Irrational Exuberance 1.0

Saturday, February 21, 2009 by Dave Winer.

Yesterday I posted one in a long series of screeds with a single-minded message to news organizations large and small: Open your newsrooms.  

The first time I said this explicitly was over nine years ago in a rambling piece I wrote in Amsterdam after attending Davos for the first and last time. The question I was asked over and over was how would news organizations make money on the Internet. My opinion was widely sought then because the dotcom bubble had not yet burst, we were still in the age of Irrational Exuberance 1.0 (version 2 would come thanks to Craig Cline and Tim O'Reilly). Looking back it was so weird, the people pressing me hardest at the famous Schatzalp Lunch on the closing day were CEOs of major investment banking firms. They also wanted to take UserLand public, which I ignored as a ridiculous concept, but I smiled at the idea, everyone likes to be appreciated. I didn't offer them hugs, but I wish I had.  

Back then (and still today) the only things I knew for sure were: 1. People's thirst for news and ideas was going up, not down and 2. The professional news organizations were not expanding to meet the demand, rather they were contracting. Therefore: 3. Something must rise to fill the gap. Beyond that, I could only guess how it would make money. Maybe they will make money by serving lattes to bloggers who work in their newsrooms. Maybe once there's a glut of conflicted points of view out there, the public will re-hire them to act as arbiters. I don't know. But as I said to Jay Rosen in an email yesterday, "Asking about business models now is way premature. First they have to restructure, learn how it works, and then we can figure out where the money comes from." 

At least the Times is using the right word these days -- open -- but not in the way that matters. They're willing to give away what we, in tech, have been giving away for a decade. Obviously that's not a disrupter. They need to give away what they have -- authority. The trick is to find a way to give it away without destroying it. If they can do it, then we will have cracked the nut, scale, massively more news, deeper coverage, and with it -- shifted economics.