Please join us at BU on Monday, October 26 at 5:30PM for a discussion of the Riptide project, including new interviews conducted by John Geddes, Ex-Managing Editor at The New York Times

We will hold two panels: One with the authors of the project; the other with four of the journalists who covered the changing business model of journalism over 30 years.

The Authors: John Geddes, John Huey, Martin Nisenholtz and Paul Sagan with Moderator Maria Barinska

The Journalists: Hiawatha Bray, Denise Caruso, Philip Elmer-DeWitt and John Markoff with Moderator John Geddes.

Location: The Trustee Ballroom, 1 Silber Way, 9th Floor

Reception immediately following at 7PM

Riptide is an oral history of the epic collision between journalism and digital technology, 1980 to the present.

Nicholas Carlson’s piece in The New York Times Magazine this week attempts to answer the question: “What happened when Marissa Mayer tried to be Steve Jobs?” It’s a blistering critique, characterizing Mayer as a kind of Marie Antoinette among the digerati.

The story of Yahoo is an important one in the epic collision between journalism and the Internet. After all, Yahoo was really the first major disruptor, having licensed the Reuters newswire and created a free, fast, updated, Internet-friendly news service even before The New York Times started nytimes.com. This set the stage for free news online. This story is told well by three Riptide interviewees, each of whom played a material role in Yahoo’s early years: Art Kern (an early Yahoo director); Mike Moritz (an early Yahoo investor); and David Graves, a former Reuters executive who helped broker the Yahoo News deal. For anyone interested in Yahoo, all of these interviews are worth a read.

Kern, in particular, identifies the central challenge that the company faced soon after it was founded:

…this question of, is Yahoo a media company or is it a technology company, was both the great opportunity for Yahoo and also it’s greatest millstone. By having to be both for so long, it slowed the company down in many, many, ways and we can come back to that. That was a central problem for the company. So, in any event, on the human being side no one intended for Yahoo to originate content. We were an aggregator. We saw ourselves as the place to kind of get this chaotic Wild West web thing organized for you.

This sums-up almost perfectly the central dilemma in news today: Journalism companies have historically viewed technology in a supporting role. Journalists are the stars. New age news companies like Buzzfeed and Vox elevate technology into a kind of co-starring (or, in some cases, even starring) status described well by Jonathan Glick in his very good ReCode post, The Rise of The Platisher. Typically, the purpose of this technology integration is to align with the dominant distribution platforms of our era: namely, Google and Facebook. But the result of this confluence has not been better journalism; on the contrary, it has been mostly viral nonsense.

Jonah Peretti, the king of this new realm, says something very interesting about Mayer’s schizoid tech/media strategy in the Carlson piece:

“I just think it is a strategic mistake to take on big media where they are strongest,” Jonah Peretti, the C.E.O. of Buzzfeed, wrote me in an email earlier this year, referring to her focus on stars, scripted shows and glossy content.

This begs the critical question: Can Yahoo be turned into the world’s largest Platisher? Because the clear implication of what Peretti writes is to take-on “big media” where they are weakest — and that’s in the tight integration of media and technology, not in the kind of dual personality that Mayer has crafted. Today, Yahoo is neither fish nor fowl. Let’s not forget that Peretti’s theory of quality journalism – a kind of subsidy model where the mass light pays for the quality heavy – is at the heart of his ambition. Couldn’t that work perfectly at Yahoo?

Cynics might argue that Jonah Peretti yearns to be David Karp. I disagree. I think his ambitions are much bigger. Regardless, the question remains whether Jonah Peretti might wind-up as Marissa Mayer’s Arianna Huffington. Ditch the two Google people, relocate the business to New York, put Huffington and Paretti back together again, move Eric Hippeau into the CEO seat and assign Ken Lerer to the lead director role. Okay, just kidding.

In truth, I think the Carlson article ended in exactly the right place. Quoting N.Y.U Professor Aswath Damodaran, Carlson summarizes as follows:

“Sometimes,” Damodaran told me, “companies have to act their age.” For Yahoo, embracing its maturity means settling for a business that earns close to $1 billion in profit every year. It has outlasted other formerly iconic Internet portals, from AltaVista to Excite, and even dwarfs more recent web sensations like Myspace and Ask.com. For a company that started out as “Jerry and David’s Guide to the World Wide Web,” that’s not a bad way to grow old.

Yahoo was the original news disruptor. Clearly, in the end, it will not be its savior.

