This Week in Review: Facebook’s IPO aftermath, and New Orleans’ cuts stoke the paywall debate
[This review was originally posted at the Nieman Journalism Lab on June 1, 2012.]
Debating the meaning of Facebook’s IPO flop: Facebook’s fall following its initial public offering two weeks ago continued this week, with shares dropping under $30 (they were initially offered at $38). Several other social media-based companies have seen their stock tank, too, prompting Forbes’ Dee Gill to wonder if Facebook’s IPO has been a reminder that “even a wildly popular product won’t save a company that can’t make money.”
David Strom of ReadWriteWeb did point out, though, that stock prices soon after tech IPOs haven’t been a very reliable indicator of companies’ prospects for long-term success. The New York Times’ Joe Nocera made a similar point, arguing that Facebook’s IPO flop was fueled by get-rich-quick investors and that long-term investors should be undeterred.
At PandoDaily, Farhad Manjoo made the case that Facebook’s IPO was a valuable corrective to a dangerously overhyped tech market: “Facebook’s IPO proves that there isn’t an endless supply of bigger suckers. And because bigger suckers are the primary ingredients in bubbles, it now seems likely that the new tech bubble—if there ever was one—is dead, dead, dead.” And The Atlantic’s Alexis Madrigal made a pretty thorough defense of Facebook’s value as a company, reminding us that it has a still-growing near-monopoly and tremendous potential for making money from its millions of users.
There was still plenty of criticism of Facebook floating around this week, though. The New York Times’ Ross Douthat saw Facebook as a sign of the lack of financial progress brought by the Internet economy, and Facebook’s advertising shortcomings continued to be a point of discussion. Ad Age reported that GM pulled its advertising from Facebook in part because Facebook balked at its proposal to run full-page ads, which, according to media consultant Terry Heaton, illustrated the difference between Madison Avenue’s philosophy of bending the masses to their will and Facebook’s gentler approach. The Huffington Post’s Bianca Bosker also looked at the tension Facebook is facing between its advertisers and users.
Here at the Lab, Dan Kennedy extended the ad problem to journalists, proposing a few ideas for adapting to an online world in which the value of ads continues to shrink. Also on the news front, Buzzfeed’s John Herrman wrote about how coverage on Twitter of the Facebook IPO indicates that Twitter is well ahead of Facebook in covering and developing breaking stories.
Another major note on Facebook to keep an eye on: The New York Timesreported that the company is trying again to build a smartphone to release later this year. It’s had several false starts in this area before, but is moving “deeper into the process” this time. Facebook was also reported this week to be buying the facial recognition company Face.com.
The impact of New Orleans’ move away from print: As we moved into the second week of discussion of the New Orleans Times-Picayune’s cutback from daily newspaper production, the conversation began to shift from New Orleans in particular to the future of the newspaper industry as a whole. Poynter’s Steve Myers looked at a couple of the immediate issues — concerns over whether Advance Publications’ other papers (such as the Cleveland Plain Dealer) might make similar cuts, and whether New Orleans readers are likely to follow their paper online.
The New York Times’ David Carr, who broke the story, wrote a kind of elegy for the paper, concluding that while the cutback may make some financial sense, it’s a great loss for a historically corrupt city. “The constancy of a paper,” he wrote, “is a reminder to a city that someone is out there watching.” At the Huffington Post, Harry Shearer thought Carr wasn’t harsh enough in his assessment of Advance’s plans, arguing that breaking readers’ daily newspaper habits is foolish, not economical. Shearer, Myers, and Iowa journalist Dave Schwartz all pointed out that New Orleans has particularly low Internet penetration rates (not to mention high newspaper penetration rates), with Schwartz calling those without web access “casualties in a revolution.”
Mathew Ingram of GigaOM and CUNY prof Jeff Jarvis, on the other hand, both argued that we need to get past our fixation with print journalism, using it when it’s profitable but feeling free to drop it when it’s not. “We have to make print beside the point,” Jarvis wrote. Will Bunch of the Philadelphia Daily News, meanwhile, proposed some ideas at Poynter for resolving the journalism crisis in New Orleans, focusing on philanthropic efforts to improve Internet access, hyperlocal journalism, and accountability journalism. Al Jazeera discussed the future of the newspaper industry in light of New Orleans’ move away from daily with a few luminaries as well.
