The media titans still don't get it

Corporate America lost billions on the Net. That doesn't mean the medium has no value -- but the moguls remain clueless about where it lies.

By Scott Rosenberg

Aug. 13, 2002 | You'd think that, in summer 2002, with the red ink of a thousand bankrupt dot-coms still bleeding across the stock charts, everyone could agree on what happened to the Internet. Big money poured in; a few got rich, many lost their shirts. Trend became gold rush became bubble. Pop -- end of story. Now, everyone, back to work!

That, at any rate, is how much of the commercial media world views the Internet saga. New technology thing came along. Couldn't figure it out. Seemed important. Threw a lot of money at it. Down a hole. It's over now, thank God.

And that would be the story's end, if it weren't for one stubborn fact that refuses to vanish -- instead it just sits there, center stage, after the curtain has dropped behind it, thumbing its nose at the booing crowd: The Internet itself hasn't gone away. Hundreds of millions of people around the world continue to bend it to their own ends, in chaotic, unstable and unpredictable ways. As a generator of instant wealth, the Net may now be a big bust; as a generator of instant ideas, it keeps thrumming along.

This is a difficult fact for our media culture to digest. The media cover technology on a predictable cycle -- a rhythm of hype and scorn that you can follow like clockwork each time a new wave of innovation sweeps the high-tech landscape. For nearly a decade, the Internet story has followed this arc; by all rights, it should be over by now.

According to "Bamboozled at the Revolution," a new book chronicling "how big media lost billions in the battle for the Internet," it is. After 300 grueling pages recording stunningly stupid corporate boardroom struggles, author John Motavalli concludes that "Web content is dead," "digital dreams have been deferred for 'broadband,'" and "AOL Time Warner will dominate."

In the narrow circles of New York media mogul-dom that are Motavalli's subject -- the same people who blew those billions because they never figured out what the Internet is -- his conclusions are the conventional wisdom (though AOL Time Warner continues to take a beating). With the Internet cycle over, who knows when the Next Big Thing to throw money at will come along? In the meantime, let's play golf.

But the same people who got the Internet business so wrong got the Internet story wrong, too. IPOs and e-commerce and "network effect" growth rates were dazzling ephemera. But while magazine editors' eyes were transfixed by the business's convulsions, big things were happening under their noses: E-mail was transforming the workplace and the social landscape. Personal Web sites became "advertisements for myself" for the masses. "Communities of interest" -- devotees of certain obscure handicrafts; critics of certain large companies; followers of certain public policy debates -- formed and splintered and reformed in numbers too great to compile. New galaxies of communication coalesced, far off the familiar big-media grid.

It's this story that's addressed by "Small Pieces Loosely Joined" -- an odd but wonderful series of essays by David Weinberger about how profoundly the Net is changing our lives. "Bamboozled at the Revolution" is trade-magazine reporting; "Small Pieces" is armchair philosophy. Still, you can learn far more about why and how the media lost their way online from Weinberger's musings on the nature of Web reality than from Motavalli's chronicles of boardroom chaos.

The crucial difference between these two books is that Weinberger focuses on people who actually use the Net -- whereas Motavalli concentrates on people who didn't, and probably still don't.

To paraphrase James Carville: It's the users, stupid!

Next page: We know who got bamboozled -- but who did the bamboozling?