Early on in the Riptide project I suggested to John Huey and Paul Sagan that we develop a “sidebar” in the area of Business Information Services. My thought was that newspapers were among the early pioneers in this highly technical area – after all, The New York Times Information Bank was the precursor to the Nexis information service. My theory was simple: Had newspapers pursued this area in earnest, they might have accomplished two things: First, they might have developed more diversified revenue streams with which to support the journalism; and, second, they would have had the technical competencies inside of their companies to innovate in the search area. We started down this road by interviewing Bob November, the executive who lead The Times’s efforts in business information services in the 1980s. But with everything else we had to do, this area of the history was never fully explored. Nonetheless, November reminds us of something very important about The Times Company:

We were the first aggregator. Actually, with the information bank, we were the first people to think of doing electronic delivery of news information. But it was not full text. It was hard because the world was not very much attuned to getting electronic information. So we had the training and the technology.

Of course, As November reminds us, the business was sold off to Meade way before the web even existed. Meade was later sold to Reed Elsevier:

When Walt Mattson became the Chief Operating Officer, he decided that we would not be in the information business. We would be in the newspaper business. Therefore, we would make a deal with Meade. They would then offer the New York Times in full text.

Don Graham and Chris Schroeder also touch briefly on the Washington Post’s efforts with their Legi-Slate division (sold in 1999), but the full history goes unreported. Ditto with Gordon Crovitz and his mention of Dow Jones Information Retrieval and Telerate. In the end, the question of whether the pioneering work in this area could have lead to businesses that would have helped subsidize quality journalism is never answered — instead, these businesses are now run by companies like Reed Elsevier or Wolters Kluwer. Now, fast forward 18 months… About two weeks ago, an email came from an ex-HR executive at Knight-Ridder named Steven Stein. Stein, it seems, had a very similar instinct to mine. It is captured in his email, which he’s given me permission to reproduce here:

I am writing to add some additional texture and information to your Riptide project pertaining specifically to the Knight Ridder (KR) company history. I have watched many of the interviews and read the transcripts of the KR interviews and there is one significant and noteworthy gap in the history that is not referenced in the interviews with Tony Ridder, Cathy Yates and Roger Fidler.

As background, I worked for Knight Ridder (KR) from 1983 to 2005, about a year before KR was sold to McClatchy. I was VP/Human Resources at the corporate office in San Jose when I left the company. During my KR career I served in a variety of senior human resources roles in both the corporate office and in what we called the Business Information Services (BIS) division. The BIS division was based in New York City and was a significant operating group that Tony Ridder eventually sold for about $1 billion. Tony then used those proceeds to purchase MORE newspapers (Kansas City, Forth Worth, etc.) during the 1990s when Tony became CEO after Jim Batten’s untimely death. I was part of many strategic planning sessions over the years and was part of the corporate move from Miami to San Jose that Tony referenced in his interview. I also worked in New York City for KR for several years in the BIS group as head of HR. I worked closely with Tony, Cathy and Roger over the years. More on this BIS division below.

In the KR interviews you have conducted I did not see any mention of the BIS group and the role this division played in the KR history. Briefly, the creation of the BIS group was the vision of Jim Batten who had a clear view way back in the early 1980s (when he hired Roger Fidler) that the future of traditional print was going to change dramatically as technological advances evolved. Over several years, through acquisitions and internal growth, the BIS division grew to a few thousand people and reached a valuation of about $1 billion dollars, collectively. It was not highly profitable, but it was growing and employed the kinds of people — engineers, programmers, digital journalists, entrepreneurs, database technologists, early-stage Internet experts, etc. — who were few and far between in the newspapers. It also was testing — and using — some of the new business models that were emerging such as paying for information rather than using advertising supported models.

At the time of the sale, the BIS division — which was a global business — contained a few distinct operating and “branded” companies: (1) Dialog Information Services (based in Palo Alto, CA) which was a proprietary information company that sold electronic information to various corporate customers. (2) Knight Ridder Financial (KRF). KRF was a news and financial information company that sold electronic news and financial information to banks and other financial institutions. KRF competed with Bloomberg, Reuters and other world-class news organizations. (3) Technimetrics, a NY-based financial information services firm. (4) The Journal of Commerce, which was a specialty transportation print publication that is referenced in the Roger Fidler interview.

