(A photo from a Business Insider story.)
This was interesting: Felix Salmon, the Thomson Reuters journalist blogger recently used his blog "Felix Salmon- A slice of lime in the soda" to attack Business Insider, the news site based in New York City and founded by Henry Blodget, a former Wall Street analyst (now barred).
Mr Salmon didn't attack Business Insider personally but allowed Ryan McCarthy, a colleague to write this post: Business Insider, over-aggregation, and the mad grab for traffic.
The article was in response to news that Business Insider had raised about $7 million. The 60 strong Business Insider reports that it has more than 12 million pageviews a month, a very strong showing.
Mr McCarthy writes that some of this pageview count is built on the work of others and that some Business Insider stories are mostly rewrites of other news stories.
Take this article, for example, which employs one of the site’s characteristically amusing headlines “IT’S OFFICIAL: The Recession Has Created A New Lost Generation.” ... it’s a flat-out rehash of a strong piece by the AP. So far, Business Insider’s piece has attracted 4,600 views, per their stats.
The AP summarizes new Census data, which can be found here, talks to economists and provides very valuable analysis of what this new data says about our economy. Very little of this is readily apparent from the Census news releases, by the way. The AP reporter, Hope Yen, did the hard journalistic work of sussing out these figures.
What does Business Insider’s piece offer? By my count, the piece reprints seven datapoints from the AP’s article. It offers one link to the AP’s piece, and no link to the Census department’s latest release. Nor does it offer any original analysis, context or information.
Mr McCarthy examined another story about an NFL running back and found a similar lack of original content (why did he not question why Business Insider is running sports stories, or stories featuring scantily clad women, such as above?)
He acknowledges that Business Insider also has good original reporting. He praises Joe Weisenthal and his reporting on Wall Street, and says that Henry Blodget "can be a great blogger."
But he wonders, "Why does Business Insider risk undermining all that highly original, distinctive content," when it "over aggregates" original content from others?"
I can answer that one. It's because of the economics of the online news business.
At the start of the year Mr Blodget revealed Business Insider revenues for 2010 were $4.8 million. The profit was just $2,127. This is not a profitable venture.
This is why Business Insider "over aggregates" news stories written by others, and it's why it has pictures of young women -- it's trying everything it can to attract pageviews. Why? Because that's what pays the bills.
For example, it takes me a good part of my day to drive to a company's office and interview their CEO. If I count the research and the time it takes me to write up the interview, it's a full days work. Yet that interview earns me one pageview per reader, two pageviews if I split the article into two parts.
Or I could write a post about someone else's story, such as this post. It took no travel time and I managed to research and write it in about an hour. It earns one pageview.
In an advertising supported business, a pageview is a pageview, original or not.
One of the failures of the Internet...
We have no good mechanism for recovering the value of a news story online. It's one of the great failures of the Internet. This is what Felix Salmon and others should be pointing to, it's the reason Business Insider does what it does, not because it wants to but because that's the nature of the online news business.
The problem is that most journalists don't know the economics of their own business, they have been sheltered from that knowledge by the wall that separates editorial departments from the commercial side of the business. That's why journalists are puzzled by the "over aggregation" they see at Business Insider, Huffington Post, and other places.
And what they don't realize is that this situation is getting worse. The value of a pageview continues to fall, it is ever harder for online news sites to make money just from their content, they have to move into conferences and other revenue streams.
We desperately need to figure out a business model for online news that rewards good journalism. We need to develop a value recovery mechanism for journalism otherwise we will be in big trouble.
Software engineers talk of garbage in, garbage out. If your data is bad your results will be bad no matter how good your coding.
We need good journalism so that we can make important decisions as a society about very important subjects: energy, economy, education, environment, elder care. And that's just the issues that begin with the letter "e" there's plenty of other important subjects.
If we don't have good journalism then we will make bad decisions. And special interest groups will have a very easy time of spreading disinformation and pushing their own agendas at the expense of the public good.
It'd be great to see other journalists taking up this issue. I've been warning about it since I left the Financial Times in 2004.
I suggest that Messrs Salmon and McCarthy follow the money, they'll get a much better story and then they won't be puzzled why Business Insider does what it does.
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[Also, it might be better to look at why the VCs are investing in Business Insider when they usually invest in startups with far higher profit margins. Are they hoping to gain media coverage for their other investments?]