Cuts, layoffs, and the viability of paywalls: The Times-Picayune isn’t the only paper making these kinds of changes — Postmedia, Canada’s largest newspaper chain, announced this week it would cut the Sunday edition at three of Canada’s largest newspapers, lay off dozens of employees, and consolidate some of its editing operations, and also hinted at cutting back print days for its largest paper, the National Post. Postmedia was also reported to be moving ahead with paywalls at several of its papers.
While Postmedia CEO Paul Godfrey complained in an interview with the Globe & Mail that its ad revenue was being stolen by foreign digital companies (read: Google, AOL, etc.), GigaOM’s Mathew Ingram said the problems for Postmedia and other newspapers run much deeper than cuts and paywalls.
Crain’s Chicago Business also reported that the Chicago Tribune is considering a paywall potentially focusing on niche coverage, and Poynter’s Steve Myers pointed out that the major newspaper companies that aren’t charging for news are quickly becoming the outliers.
The paywall debate got a shot in the arm this week in the aftermath of the Times-Picayune’s cuts, when The Wire creator and former newspaper reporter David Simon asserted at the Columbia Journalism Review that “the whole industry will continue to collapse until everyone swallows hard and goes behind a paywall.”The short post spurred a feisty comment thread as well as several varying responses. A post at the news startup Circa made a distinction between charging for content (OK) and information (much more difficult to do), and Will Bunch made his aforementioned philanthropically driven proposals for New Orleans as a middle way between paywall advocates and detractors.
In addition, former newspaper editor John L. Robinson argued that if young people won’t even pay much for Facebook, they sure won’t pay for a newspaper — and that should worry newspaper publishers. Here at the Lab, Ken Doctor added some practical approaches to the discussion, looking at the effectiveness of different newspapers’ plans to shift from advertiser revenue toward reader revenue.
Breaking down the article: We got a reprise of the occasionally occurring discussion about better ways to do the news article this week, starting with NYU professor Jay Rosen’s complaint that a Reuters article on Facebook’s IPO was too dense for non-investors to understand. That triggered a lengthy Twitter conversation between Rosen, Reuters’ Anthony De Rosa and Felix Salmon, and CUNY professor Jeff Jarvis — Storified by De Rosa — about ways to better incorporate background information into news stories.
Rosen has done plenty of thinking about this problem in the past, and this time, Jarvis expanded the Twitter discussion into a post of his own in which he reconceived the news article as a group of assets (data, background information, leads, etc.) that could be broken down, rearranged, or specialized in by various news organizations, with links as the core element tying them together. “The end result is still an inverted pyramid — a prioritized set of assets that one can stop going through when one feels sated with information. But everyone’s pyramid can be different. And what fills those pyramids can come from various sources,”he wrote.
Mathew Ingram of GigaOM echoed the idea, and meanwhile, Technically Philly’s Sean Blanda and blogger Dave Winer both wrote on rethinking the elements of an article — Blanda proposed thinking of the basic unit of journalism as the fact rather than the article, and Winer said we need to do better than Wikipedia when it comes to background information and explainers.
Reading roundup: Lots of little stories and debates popping up at the intersection of news and tech this week. Here’s a few of them:
— WikiLeaks’ Julian Assange lost his appeal to the British Supreme Court against extradition to Sweden on accusations of a pair of 2010 sexual abuse cases. He has two weeks to appeal one of the ruling’s points, but it looks as though he’s headed to Sweden to stand trial. Here’s The Guardian’s and The New York Times’ coverage, and Micah Sifry’s examination of the state of online whistleblowing as WikiLeaks struggles.
— A couple of ebook notes: Amazon settled its dispute with a publisher that pulled its books from the site earlier this year, and meanwhile, two other publishers filed responses to the Department of Justice’s antitrust suit on ebook pricing, and Apple filed its response to a parallel class-action suit.
— Web designer Oliver Reichenstein ripped the ubiquitous “Share” buttons all over news and other sites, while the Lab’s Joshua Benton provided some initial data showing they may be quite helpful for news orgs to prompt sharing of their content on Twitter.
— Cornell prof Tarleton Gillespie wrote an interesting post exploring whether we can trust Twitter’s Trending Topics algorithm, and GigaOM’s Mathew Ingram said it’s not necessarily Twitter’s job to broaden our worldview, but instead our own responsibility.
— Finally, it’s not shameless self-promotion if it’s actually really good: The Lab ran several fascinating pieces this week that are worth a look — Justin Ellis’ talk with Guardian editor Alan Rusbridger, some cool ideas for improving news from MIT Media Lab students courtesy of Andrew Phelps, and the AP’s Jonathan Stray’s smart column on broadening our concept of what journalists do. Enjoy.