Selling this forward-looking BIS group and losing all the engineering, technology and related digital talent was a significant loss for the overall KR enterprise in the view of many. While the acquired papers were well regarded and profitable, the sale of BIS and acquisition of MORE papers was a key — some would say, decisive — milestone along the road to the eventual sale of the company. For those of us who worked in the BIS group and remained with Knight Ridder, some of us (like me) made our way out to San Jose. However, most of the deeper technology talent was lost as the individual BIS companies were sold to companies that saw value in digital and electronic distribution. It is a little surprising that Roger, Cathy and especially Tony did not mention BIS at all in their comments

In hindsight the smart and not-so-smart moves are all much clearer. However, even during the times of some of the most critical change and obvious disruption (Craig’s list emergence, etc.) most of the newspaper people in KR didn’t really face up to the inevitable. Within KR there were many people at the most senior levels who DID see the future and we had plenty of outside consultants who advised us that our print-based franchises (especially high margin classified) would come undone once the digital age emerged more forcefully. We had plenty of compelling internal and external consumer research on the declining print newspaper reading habits of various aging cohorts, etc.

Stein concludes by recommending four former senior KR BIS managers who he suggests we speak with. No one can know whether “the path not taken” in business information services would have lead to a brighter future for newspapers. It is important to remember, however, that newspapers were pioneers in this pre-web, highly technical area well before others. Perhaps another Riptide Fellow will one day more deeply mine this question. For now, we thank Steve Stein for reminding us of this important part of the history.

Henry Blodget’s Riptide interview is one of my favorites. In a sea of mostly negative prognostications about the future of quality journalism, Henry stands almost alone as an unrelenting optimist. His argument, simply put, is that in a pre-Web world of distribution constraint, quality content was “like a hydrant in the desert.”  Few people had access to the means of production and those who did worked for companies with access to distribution. Choice was limited so producers had great leeway in product development. The Internet changed all that, providing a global distribution network and unleashing easy-to-use publishing tools like this one. As a result, says Blodget, quality content now flows like a “hydrant in the ocean.” We are awash in news from an almost infinite number of global sources, much of it of very high quality. For this reason, news providers can no longer force their readers to “eat spinach.” Instead, they need to work hard to entice readers with relevant and interesting content, structured for easy access. In a world of almost unlimited choice, the reader is king.

I wasn’t surprised, therefore, when Henry tweeted enthusiastically about Thomas Baekdal’s provocative piece entitled, “What if Quality Journalism Isn’t.” Baekdal uses the recently leaked New York Times Innovation Report, the first newsroom critique of its own digital practices, to question the core assumption that many in journalism, including the writers of The Times report, make: that the problem is not with the journalism, per se, but rather with the lack of digital savviness or competency in pushing it out to the public. In other words, according to Baekdal, The Times and others need to be far more self-reflective regarding core journalistic practices. Baekdal suggests that newspapers like The Times still employ a “supermarket” approach to the news in an era when “intent” (Amazon and Google) and “interest” (Facebook) provide more relevant, compelling and entertaining choices at much lower cost. Hence, newspapers like The Times publish a lot of stuff, but only a small sliver is of interest to any given reader. In short, it’s journalism for the pre-Internet age.

This argument brings me back almost 20 years, to the winter of 1995, when I was interviewing with Arthur Sulzberger to lead the unit that would be responsible for launching The Times web site. As I said in my Riptide interview, my feeling at that time (and today) was that “quality” was – in large part – a function of the user experience, and that – particularly in the dial-up world of the mid-90s – Yahoo was doing that best for exactly the reasons that Baekdal outlines. Putting a newspaper on the web seemed very limiting to me. I understood that The Times wanted to put its content online, but I had proposed that we set-up a separate R&D unit to develop something more genuinely native to the web. In my budget for 1996 (perhaps the most seminal year in digital media history), I had proposed an investment of roughly $3.5 million to both launch the web site and establish my skunkworks. The CFO at the time was adamant that we reduce our investment and announced to the gathered group that I was costing the company “a-penny-and-a-half per share.” For a decade hence, I was known on the executive floor as “Mr. Penny-and-a-Half.” Needless to say, the web site launched in January 1996, but the development team was killed.

Fast forward two decades to Thomas Baekdal’s critique. As I wrote recently in this blog post, newspapers have mostly followed what Clay Christensen describes as a “sustaining” approach to the web. For the most part, newspapers publish journalism almost exactly the way it appears in their print editions and surround it with advertising. In many cases now, they charge for it on a subscription basis, replicating the print business model. I’m not sure this is a bad thing.  At The Times, almost two million people now pay for the journalism, either in print, in digital, or in a majority of cases, for both. Every day, I find so much in The Times of interest that I literally do not have enough time to read it all. In contrast with Thomas Baekdal’s analysis of his interest in newspaper content, mine is that almost all of it is of keen interest. I suspect Baekdal’s reaction is much more typical than mine, particularly for the vast majority of newspapers. But The Times has never been a mass market product. And the journalism will evolve as digital ascends and print goes off into the sunset. In the end, The Times will succeed or fail based on the number of people like me who passionately embrace it. They are the only ones who matter. Arthur Sulzberger said as much in his Riptide conversation with Paul Sagan and me last year.

