Friday, November 25, 2005

Entrepreneur taps mistrust of media for new venture

The internet entrepreneur Craig Newmark, whose Craigslist site provided a hugely successful free alternative to classified advertising, has trained his sights on the old-fashioned newspaper industry.

Mr Newmark - whose is the seventh-most visited internet site in America, just after eBay - has diverted millions of dollars of advertising revenue away from newspapers.

At a seminar at the Said Business School at Oxford University this week, Mr Newmark rehearsed his new media paradigm: the combination of improving Web technology and a popular groundswell of distrust for reporters - especially, he says, because of ill- informed reporting of the Iraq war and its build-up - means that ordinary people are ready to take over the newsroom.

Mr Newmark said that he expects to launch a project in the coming weeks to harness the "wisdom of the masses" that has fuelled his advertising site and apply it to daily journalism.

The success of Craigslist means that when Mr Newmark talks, the newspaper business would do well to listen. In the San Francisco area alone, it is reckoned he has denied local newspapers about $50m (£29m) in classified advertising revenue annually. The site makes a modest income, charging only for recruitment ads in big markets like New York. Everything else is free. There are sites for almost every major US city and 35 international cities including London.

While he has yet to discuss the specifics of his next venture, he has hinted at an interactive website on which users could decide which parts of the news really matter to them and even report some of it themselves.

"Things need to change," he said. "The big issue in the US is that newspapers are afraid to talk truth to power. The White House press corps don't speak the truth to power - they are frightened to lose access they don't have anyway."
The White House press corps seems to enrage him especially. "No one is taking their job seriously there," he recently remarked. "Now it could be that they could be under a directive to not do so. We don't know. I've spoken to a lot of journalists who are very frustrated."

Part of the problem lies with the newspapers themselves. The race for dollars, he insists, has obscured the race for truth. "They're being run as profit centres, and they're trying to get pretty high profit margins. As a result, investigative reporting has been seen as a problem."

Mr. Craigslist has enough money to make a major splash in what has become a rather shallow pool. He could heavily subsidize real journalism with only a portion of the money he makes off his money. And if this idea becomes a reality, it has the potential to expose Open Sores Media for the Ponzi scheme it really is.

Sign me up, Craig.


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