Content Remains Alive and Well on Internet

Content sites, the Internet sites that provide news and information as their main business, have been in the dot-com doghouse since April, when the market for online stocks plunged.

But ask whether content is dead, and you’ll likely get a forceful response from Merrill Brown.

“I can’t believe people are going around saying that,” said Brown, editor-in-chief of the MSNBC news Web site. “I certainly don’t think content is dead. Look at everything that people want to do with the Internet, bringing all kinds of data through broadband, down to cell phones. It’s all about content.”

Brown may be right, but he’s arguing from a position of strength. MSNBC, with backing from Microsoft Corp. and the NBC television network, never had to worry about funding in the way other sites do.

Following layoffs at online magazine Salon and the bankruptcy of the news site APBnews.com, it’s clear the shakeout that has shut down a number of electronic commerce sites is also working its way through content companies.

“No doubt about it, it’s hard to be independent these days,” said David Card, an Internet analyst with New York-based Jupiter Communications. “The pioneering days of the Net are all but over. I’m bullish on the content business, but only when people have a reasonable scope in mind.”

Gone are the days when a company like CNET, which was formed as a scrappy technology news site in 1994, could grow into a media powerhouse.

Back in the early days of the Web--all the way back in 1995 and 1996--content was king. The relatively low costs--or at least the perception of low costs--and potentially massive audience drew both media giants and small startups.

Sure, they were losing money, but wildly successful stock offerings more than made up for it. Investment money was plentiful.

Then came this spring, when technology and Internet stocks lost much of their value. Venture capitalists, whose investments dramatically dropped in value, became much choosier about who they would support.

“Last year, we easily closed a $20-million round of funding,” said Mark Sauter, co-founder and chief operating officer of APB Online Inc., the 2-year-old parent company of APBnews.com. “We had more money offered to us than we could take. That all changed over a few days in April.”

Salon decided to drop its travel section, letting go 13 employees. APB is now awaiting a decision in Bankruptcy Court on whether it can continue operating.

But, as Brown pointed out, other content sites are fine.

“APB is a partner of ours and I have enormous respect for them,” Brown said. “But I think they were a bit too aggressive in the scope of what they wanted to do.”

Scope has become a mantra. Think big, but start small. APB had part of it right--its journalism won three prestigious awards last year--but may have been overly ambitious in wanting to become, as Sauter put it, “the leading company for crime and justice content in any and every medium.”

“In the end, it all comes down to good journalism, no matter what the medium,” said Michael Kinsley, founder and editor of the Microsoft-supported Slate magazine. “Sure, we are blessed with very deep pockets. But I’ve always run this place as though we weren’t. The psychology, I think, has helped us remain fresh and competitive.”

But Kinsley did have the luxury of dropping subscription charges for Slate, something he instituted when the site was launched in 1996. The decision, carried out in February 1999, proved to be a good one--the site went from several hundred thousand to several million readers, Kinsley said.

Many sites tried the subscription route in the early days of the Web, but the ones that succeeded, like the online arm of the Wall Street Journal, already had a strong brand to attract customers.

Yet today, a new content site called Inside.com, which provides specialized news and data on the media and entertainment industries, plans to charge monthly subscriptions for its content--something that was considered a failure early on in the history of the Web.

“I wanted something like Inside.com to exist for my own personal use, and it didn’t,” said Inside.com co-founder Kurt Andersen. “Our ambition is to be the Wall Street Journal of this part of the marketplace.”

The subscriptions and the content of Inside.com haven’t scared investors. The independent company closed on its second round of financing earlier this year, though Andersen noted that Inside.com missed the market troubles by mere days, signing off on the funding April 17.

“Our timing, through sheer dumb luck, was amazing,” he said. “We managed to get our funding five minutes before it would have become impossible.”

One of the areas nearly guaranteed to get funding is in the delivery of high-speed content--interactive video and audio feeds--instead of mere text. Brown said MSNBC plans to invest heavily in interactivity and video, hoping that as more people adopt high-speed Internet connections, such as DSL phone lines or TV cable lines, they will want more control over what they see.

That’s also the premise behind a new venture called FeedRoom, which recently received $30 million in funding from a group of “old” media investors, including NBC, USA Today and Tribune Co., which owns the Los Angeles Times. The site hopes to be the hub for the new high-speed Internet, providing news feeds on demand to users--thus proving that content doesn’t die, it just changes formats.

*

On the Net:

https://www.msnbc.com

https://slate.msn.com

https://www.salon.com

https://www.apbnews.com

https://www.cnet.com

https://www.zdnet.com

https://www.inside.com

https://www.feedroom.com