In retrospect, I’m not sure that my skunk works would have amounted to much given the culture of the institution. At one point early on, Steve Rattner, who was at Lazard at the time, even suggested we might acquire Yahoo. Imagine that. I’m pretty sure we would have ruined it.

My first post on the excellent New York Times article about business model disruption at the Harvard Business School compared the School’s attempts to sustain its existing economics with similar attempts at high-end newspapers like The New York Times and the Wall Street Journal. HBS has chosen to pursue what Professor Clay Christensen refers to as a “sustaining” approach, similar to the strategies followed by several large newspaper companies. In his tweet in response to my post, Jonathan Glick asked the question: “Is HBS the next NYT?”

This question is exactly right. What I didn’t mention in my first post is that educational institutions like Harvard and newspapers like The New York Times depend, in part, on a kind of symbiotic relationship between talent (employees) and these very prestigious institutions. When we think of Michael Porter, we think of the Harvard Business School, and vice versa. Similarly, when we think of Tom Friedman or Maureen Dowd or David Brooks, we think of The New York Times. Mention Bob Woodward and the Washington Post immediately comes to mind. Historically, the institution bestowed its prestige on people like Porter, Friedman and Woodward and, in turn, their identities grew together. In this context, the “talent” would almost always remain with institution until retirement, and in many cases even after, in a kind of emeritus status.

Interestingly, in The Times article, the Dean of Wisconsin’s business school, Francois Ortalo-Magne’, addresses this issue head-on:

Recently, a rival school offered one of his faculty members not just a job, but also shares in an online learning start-up created especially for him. “We’re talking about millions of dollars,” Mr. Ortalo-Magné said. “My best teachers are going to find platforms so they can teach to the world for free. The market is finding a way to unbundle us. My job is to hold this platform together.”

To that end, he has changed his school’s incentive structure, which, as in most of academia, was based primarily on the number of research articles published in elite journals. Now professors who can’t crack those journals but “have a gift for inspiring learning,” he said, in person or online, are being paid as top performers, too. “We are now rewarding people who have tenure to give up on research,” Mr. Ortalo-Magné said.

Mr. Ortalo-Magné spins out the possibilities of disruption even further. “How many calculus professors do we need in the world?” he asked. “Maybe it’s nine. My colleague says it’s four. One to teach in English, one in French, one in Chinese, and one in the farm system in case one dies.”

What is to stop a Coursera from poaching Harvard Business School faculty members directly? “Nothing,” Mr. Nohria said. “The decision people will have to make is whether being on the platform of Harvard Business School, or any great university, is more important than the opportunity to build a brand elsewhere.

“Does Clay Christensen become Clay Christensen just by himself? Or does Clay Christensen become Clay Christensen because he was at Harvard Business School? He’ll have to make that determination.”

This gets at the very heart of institutional coherency (“unbundling”) and is, in my view, the fundamental question that newspapers face as well. It’s true that the Economist has mostly never used bylines. This is the most extreme example of “the brand” subsuming all of the talent in the organization. But that’s an anomaly. In almost all of journalism “stars” are major attractions. Last year, we saw Walt Mossberg and Kara Swisher take their AllThingsD team out of the Journal and almost instantly create a new brand around them called Re/code. I was told by an insider that their recent conference – the first under the new brand – sold out in 45 minutes.

This fundamentally changes the balance of power between institutions like Harvard and the Journal and the “talent” they depend upon to sustain their models. The “talent” now holds the power, and as Mossberg and Swisher prove, a new brand can be built overnight on the web. Perhaps Re/code is sui generis, but just as in academia, these fissures have only just begun to appear in journalism. We haven’t seen a wholesale rush of “star” talent out of places like The Times and the Post, despite high profile moves by the likes of Nate Silver and Ezra Klein, respectively. Nor have we yet seen it in academia.

But the two have striking similarities. And if the “sustaining” approach to their business models has a point of vulnerability, this is where it is in a post-advertising, consumer paying world. David Carr, himself an example of the phenomenon I’ve outlined above, wrote on all of this in his Times Media Equation column about Medium, the blogging tool:

I’ve always been struck by how digital disrupters care deeply about the quality of content that lives online. Even as they helped destroy the business model of traditional publishing, Steve Jobs of Apple, Eric Schmidt of Google and Craig Newmark of Craigslist were always harping on the importance of offering significant content that would enlighten readers.

