Give It Away.3

Up with the dot.com bubble

PART THREE

Early in 1996 as our workforce at HotWired expanded, we outgrew the original office, which was adjacent to Wired magazine, so we moved a block south to another converted warehouse at 660 Third Street.

For me, if the parallels from my time at Rolling Stone two decades earlier weren't already in my mind, they now became inescapable. From a window next to my desk at HotWired I could look directly into the office across the street at 625 where Howard Kohn and I had written our three-part series about Patty Hearst and the SLA (1975-6).

One of many similarities between the two companies was the almost constant stream of celebrities who wanted to visit us when they came to San Francisco. At Rolling Stone, it had been rock stars, of course, but also journalists, professors, actors and politicians.

HotWired was no different, but the visitors now included future billionaires like Bill Gates and Jeff Bezos, as well as virtually every other aspiring Internet entrepreneur on the planet. Also there were tech-savvy musicians like Brian Eno and politicians like Bill Bradley, a former Olympic basketball player and senator who was running for president. 

Among those who wanted to speak with me specifically were reporters from the Washington Post, Newsweek, the L.A. Times, Wall Street Journal, Reuters, NPR and the major TV networks. They marveled at the scene as I sprinkled web terms liberally into my sound bites, which made me sound like an expert.

But many of the reporters also confided to me that this whole scene made them uncomfortable because if the digital revolution succeeded it seemed likely to deep-six our profession. Not to mention what it would mean for our society at large.

I was hopeful they were wrong on both counts.

A quarter-century later, it’s clear my optimism was misplaced. The devastation to the media world is obvious for all to see. Just look around. So many newspapers have closed that in most cities it is a surprise to discover that one still exists. Exact figures vary but somewhere around 2,000 important newspapers have closed their operations since the Web started disrupting their business model circa 1994.

Old media companies couldn’t just “give it away”when it came to content. They needed the revenue from subscribers and sponsors and newsstand sales and classified ads to keep operating. One of the early harbingers of their doom was the overnight success of Craigslist, launched across town in 1995 by an unassuming fellow named Craig Newmark.

San Francisco newspaper executive Phil Bronstein reminded me many years later that I had warned him when Craigslist first appeared that he should try to get the Hearst Corp. to buy it. Apparently I said they they might regret not doing so later. That was a serious understatement.

TV and radio have suffered greatly from the digital revolution as well, losing audiences and advertising share. As have magazines. Book publishing has been decimated.

Meanwhile, the new media world has splintered into a thousand shards of digital sites catering to niche audiences and even more niche opinions. Losing the media industry was one thing. Losing our democracy is another. Fringe theories, conspiracy thinking, extremist movements have all flourished in the Digital Age, ultimately threatening our most precious freedoms in the process.

But that was not the story we envisioned back at HotWired in 1996.

At that moment, a stock market frenzy was making Internet millionaires out of 26-year-olds right and left. It was widely known that Wired, too, was preparing for its own IPO -- initial public offering — later that year. 

One of the documents I carried around with me as a reminder of where we headed was the Wired prospectus for potential investors. It described how Wired Inc. would help lead the rise of an Internet economy to become a global media empire.

No small part of that vision hinged on the efforts of our team at HotWired, since the kinds of multiples envisioned in the prospectus could never be generated by an analog magazine alone.

So at HotWired we were experimenting with a wide range of content strategies, including a search engine (HotBot), advertising models (the banner ad was a HotWired creation), the earliest web blogs (like Suck), interactive bulletin boards, audio programs (presaging podcasts) and digital video, which included a fledgling TV program called Netizen TV.

We also foresaw the future of interactive broadband video. We were involved with Microsoft and NBC when they created MSNBC with that in mind. I was among a small group of Wired execs who flew to New York during the negotiations that led to the cable network’s formation — we ate steak and smoked cigars and toasted a future we thought might include Wired and by extension each of us.

They were heady times.

For the first time in my working life, I held options to purchase shares in a company that would vest over time — four years to be exact. And as a vice-president, my holdings were large enough to potentially make me a modestly wealthy man in the process -- a prospect that had never even occurred to me before.

But hey, I’m getting ahead of myself in the story, which is much bigger than the fate of any one person. Back in 1996, pretty much anything still seemed possible.

(To be continued.)

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