes as managers, but the owners of the company had screwed up even worse and driven us out of business when it wasn’t really necessary. A furious round of public finger-pointing broke out, and the emotions of the moment made it hard to keep a level head. By late August there were three major pieces in the works — one by The Washington Post, one by the Journal, and one by the media Web site Inside.com — and I was determined that Battelle and I were not going to be made the scapegoats.

I did feel that a lot of what was written at the end was shallow and simplistic, reliant on easy symbolism — free-wheeling dot-com kids get their comeuppance — rather than sophisticated, in-depth reporting. The Washington Post piece — written by a reporter who not only had never read The Standard but had never even heard of it before the bankruptcy — was the classic of this breed: clueless about the business issues, riddled with mistakes, and yet ready to make all kinds of judgments. The Inside.com piece (also published in the trade magazine Folio) was probably the best of the postmortems — good enough that when it beat the Journal to the punch, the Jour-nal story was killed.

Through all of this I always tried to remind myself not to be thin-skinned, to take the good with the bad, to remember that reporters were doing their jobs and that some were going to be better than others.

I didn’t live up to this as well as I’d have hoped. I know perfectly well that subjects of stories always think that what’s written about them is shallow and simplistic. It’s sometimes the job of the media to simplify, and even to create symbolic representations of larger issues. In many ways the Standard got a great ride from the press, and I know I got mad about things that were published far more often than I should have. But it was certainly instructive to be on the other side of the fence, to feel the impact of the way the press goes about its business. If nothing else it will, I hope, make me a better journalist.