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| The Internet IndustrY Phoenix, ashes and in between, 2002-2007 |
| Sometimes you do your best work when provoked by someone writing something really stupid. In my case, that came when a national newsweekly that will remain nameless wrote in March 2002 that no one made money online except people selling financial information and porn. Even BusinessWeek's Silicon Valley star writer called the place Lake Doughbegone. Over the next year, I did a series of exclusive, contrarian stories that documented the emergence of the Internet as the highly profitable commercial marketplace and medium we know today -- changing minds, leading markets and establishing myself as a thought leader in U.S. technology reporting. When I read the aforementioned story, I knew from this story I'd done the month before that nearly everybody in online financial transactions, from stock brokers to mortgage lenders, was making money or soon would. But Internet bust coverage had descended into the same mindless groupthink Web-boom reporting had. To fight back, I did Break Out the Black Ink in May, independently analyzing the financials of every public Internet company to prove that 25 percent were profitable and 40 percent would be by the end of the year. One funny conclusion: Out of three U.S. public companies I could find that sold online porn, none made money at it. And only one public company selling financial information was profitable. By year-end, it turned out that I had been too conservative -- and this story was exclusive too (and followed by WaPo columnist Jim Glassman, among others). By August, we started the Real-World Internet Index, telling people the time was right to buy Web stocks again. It was nine weeks before Nasdaq hit bottom and a month after BW put a snarling bear on the cover when we told readers how to exploit a trend other people couldn't even spot yet. (Barron's, a few months later, weighed in with its April 2003 cover Bubble Redux, arguing that Net stocks were way overpriced. Fortune finally got around to its cover story on investing in the New Net Boom in 2006, by which time my picks had tripled). We also found a crop of other profitable startups no one knew about in 2002, because they were putting off going public amid the market's turmoil. They're still coming public now, emerging as leaders of as the next generation of Web companies. By April 2003, this arc of stories led to my first BW cover, The E-Biz Surprise. In 2004 came E-Biz Strikes Again, another cover. After that, the argument was basically over, and the seeds of Web 2.0 began emerging. Since then, I've covered a wide swath of the Web's development and its impact on society. I've written about the emergence of the search industry and how Google's expansion into local search was a dire threat to the Yellow Pages business (don't miss the sidebar, either), which has since become the first of Google's emerging businesses to make any material amount of money. I've documented that newspapers' 2007 loss of classified ads is a long-term impact of the Net, not the cyclical function of the housing bust publishers think. I picked up on a beta test of the Web's impact on TV advertising that ended up being key to Microsoft's $6 billion deal to buy aQuantive a year later, and showed how AOL's future would turn on an acquisition a major newspaper had dismissed in 2004 as a purveyor of penis-enlargement ads and spyware. That company is growing twice as fast as the rest of AOL's ad business, and is the linchpin of at least four deals AOL has made since my story (and has been mentioned in a dozen New York Times stories this year). I've also done some interesting speculation about the Web's impact on productivity growth and broken news about its effect on the $2 trillion a year health care industry. Even a little bit of Hollywood, in a piece Wired followed a few months later. There are lots of other examples: The E-Biz Strikes Again and E-Biz Surprise covers are all about how the Internet changed the broader economy. No one has really done what I do, as early as I've done it. My coverage has been contrarian, consistently early and completely accurate. Competitors repeatedly eat my dust. And I can help you make them eat yours. |
