Apocalypse 37: AOL buys TechCrunch

a.o.l. has moved to acquire technology and business blog TechCrunch, as part of new CEO Tim Armstrong’s strategy to turn the company from an internet service provider into a stable of content sites, a digital version of a magazine holding company. TechCrunch founder Michael Arrington on his reasons for selling:

They run the largest blogging network in the world and if we sold to them we’d never have to worry about tech issues again. We could focus our engineering resources on higher end things and I, for one, could spend more of my day writing and a lot less time dealing with other stuff.

They already own many of the top technology blogs. They already have a huge sales team in place (although our own sales team kicks ass and is staying on). And they have an internal events group that we will be able to leverage.

From a product and business standpoint, it’s a perfect fit.

…AOL was very aggressive about one last important issue that really sealed the deal – editorial.

Tim told me that he doesn’t want whatever makes TechCrunch special to go away. He also said it was important that we feel free to criticize AOL when we think they deserve it. And the agreement we signed with AOL fully reflects this. In particular, we used the Twitter document scandal as a test. If the same thing happens with AOL in the future, we should feel comfortable posting those documents. And in that unlikely event, we will.

More information on the deal here.

I’ve been saying for some time that the future model is a kind of aggregation of niche sites under big name banners, including a.o.l.’s. And TechCrunch is one of the best niche sites out there. I disagree with much of what they write, because they get over-excited about each and every startup they cover. But the fact is, they also break more big tech stories than anyone, and I find that the site is pretty indispensible as a result. All in all, Armstrong has made a smart acquisition.

Why BlackBerry Got Banned

A few weeks ago, I had a fascinating conversation with a journo friend about the moves by several governments–first the UAE, then Saudi Arabia, then India–to ban BlackBerry because its maker (Canadian company Research in Motion) would not grant these states unencrypted access to users’ correspondence. Citing the locations of BlackBerry servers (in Canada and the UK) they alleged that Western powers could use the technology to spy on the East. Both privacy hawks and businesspeople cried foul, even more so when RIM agreed to open one server center Saudi Arabia and prepared to negotiate a deal with India to keep its business alive.

My friend wanted to know what the story was really ‘about.’ Was it–as the bans’ promoters insisted–about how much data our governments in the West already have? Was it about the fact that BlackBerry IS encrypted in the first place when so much other data is not (something many consumers seemed not to know)? Was it about the fact that democratic India was following the pattern set by more draconian regimes? Or, he was asking me, was it about something else entirely? Here’s what I told him:

“To my mind, these bans represent a kind of clash between the technology community’s perception of itself as being essentially above governments and the reality that all international business is subject to and inextricable from international politics. What is especially remarkable about this is the degree to which tech firms–which are still heavily consolidated in the U.S.–gladly do business with the U.S. government, while maintaining the idea of being essentially above regulation. In particular, there is a cozy symbiosis between the Valley and the defense establishment, and it leads some in the developing world to think of all tech firms as proxies for the U.S. government. Given that, it is also a story about developing country governments demonstrating the regulatory muscle not to be talked down to by the West, about showing–mostly to their own public–that globalization does not mean colonization. It’s also important to keep in mind that while BlackBerry messaging IS encrypted, it’s not that governments elsewhere in the world are necessarily more comfortable with that than the countries issuing these bans. Rather is is that here in the West, governments can often subpoena for access to specific correspondence if it is necessary for a court case. In countries where that kind of subpoena power doesn’t exist, governments might try to hack systems extrajudicially, and then if that fails, proceed to shut down what they cannot penetrate.”

One thing this story is NOT about, however, as the above should indicate, is privacy: we lost that a long time ago.

Apocalypse 35: Full Circle at Forbes

As you probably know by now, Forbes has bought and decided to shutter blogging portal True/Slant, and to bring its erstwhile chief Lew Dvorkin in as its new chief. What you may not know is that Dvorkin–whom I wrote about last year–was an ex-Forbesian, who left the magazine for a start-up, and then for AOL, specifically because he wanted to get deep into the web and digital marketing, and left AOL, he told me, because it didn’t have “the DNA for content-creation.” At thetime, he was trying to explain True/Slant to me as pure content informed by branding savvy, but the combination will be just as relevant at Forbes. Former co-workers there tell me the change is all about helping Forbes play digital catch-up, and the test is maintaining its reporting DNA in the process. Read the rest of this entry »

Smug Edition

Since I started writing professionally in 2005, I’ve covered a pretty wide terrain: from tech to media to energy to regulation to macroeconomics to international geostrategy. The upside of that is the rich and diverse set of experiences I’ve had. The downside is that I rarely stay on a beat long enough to see a company or person I’ve followed through their career.

Apocalypse 33: News on the Dole

The FTC has released a report on the state of the news media, in preparation for a meeting on June 15. The FTC draws heavily on previous reports by the Pew Center for Excellence in Journalism and the Columbia Journalism School.

To new media evangelists, the report suggests the government should protect old media organizations against dangerous digital forces, i.e. the evangelists themselves. And the FTC’s focus is traditional, The report defines journalism as original reporting in real, or very recent, time. This means newspapers and online news sites, but it does not include magazines or opinion blogs or most TV news.

Some bloggers think this line is arbitrary, but I disagree. Aggregators and analysts are beginning to find sustainable business models online, but the raw news they rely on hasn’t. Raw newsgathering is inherently inefficient, and has never been profitable. But in print, you can bundle in the money-losing news with the profitable commentary, the spinach with the candy. The web breaks the bundle. It’s no surprise that no one has figured out to monetize raw beat reporting—on its own—online. The FTC has not only chosen the most essential segment of media, but the one that, demonstrably, the market hasn’t figured out. That’s what the state should do.

