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Adventures in Silicon Valley
Hilarious and incisive, Michael Lewis' "The New New Thing" captures the elusive spirit of Silicon Valley.
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The business of funding tech companies has gone gaga for brand names and boffo deals. "Visionaries," though, may be out of luck.
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[10/15/99]

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You had to go through the first phase of doing what a print newspaper would expect out of their online department -- to see all the content online, the classifieds, advertising products available for them to sell. All of that's been done. Now, I think, there is great recognition that that effort is a nice thing and has been beneficial to the print business, but won't become its own Internet business in its own right if it doesn't take the next step of providing content that's not in the newspaper and creating ad products that won't be sold by the local newspaper channels, and driving traffic from sources other than the newspaper.

I think that is the key message of this regional portal product that we just launched -- none of the new features of it are newspaper-centric. It's created, essentially, a kind of template product that we now have to fill out through local content development efforts and creative marketing efforts. It's forcing us to take our business to the next phase -- which is to be an Internet-only product, and an Internet-only business model.

You've been thinking about newspapers and the Net for 10 years now. What is the difference between what you originally envisioned newspapers doing online and what you see today?

When I was at the L.A. Times a team of us approached the two graduate students that created Yahoo -- Jerry Yang and David Filo -- because when I saw Yahoo, I instantly said, "This is the future of the newspaper industry, where we won't create all the content but we'll be aggregators of it."

With that, we went down to try to buy Yahoo -- for $1.4 million. We were the first to offer them anything. I remember Jerry Yang saying, "How are you going to make money?" A week and a half later AOL offered them $4 million, and then they got really smart and got their own financial advisor and the rest is history. I think newspapers have focused a little too much on their own content on the Internet as opposed to leveraging that content and brand to make available anything consumers say they want when they are online.

I think that consumers online are in a more active mode, a search mode, find-what-they-want mode, as opposed to a sit-back-in-your-chair-and-read mode. That by definition means that the content requirements for Internet products are different. I think we're just now as an industry getting it.

If people don't really read and kick back online, what does that mean for traditional newspaper-based content? Is that going to go by the wayside to be replaced by informational-nugget and video content, especially once broadband gets here?

I think that you are going to see better and cheaper printers in the household that will be hooked up to the TV set on broadband. We'll need to create and partner for more of that kind of pithy, quick, short summary -- like content that is maybe a little more audio- and video-oriented. But people are going to want increasingly to have hard print copies of whatever it is they find on the Internet. It's like clipping articles out of the newspaper, which will be an opportunity for us to distribute interesting kinds of advertising as well -- coupons at the end of that printout.

Consumers have shown throughout history that they like to creatively combine media as they emerge, reading stories while they watch the football game. It's going to increase the consumption of both kinds of content, but we absolutely have to figure out how they work together better.

How do you compare working in the high-tech industry in the L.A. area to being up here in Silicon Valley?

When I went to business school at Wharton, half the people there wanted to move to New York because they felt that was the center of the world and they controlled the world through the financial markets. In Washington, D.C., I felt like I lived with people who thought they controlled the world through Washington politics and diplomacy. While I lived in L.A. I definitely lived with people who thought they controlled the world through international distribution of movies -- that they controlled the hearts and minds of viewers all over the world.

But now that I'm here, this is as passionate an area as those combined -- these people are actually convinced that they are changing the world. It seeps into every aspect of this community. That's the reason I came here -- this is my industry and there's no better place to be right now, if you can afford a place to live.
salon.com | Oct. 25, 1999

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