I personally found Carr’s column to be ahead of itself with respect to Medium’s success. Good for Ev Williams for having charmed him. But fundamentally all the pieces are there. And despite Carr’s words about the traditional business model, that’s still where he earns his living. When Carr, Dowd and Brooks start earning their daily bread from Medium, we’ll know that the fissures have turned to earthquakes.

The New York Times is running a brilliant article today about the Harvard Business School and the emerging Internet technologies that might destroy its business model. In it, the authors turn to two HBS professors, Clay Christensen and Michael Porter, for views on how the School should transition to the digital age. Christensen, characteristically, argues that HBS exists at the high end of the market, and will eventually be destroyed unless it sets-up a separate digital operation to compete against the new companies seeking to disrupt its model. Instead, Harvard has elected to set-up a complementary business, one that is designed specifically not to disrupt the existing model. Their online approach, called HBX, is a kind of elite “Pre-MBA” seeking to teach liberal arts majors the basics of business. About this effort, Christensen says:

“What they’re doing is, in my language, a sustaining innovation,” akin to Kodak introducing better film, circa 2005. “It’s not truly disruptive.”

The HBX approach was championed by another HBS professor, Michael Porter, also very famous but less frequently mentioned by those living through disruptive innovation. Porter argues:

“I think the big risk in any new technology is to believe the technology is the strategy. Just because 200,000 people sign up doesn’t mean it’s a good idea.” Though Professor Porter published “Strategy and the Internet” in the Harvard Business Review in 2001, before the advent of MOOCs, the article makes his sternest warning about the perils of online recklessness: “A destructive, zero-sum form of competition has been set in motion that confuses the acquisition of customers with the building of profitability.”

The Dean, Nitin Nohria, seems to have sided squarely with Porter. He tells The Times:

“I do not believe our M.B.A. program is at risk.” He concluded that disruption is not always “all or nothing,” and cited the businesses of music and retailing as examples. “In the music business, all record stores are gone,” he said, while in retailing, “it’s not like Amazon has eliminated everything; after those debates, my feeling was that we’re going to be more in that category.”

This argument played out throughout our Riptide interviews. Almost everyone we interviewed mentioned Clay Christensen and his ideas when discussing their own experiences with digital journalism. Interestingly, no one mentioned Porter, and in hindsight and with the benefit of this article, I wish they had. As Nohria states, it really isn’t “all or nothing.” But that naturally begs the question: are newspapers more like record stores or retailers?

The Riptide hypothesis is: Both. As we suggested repeatedly, the journalism is greatly sustained by the web and associated digital technologies. Never before have so many people around the world experienced, and enjoyed, New York Times storytelling. But the advertising is like record stores. Classified advertising, and – increasingly – high-end display have experienced a “dollars to pennies,” value destruction, to quote Jeff Zucker. That’s what makes the business of quality journalistic transformation so difficult to manage. You are managing both disruptive and sustaining situations at the same time.

Ultimately, The Times, the FT and the Wall Street Journal seem to have chosen the Michael Porter path. They’ve created high-end, sustaining extensions of their core models and priced them to largely complement one another. This is in sharp contrast to the “digital first” methodology followed by CEO John Paton at Digital First Media. Admittedly, the road is much tougher for large metros like Paton’s, stuck in their local markets and unable to attain the kind of global scale of the New York Times. But in the end, either The Times and others following the sustaining path will be like the specialty retailers able to thrive among the behemoths, or like record stores, pulled under by the Riptide.

Jonathan Glick, the founder and CEO of Sulia, wrote a terrific piece on the idea of publisher as platform for Recode today. (Full disclosure: I am on the Sulia Board of Directors.)

Glick begins with a useful little trip down memory lane. He reminds us that for the past decade or so, publishers and platforms have remained distinct:

In the post–America Online era, Internet media brands divided themselves into platforms and publishers. Platforms enabled some mix of discovery and communication, whereas publishers made content.

Google quickly emerged as the main platform of this era, and when the Web 2.0 startups came along — Digg, Facebook, Twitter, Yelp, YouTube, Reddit, etc. — they followed that Google model. Nobody did both, and there were a lot of strong reasons for this separation.

