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Features Posted June 23, 1998
Who Owns Internet News?
By Matt Welch, OJR Staff Writer and Columnist

Print version

Sidebars:
Tracing the Ownership of Online News
Natalie Merchant, CNN and Time-Warner
This spring, the short and unhappy deaths of Word and Charged, coupled with Slate's decision to charge for subscriptions, touched off a flurry of speculation on whether "Internet content is dead."
 
Meanwhile, the companies who produce business/technology news sites for a living were busy hiring reporters and courting the world's biggest media/entertainment empires.
 
The activity culminated in The Walt Disney Co.'s June 18 agreement to buy 43% of the search engine company Infoseek Corp., and NBC's June 9 purchase of 4.99% of CNET and 19% of CNET's Snap! Online search engine.
 
The new investments further confused the already byzantine web of ownership, business alliances and competition among the parent companies of the biz/tech sites. It is very difficult for online visitors to know whether the news they're reading is being written and distributed by sources that a have a stake in the events.
 
Readers looking for news on Ziff-Davis' April 29 IPO, for example, might not have been aware that the giant Japanese software company Softbank not only holds a majority stake in Ziff-Davis (which publishes zdnet.com and zdnet.com/zdnn, plus 80 magazines including PC Magazine Macworld and Yahoo! Internet Life), but also owns pieces of The Red Herring, TheStreet.com, GeoCities and Yahoo! itself.
 
When Wired News writes a series of articles questioning the quality of the Snap! Online search engine, the reader might not know that Wired's parent owns a competing search engine, or that Snap! Online is owned by CNET, which publishes content that competes with Wired News.
 
Readers are also probably not aware at first glance that the respective parent companies of the popular biz/tech news sites, zdnet.com, internet.com, cmpnet.com and thestandard.net, are engaged in a global struggle for the technology conferences market, in addition to tech magazine publishing and Internet content development.
 
When the Industry Standard wrote June 17 about "Internet Firms Infuriated by Dismal Turnout for PC Expo's Web Show," writer Alex Lash did not mention that his site's parent company, International Data Group, competes bitterly with PC Expo organizer Miller Freeman.
 
Significantly, these sites are by and large some of the best collections of breaking news on the Web. Some, like TheStreet.com, have detailed disclosure policies and a thorough "about us" section. Few, however, mention when the subject of an article is, in fact, a bitter rival.
 
This is important to remember, especially in the coming months as the Time-Warners of the world circle around search engine companies and news providers. Biz/tech news companies have only a limited number of search engine/portals to compete for exclusive distribution deals (some, like Wired Digital and CNET, have their own search engines).
 
There are also only a limited number of giant media companies with the money and interest in closing huge investment deals; the names Softbank, Intel (which has invested in hundreds of New Media companies), Microsoft, Vulcan, and Zapata (savior of Word and Charged), crop up again and again.
 
Because of their sheer size and ubiquity, Microsoft and Intel pose especially tricky potential conflict problems for those who write about them.
 
New Media reporter Brooke Shelby Biggs, who writes a column called Forward Thinking for CMPnet's TechWeb, discovered how tricky these relationships can be when she wrote a piece April 29 denouncing Microsoft for attempting to wage a covert PR campaign (http://www.techweb.com/internet/columns/fwdthinking). "Mail poured in, pointing out that in my bio at the foot of the column, it is noted I host a conference on Netscape's NetCenter," Biggs wrote. "That relationship certainly calls into question my motivations for writing an anti-Microsoft piece. After all, I work for one of Microsoft's chief enemies."
 
Microsoft's enemies include the head of Knight-Ridder New Media, Bob Ingle, who became so incensed at Bill Gates' poaching of his staff that he joined an anti-Microsoft group called Project to Promote Competition & Innovation in the Digital Age. That triggered a round of hand wringing among Knight-Ridder's reporters, and now Mercury Center runs disclaimers with every article about Microsoft (http://www.mercurycenter.com/columnists/gillmor/docs/dg042498.htm).
 
Readers not familiar with the niceties that differentiate Mecklermedia from IDG can be excused for not understanding why any of this matters. But they might want to know that when they click Netscape's Netcenter for news on Disney's purchase of Infoseek, they will see a report by CNET (http://www.news.com/News/Item/0,4,23322,00.html?st.ne.ni.rel), which recently closed a huge deal with Disney's rival NBC. Thanks to CNET's strong disclosure policies, they will see that Disney also gave Infoseek control over its Starwave unit, which it bought from Paul Allen, an investor in CNET. But they won't see that CNET owns a search engine company that competes directly with Infoseek.
 
What do you think? Tell us on the OJR Forums.

 


Matt Welch Matt Welch is an OJR Staff Writer and Columnist. His work is archived at mattwelch.com.


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