Tuesday, just after the New York Stock Exchange bounced in and out of the 500 point pothole, an interesting item appeared on the blog site for the U.S. News & World Report. In it, senior writer James Pethokoukis asked the interesting question:
"Did the Drudge Report help tank the stock market?"
In fact, there were a number of other, more likely, causes, ranging from Alan Greenspan's warning that morning about a possible impending recession, falling durable orders and housing sales, rumors of China instituting a capital gains tax, etc. But still, Pethokoukis's question was intriguing.
As he noted, Matt Drudge has enormous impact both on America's leaders, as well as its journalists, both groups regularly clicking in on his web page throughout the day (it's been my home page for the last five years).
Drudge first made his name breaking much of the Clinton-Lewinsky scandal, and though he was vilified by the mainstream media then, he's been a must-read ever since. With his site, his radio show and his carefully constructed Walter Winchell look, complete with fedora, Matt Drudge, though he has gained some legitimacy, remains the great news source that no one talks about.
Strictly speaking, the Drudge Report is not a blog, but an aggregator site. That is, he and his team comb multiple news sources of their own - on the web, wire services, blogs - around the world and then post links to them. Part of the appeal of the Drudge Report is that it is one of the last refuges of good old-fashioned tabloid headlines.
On a given day, the Drudge Report may contain thirty or forty sentence-long headlines, the most important ones in red, all under a single major headline in large, bold type. On the really big breaking stories, especially the ones still emerging, Drudge will even post a flashing siren on the screen . . .and you better believe every journalist in America notices. So do a lot of other people: the Drudge Report can get 20 million hits per day, and is currently running more than 4 billion hits per year.
All of this is back story to what Pethokoukis thinks may have happened on Tuesday. It seems that former Federal Reserve chief Alan Greenspan gave a speech in Hong Kong on Sunday in which he said, reasonably, that this being one of the longest economic expansions in recent years inevitably certain countervailing forces were growing that would inevitably lead us into the next recession. In particular, said Greenspan, U.S. profit margins were beginning to stabilize, and that was a classic indicator of an economy that had peaked - suggesting the beginning of a recession in late 2007, perhaps 2008.
Not exactly earth-shattering. A lot of people are saying the same thing - heck, you read the same thing here a couple weeks ago. Greenspan wasn't saying anything shocking; on the contrary, he was being his typical prudent and opaque self. You can turn on any cable financial show right now and hear a lot more apocalyptic predictions.
Indeed, the story was so unthrilling that it appears only AP covered it - and, contrary to its current reputation, actually managed to write a balanced and objective story. And, as you might expect, it produced little more than a shrug from the financial markets.
But that's when Drudge stepped in. For no obvious reason, he decided to link to the two day old AP story. He then attached one of his classic scare headlines: "Greenspan warns of likely U.S. recession." Personally, I love stuff like that - it harkens back to the good old days of newspapering and the vastly underrated age of yellow journalism - and if the viewer chose to read the term 'imminent' into Drudge's words, and then link through to the AP story . . .well, bully for Matt. That's his job, and he does it better than anybody.
But Pethokoukis's item, and the story behind it got me thinking about the nature of the news in the Internet Age.
One thing I've noticed in my own behavior - and most other folks I know who spend their days sitting near a computer (i.e., almost everyone) is that we are in a perpetual race to get to the news as early as possible. You can understand this attitude amongst, say, day traders, for whom timing in everything. And yet, in a sense, we are all day traders now, wanting the news - especially the important, breaking news - the instant it occurs.
The result is a behavior that I can only describe as "surfing upstream". That is, we surf the cable stations on television even as we race around the net, trying to capture the latest update the instant it appears . . .and we are frustrated and furious over any delay.
The problem is that in going this far up the news cycle, we are also usually by-passing all of the standard intermediators that we normally depend upon to do our filtering for us. Some of this is understandable: the closer we get to the actual news events themselves the more obvious it becomes just how biased the coverage has been in the past. Needless to say, that's led to a lot of disenchantment with the traditional media. And rightly so.
Yet, by surfing ever further upstream, we go past not only analysis to news to breaking news, but all of the way to the raw information streaming off the event in real time. Think of it as a curve that goes infinite as it approaches the asymptote of the actual event itself: Downstream, in the world of long, leisurely feature stories and news analysis, the current is wide and slow and fairly predictable. But up at the source, information and data is blasting out of spillway like an immense firehose; all is confusion, energy and chaos.
Most of have neither the time nor the inclination to navigate against this torrent; yet, that is precisely where most of us want to be. The result is a paradox, and one that is rapidly destroying traditional media.
Put simply: we want the news as it happens, but we also want it to be intermediated by some sort of objective, professional news filter. The Internet, cell phones and digital cameras have gotten us unprecedentedly close to the real-time unfolding of news events around the world. But only rudimentary institutions - notably the blogosphere -- have yet appeared to deal with the problem of filtration. Thus, our current behavior: channel surfing cable news, dropping into places like the Drudge Report fifteen times per day, and bouncing around the Web to the blogs we trust the most.
It also suggests why the traditional media are in such serious trouble. They have not only read the problem wrong, they have read it exactly wrong.
At the dawn of the Web, of cable news, and of people like Matt Drudge, newspapers, network television and news magazines, realizing that they could no longer compete in terms of timeliness, decided to go the opposite direction into feature stories, opinion and analysis. The result, as we've seen over the last decade has been what can only be described as a desperate rear-guard battle by the traditional media. Watching circulation, then ad revenues fall, they have mostly responded by cutting back on staff. Veteran reporters and editors have been given golden parachutes, newsroom staffs have been slashed, and young reporters simply haven't been hired.
The result? I get a call every few days essentially offering one of the local Bay Area papers to me at 1958 subscription prices. Meanwhile, after years of disparaging Drudge and the bloggers (a job now assumed by the New Yorker), newspapers and magazines have now decided to imitate them. It's profitable, but it still misses the mark
The message coming from us upstream surfers; from those millions of people who read Drudge every day - and who may have almost thrown us into a real recession -- and from those tens of millions of bloggers out there linking like crazy to a handful of breaking news stories; is not that we need fewer news filters, but that we need more. The problem with what happened on Tuesday was not the presence of Matt Drudge, but the fact that there aren't more folks like him, offering a wide range of snarky, mischievous and fun headlines.
If newspapers could do it over again, they should have sold off their physical assets, hired more reporters, editors and freelancers at a lower initial salary, opened more news bureaus around the world (if only in the form of solitary stringers working out of their apartments) instead of shutting them down, and demanded more hard news reporting from their reporters and a lot less editorializing and analysis.
If that sounds counterintuitive, so is the entire history of high tech. Every time a threatened industry has tried to survive by adopting the new paradigm it has failed. The only solution is to come up with an even newer paradigm of your own.
That's what Matt Drudge did, and now it seems he can move the entire world economy. When was the last time a New York Times headline did that?
TAD'S TAB: I recently came across a site called BuzzDash. Basically, it allows you to vote on a range of topics, including entertainment, news, and even philosophy. For example, a recent vote asks: "Assuming there's life in outer space, are they smarter than us?" 59% voted 'I'll bet', while 41% voted 'I doubt it.' All it takes is a free registration, and you are set to vote -- even create your own survey, called a "buzzbite", for others to vote on.