I might take some exception to that with respect to Yahoo, but they have mostly flailed around at bridging the gap. Now, Glick argues, a whole new generation of companies (Glick calls them “platishers” – an amusing, if awkward, designation) have arisen to bridge this gap. These include the folks at Gawker, Vox, Buzzfeed and Medium.  Glick does a great job explaining – succinctly – what these folks do in a modern publishing context:

The combination of mobile’s small screens and programmatic ad buying has made it clear that successful consumer properties need to have enormous amounts of traffic, and ad units that are essentially content.

The platisher addresses both of these requirements. First, by leveraging partners and users to create content, the platisher can grow much faster than it can by relying on only the newsroom. Second, by enabling marketers to create content, it will be faster to sell, worth much more, and perform much better than banners. And, ideally, the editorial DNA of the platisher — insightful curation, unique content, differentiated brand — makes it a more desirable place for an influential creator or a brand-conscious marketer to publish than just a plain ol’ tech platform.

The other thing he does is confront the engineering issue that is so front-and-center throughout Riptide. As a reminder, many of our interviewees argued forcefully that the publishers missed the boat principally because they lacked engineering talent. The corollary was that tech companies wouldn’t get into content.  According to Glick:

You might notice that most of these reasons were reasons for tech companies not to do content, more than the other way around. But it’s also true that media companies internalized these views and accepted that they should be technology adopters, not inventors. Partner with platforms; don’t try to compete.

And yet, despite this bevy of biases, this now appears to be changing. It’s not just Medium and Gawker. A flurry of well-funded media founders are ignoring the schism and plunging into ambitious projects that embrace the platform as a concept. Suddenly, we have lots of … yes, platishers.

Interesting, in Glick’s analysis, not a single legacy media company is mentioned. No one. Is this an oversight? After all, companies like The New York Times Company now have hundreds of developers. Lots of interesting tech projects are in the works. Can publishers like The Times become platishers?  Should they?

Finally, I wish Jonathan had made some comment about quality. In my recent blog post summarizing David Carr’s recent piece on “platishers” I noted that Carr ended with a question about whether “platishers” could bridge the quality gap. I used Buzzfeed and Business Insider as examples of  companies trying to do that. But I said in the end that no one could yet touch the legacy folks with respect to sheer editorial “muscle.” Will “platishers” get there?

I’d  love to hear Jonathan’s views on these two questions.

Today, The New York Times reports a “major expansion” at the Washington Post. We spent a lot of time interviewing folks at the Post for Riptide. We went back to their earliest online investments in things like LegiSlate, the proprietary online business to business service covering government legislation. We talked to the family scion, Don Graham, as well as Alan Spoon, who was instrumental in setting up Washington Post Newsweek Interactive (WPNI), and Chris Schroeder, who ran LegiSlate then moved over to be WPNI’s first President. We spoke with Caroline Little, Schroeder’s successor and now the CEO of the main newspaper association, the NAA. Even though we decided early on to focus exclusively on the business-side leaders (hence, our desire to see others come in and focus on new interviewees across the broad spectrum of disruption in journalism), we did interview Marty Baron, the executive editor of the Post.

It’s worth reading Baron’s interview as a backdrop to The Times story. I’ve known, and worked with, Marty for many years and respect him enormously, although he can be a prickly business partner at times. He’s a great defender of quality journalism and has worked tirelessly during an era of newsroom downsizings to sustain the kind of journalistic “muscle” required to hold the Big Boys, from the priest abusers in the Catholic Church to the Governor of Virginia, accountable. Now, according to The Times, he’s about to add a lot of strength to the Post’s newsroom.

The Post will introduce several initiatives this year, Mr. Baron said in a memo to his staff on Wednesday. There will be five new politics reporters as well as photo editors, data visualization specialists, news desk staff and web designers. It will add a breaking news desk and a Sunday style and arts section, as well as a revamped Sunday magazine that will be “bigger in dimension and in the number of pages, with a new design and a range of new features.”

In the context of the Riptide, of course, we’d want to explore how this new investment will ultimately pay for itself. My post yesterday summarized three reports on how new entrants like Buzzfeed and Business Insider are rapidly gaining audience and advertising share from the incumbents. We asked the question, can these new players, by applying the techniques of the tech-driven web, build a bridge to the kind of quality investigative reporting that newspapers like the Post are known for? Can they develop the economics to do that?

Jeff Bezos seems to be betting that his newsroom investment will revitalize the sagging fortunes of a once great paper. There are only three ways that he will get there:

1. He can simply run the Post as a philanthropy, absorbing whatever losses he runs as a rounding error against his billions in net worth. If you like this approach, read David Bradley’s Riptide interview. Bradley, the chairman of Atlantic Media, makes a compelling argument that running a place like the Post as a charity is a road to ruin. And I don’t think that’s what Bezos has in mind. He will accept losses, maybe for a long time, but there will be a path.