The web-istas say the state has no business in journalism. But for most of history, and especially at times when new technologies were emerging, American journalism has relied on government support. Done wrong, of course, this is propaganda. But done right, it’s great. Jim Lehrer is still the best evening anchor. Enough said.

As for the FTC’s actual recommendations, I have mixed reviews: Read the rest of this entry »

China’s Pearl

My latest story is up, on Chinese investment in Balochistan, a Pakistani province that borders Afghanistan, Iran and the Persian Gulf. As others have reported, China is building up investments in Central and South Asia in a strategy it calls the “string of pearls,” in a way that contains/constrains India. My piece looks at how China goes about staking its claim and what the strategy, as applied in Pakistan, means for the United States.

A Spoonful of Sugar

I’ve got a piece in this week’s edition of Forbes on the real crisis in Pakistan—the systemic failures of government, particularly on economic issues. My case study is the mismanagement of the nation’s sugar supply:

The sugar crisis has its roots in the fragmentation of Pakistan’s sugar sector. Growers, millers, wholesale distributors and retailers each have their own regulatory overlords offering protectionist perks and their own cartels to defend such gains. Though this structure goes back to the 1950s, recent policy decisions and the worldwide spike in prices of commodities like sugar have aggravated its effects.

…Economic problems provide rallying cries for opponents like Sharif and radical insurgents eager to bring down the government, while a weak and dysfunctional state contributes to economic distress. In the case of sugar, whose consumption in Pakistan is approaching developed-country levels, the danger is acute: In 1969 a sugar shortage helped bring down the rule of military dictator Ayub Khan.

Read the piece in full (and comment!) here.

Apocalypse 32: Keeping News Alive?

I’ve been exploring the Google-NYTimes–WaPo venture Living Stories, a site that aggregates coverage of particular events in real-time. As one reader put it, this seems like something news organizations should have done long ago.
As a consumer of news, I consider this a potential tool, but it needs to have a much wider array of news sources to be truly useful: my challenge as a reader today isn’t keeping up with the New York Times’ coverage of Pakistan; it’s keeping up simultaneously with the Times and the Post and the Journal and the BBC and the Guardian and about as many local outfits.

There are already ways to aggregate news from all those places, and to sort news from each organization by subject, and even to sort news by topic once aggregated. All we need is a way for news organizations to monetize this process. A better idea might be for the news industry to adopt a uniform standard for tagging their stories that would be compatible with all RSS readers and reading devices. If they simultaneously adopted my suggestion on embeddable ads, they’d be able to own monetization of their content wherever it went, without reference to third-parties like Google.

Because even though ad revenue from Living Stories is to go to the news organizations, Google is still powering the site and organizing the ads—they still have access to all the user data involved and that benefits them elsewhere. The more that all news organizations’ content merges on sites like these, the more centralized and more powerful Google’s data cache can become.

Moreover, Living Stories, or indeed any subject-based aggregation strategy, doesn’t solve the critical problem facing journalism today: if given a choice to consume content by subject, it’s likely that readers will choose to keep up with regular developments in national politics, hyperlocal affairs, sports and culture. Foreign affairs, state-level politics, and economics are less likely to receive sustained attention—everyone is interested when there’s a major intelligence breakthrough, a corrupt governor or a case of corporate fraud, but no one wants to the read the months of daily stories that lead to big scoops in these areas. And there’s no way to know, in advance, which companies or which states or which countries will produce that scoop—you have to pay, blindly, for daily reporting on all of it. Who is going to do that now?

I don’t think Living Stories does much to help us there. Like many Google products—Gmail, Reader—I like this one, but it’s unclear to me if its good or bad for the news organizations involved.

Maha Breaks the Space-Time Continuum

Today, from my bedroom in New York, I video-blog about the problems with the cultural/individualist left, postmodernism and the dire state of environmental reform:

Illustration: Jayachandran / Mint

The Muslim world’s middle classes are the ultimate stakeholders in the war on terrorism. While demanding liberal pro-growth policies that raise the incomes of those at the bottom, middle-class business leaders remain dependent on the state for core services such as education and healthcare which both facilitate their own entrepreneurship and benefit the poor.

Unlike upper-crust investors, they can’t pack up their assets and their families and leave when political turmoil hits. Because they have real wealth to lose if the state falls apart, middle classes remain engaged in the democratic process and protect democratic institutions from violence and corruption. By strengthening the state, and enriching their societies, they undermine the sales pitch of militant leaders who prey on inequalities and power vacuums to recruit followers. Even in economically troubled, war-torn Pakistan, a small middle class is beginning to play this very role. [Read the rest.]

Apocalypse 31: What’s in a Name?

Not much, I hope. Since a favorite publication–BusinessWeek–is about to add “Bloomberg” to its title page. Bloomberg BusinessWeek (BBW for short!) doesn’t quite roll off the tongue.

That said, Bloomberg buying BusinessWeek is about the best thing that could have happened, given that the alternatives all involved some kind of private equity entity, and as I’ve previously articulated, those kinds of mergers are bad news. Still, there are reasons to worry, because there’s a lot of uncertainty about HOW Bloomberg plans to use BusinessWeek.

Bloomberg could take two approaches: Read the rest of this entry »