2. He can go big, chasing Buzzfeed and the Huffington Post for 100+ million monthly users.  And that’s just a start. That’s an interesting path, but one that will require Baron to adapt himself to the rules of the web jungle. If you look at the practices that many of the larger new entrants have followed, they will be anathema to Marty. Not all of them, of course, but there can be no compromises when it comes to this path. Either you play or go home.

3. He can chase The New York Times and the Wall Street Journal. These guys are betting that there’s a big enough paying niche on the global stage for the kind of high quality journalism they offer. Arthur Sulzberger discussed this model with Paul Sagan and me at some length. This would be the most natural course for the Post, but it’s no slam dunk. To support the kind of newsroom that Marty runs, he will need at least a million subscribers to pay him a decent subscription fee each month. He’ll also need to give the kind of people willing to pay for The Times and the WSJ a reason to subscribe beyond “quality journalism.” The Post has a unique niche in American politics, and they could build on that, but there is vast competition in that space.

Personally, I can’t wait to see what happens at the Post. I’ve been excited ever since I heard that Bezos had agreed to acquire it. He’s one of the great entrepreneurs and business leaders of our time, right up there with Steve Jobs. That’s why I’m also hoping that the very next interview that gets done for Riptide is with Jeff.

The New York Times, the Wall Street Journal and the Financial Times all ran articles this week on the rapidly changing digital news landscape. All explore whether the recent funding of several digital news startups might be creating a bubble in the Internet news arena.

First up was David Carr who used Ezra Klein’s announcement that he’s moving over to Vox Media to make the point that Klein’s move is less about escaping old media than “going toward something else.” That “something else” is a native entity that is “optimized for the current age.”  Carr likens places like Vox to the cable programmers who turned entities like CNN (fondly known as the Chicken Noodle Network back then) into “big businesses today.” He writes that places like Vox, HuffPo, Buzzfeed and others “will eventually mature into the legacy media of tomorrow.”

Carr puts a stake in the ground around one huge question explored in our Riptide report: That legacy providers never really embraced technology as central to their transformation. He writes: “In digital media, technology is not a wingman, it is The Man.” This was a major theme in our report and goes back to the earliest days of digital media.  Eric Schmidt was perhaps most direct when he told us that you can’t innovate without engineers, and that legacy news companies simply don’t have them in any quantity. Cathy Yates, an early leader at Knight-Ridder Digital, disagreed. It was the underlying culture, not the talent issue, according to Yates. She told us she hired plenty of engineers, going back to the very beginning of web publishing. In my view, the bridge between these two perspectives was built by Will Hearst. Hearst agreed with Schmidt, but added the crucial thought that legacy media businesses and their boards have never placed deeply technical people in key leadership roles. So even if there’s a CTO or CDO sitting at the table, the essential strategy and direction is run by folks who don’t have the technical fluency to make the crucial decisions about the product portfolio. That can’t work in this rapidly evolving environment.

Will Launder’s Wall Street Journal piece (subscription required) explores the collapsing ad rates at many news sites. He also uses Klein’s departure as a hook, but goes in a very different direction from Carr. One of the sites he focuses on is GigaOm, which recently folded its paidcontent acquisition into the main site. Om Malik, GigaOm’s founder, spoke to us about the many differences between running a legacy operation and a startup. As a funny aside, he mentioned David Carr as someone who might not be affordable for most news startups. Perhaps that’s no longer true, or perhaps David might tradeoff some cash comp for equity, but Carr’s point seems to be that a thousand flowers are blooming, and some of them will turn into beautiful gardens. Launder seems much less sanguine. He closes with a quote from Jim VandeHei, a founder of Politico and another Riptide interviewee:

Mr. VandeHei suggests most investors seeking big returns would be better off betting their money on other sectors, like health care or energy, unless they are “passionate about journalism.”

This brings us to today’s piece by Henry Mance in the Financial Times. Entitled, “News groups face age-old problems with online startups,” the article discusses the increasingly difficult competitive environment for legacy news companies. While Mance mercifully leaves the omnipresent Ezra Klein out of this one, he does mention the omnipresent Buzzfeed, “the US-based website that wants its articles to be shared above all else.” With forecast revenues “of more than $100 million this year,” Buzzfeed is now moving beyond “simple entertainment” and is – according to the BBC’s James Harding – ‘muscling up to become a serious news machine.’ Buzzfeed’s history and strategy is discussed by it’s founder, Jonah Peretti, in our Riptide report, and this brings us back to Carr’s piece.

In the end, the question isn’t just whether successful news startups can satisfy the needs of venture capitalists. As Carr notes, the real issue is quality. Buzzfeed and others (including interviewees Henry Blodget, Arianna Huffington and Nick Denton) are trying to build this bridge. They are making important strides. But so far nothing quite replaces the three news organizations I’ve cited today in terms of sheer editorial “muscle,” to use Harding’s word.  Will that change? If Clay Christensen’s theories are right, it will — just read his Riptide interview to find out.

Henry Blodget offered the most optimistic point-of-view among our interviewees with regard to the state of modern journalism. His basic premise is that there has never been more good information available to readers; that the web has, in fact, created a “golden age” of journalism. Bill Keller offers a more nuanced perspective in his New York Times column today, focusing specifically on foreign reporting. One of the issues, he suggests, is the growing role of freelance journalists:

The problem with the cutbacks in professional foreign coverage is not just the loss of experience and wisdom. It’s the rise of — and exploitation of — the Replacements, a legion of freelancers, often untrained and too often unsupported. They gravitate to the bang-bang, because that’s what editors and broadcast producers will pay for. And chances are that nobody has their backs.

He goes on to suggest that freelancers are often exploited, sometimes ripped off. In this context, he refers to a “freelancer in Yemen” and links to a page  to “name and shame” news organizations that don’t pay their freelance talent. The link points to a broken page, but more important, that journalist is Iona Craig. Iona can be found on a fascinating new “platform” called “Beacon” that is designed to help with some of the issues Keller identifies in his very good column; most importantly, the one about getting paid. Beacon may not be the ultimate solution to the Riptide, but it’s a step in the right direction.

Even before releasing Riptide we heard from a number of people who felt that we missed particular players in the evolution of digital news. We explain in Riptide’s “About” section that we did our best to cover a lot of ground in only three months, the term of our Fellowship. We freely admit that we couldn’t cover everything and everyone. In part, that’s why we built Riptide on the web. We hope that others will fill in the blanks and update the corpus as new events occur. The IAB’s Randall Rothenberg, who interviewed Sir Martin Sorrell for us, was particularly concerned about our having neglected to interview anyone from Bloomberg. His post, below, explains why:

“Riptide” is an important contribution to the history of the practice of journalism, the business of news, and the effects of media — but it’s only a first step. I hope you go further, and explore some roads that were not on your early map.

For example, I believe you erred by ignoring the role Bloomberg played, especially as a test of the proposition you assume to be true but never explore in your document: Does news indeed have objective value?

The lack of attention to that question is, I think, a flaw in this first draft, as well as in the thinking of many news industry executives. It’s implicit in many of the “Riptide” interviews: Journalists and journalism executives believed news was valuable because news companies had always made money. Therefore, none of them felt compelled to investigate this fundamental presumption.

Bloomberg actually presented a controlled market test of this question. For many, many consumers, Bloomberg was their first taste of what later came to be called the Internet. Granted, it was a private network. But it offered them many of the benefits the IP-based Internet later would offer the world: copious information, services, email, community, community connectivity, and massive lollygagging opportunities. It was also the first large interactive company to offer a test of the value of news to paying customers — the first place where the value of news wasn’t just a matter of received wisdom or ideology, but a business proposition.

I realize Bloomberg was not a perfect test of this principle, by any means. They weren’t charging independently for “the news”; instead, it was an add-on to the company’s analytics services. But Mike Bloomberg, Tom Secunda and the other early Bloombergians felt the news was so essential to the company’s business that when Dow Jones threatened to pull DJNS off the Bloomberg terminals, they thought they had no choice but to start their own news service.

It’s also not a perfect test of the value of news because Bloomberg’s market was a B2B market; they believed their customers required the news because they made money from it. (Bloomberg was where I learned that beating the competition by a half-second on the news of a Bundesbank interest rate change could be worth hundreds of millions of dollars to your customers.) But the same would be true of the Wall Street Journal and the Financial Times, and you’re not segregating them out of your narrative simply because they are business-news companies.

Net, I think Bloomberg was a crucial piece of the evolution of the Internet and news. Bloomberg provided a test of the value of news to an important consumer/customer base; it was an experiment launched by non-news people in a non-news company; and their test helped them in some way to grow to become one of the most valuable and influential companies in the news and information business. What did they learn, and is it more broadly applicable to journalism? Therein I think is an important part of this tale — the next phase of “Riptide.”