Silicon Insider: As Newspapers Die, Is MySpace Next?

March 16, 2006 — -- It's got to be pretty depressing when even your country cousin doesn't want you in the family anymore.

The big news this week in the so-called dinosaur media was the announcement that hapless and struggling Knight-Ridder has finally found a buyer for its stable of newspapers. The good news for KR shareholders (though apparently not for the stock market) is that the deal is for $4.5 billion in cash and stock.

The bad news, at least for old Knight-Ridder types, is that the buyer is the McClatchy Co. In the cosmos of California newspaper publishing families, it has always been the Chandlers (Los Angeles Times), the de Youngs (San Francisco Chronicle) and Ridders (San Jose Mercury-News), with the McClatchys (Sacramento Bee, Fresno Bee) as the bumpkin relations from the Central Valley.

Adding insult to acquisition, the McClatchys immediately turned around and announced that of the 32 KR newspapers it was acquiring, a dozen would be dumped immediately back on the market -- including such crown jewels of the Knight-Ridder family as the Philadelphia Inquirer and the San Jose Mercury News.

On the local news that night, a veteran sports columnist, and a contemporary of mine at the paper in the good old days, put on a brave face and said that no doubt there was a buyer out there that would love to own such a great newspaper with such a long tradition.

Perhaps.

Newspapers Demise Quicker Than Expected?

It was just a year ago that I predicted -- to considerable consternation and censure from the press -- that most major newspapers would be dead or dying by the end of this decade. Apparently, I was being conservative.

As I look around California, for example, I see the San Francisco Chronicle turning into the Daily Worker for baby boomers, the Los Angeles Times selecting stories based on political considerations, and now, the only real newspaper of any size left, the Mercury News, apparently orphaned. Meanwhile, McClatchy's strategy appears to be that of snatching up small-town papers, the last redoubt of daily print journalism. But that is just buying time before Yahoo and Google start putting local Little League box scores online.

As it happens, while all this was going on, I heard from an old friend, and one of the best business editors around, Dan Beucke. Dan worked with me at the Merc News and is now an editor at Business Week.

Needless to say, the conversation eventually came around to our old employer. Have I heard, he asked, of any Silicon Valley tycoons who might want to buy the Mercury News as a vanity project? After all, he reminded me, the paper is still very profitable. Why wouldn't someone see the value in balancing their growth-stock portfolio and, in the process, gaining their own editorial soapbox?

Then he answered his own question: "I guess it shows how far beyond print the techies are these days."

What's the Upside?

Exactly right, but I'd go one step further: Why buy a business, no matter how profitable now, if it has no visible upside? Especially when, for the same price, you can invest in a half-dozen new start-up companies, one of which may end up 10 times the size of KR itself, much less the San Jose Mercury News.

As for gaining a soapbox: given the demographics of today's newspaper readers, the only people you'd be talking to are senior citizens. Ditto advertisers: unless you are selling convalescent home insurance or walkers, your customers have gone elsewhere.

Finally, and more seriously: Why would you spend all that money on buildings, printing presses and delivery trucks, when it would be far easier to raid the place for the one thing of value left at the modern newspaper -- its reporters. Just hire away the writers and let somebody else worry about the rest.

Am I being callous about the fate of newspapers? Oh, absolutely. I loved writing for newspapers and I was damned good at it. But I also remember that newsrooms were some of the most unpleasant and least-enlightened work environments around, with editors that treated reporters like children, management that looked upon employees as serfs, and toothless unions whose only gift was for impeding talent and collecting dues. So even as I shed a tear that newspapers may not survive the beginning of the 21st century, I'm also reminded that, in terms of human resources, they barely entered the 20th.

The world moves on, technology advances, and those things we always assumed to be permanent prove to be as transitory as mayflies. What is happening to newspapers today should be a lesson to their descendants -- online communities, blogs, portals -- about what will happen to them . . .tonight.

Is MySpace Next?

It is a dangerous mistake to assume that the new generation of content providers will have anything like the run of their print predecessors. Cycle times are too short now, technology is moving too fast, and there will never again be enough time for a new medium to embed itself so deeply into the culture that it will endure for generations.

In fact, for the new generation of media companies, the transformation has already begun.

I drive two high schoolers to school in the morning. One, whom I'll call Miss School Spirit, is a sophomore who lives next door. The other, my oldest son, Tad -- aka Mr. Pop Culture -- is a freshman. On Tuesday both announced, independently, that they had quit MySpace.com. Please note: These are Silicon Valley teenagers, the ultimate early adopters, kids who text message each other in class, and have moms and dads working at Apple, Cisco and Google.

Why did they quit MySpace? Miss School Spirit wasn't specific, but I think she was tired of the experience. And, since she is a song girl at school, there was probably also the creep factor that is beginning to characterize the site. As for Mr. Pop Culture, I've let him explain why, in his own words, below.

Is this merely anecdotal evidence? Yes, but in a hot new market driven by fads and peer pressure, anecdotes are just about all we've got. And the message in my pickup truck this week is that teenagers are moving on from MySpace -- even as many of you readers are just hearing about the site for the first time.

Actually, the closer you look the more obvious it is that some kind of generational change is taking place all across the Net, where the hot companies of just the last few years are already under siege. EBay is being challenged by a Chinese counterpart, Google is facing congressional inquiries and quickly discovering that its bumper-sticker business doesn't cut it in big, nasty world. Craig's List is realizing that maybe having no rules can turn your site into a brothel, and everywhere hundreds of new Web 2.0 start-ups are picking at the great Web 1.0 survivors.

Success has always been fleeting, but these days it's less a comet and more like a lightning flash -- by the time you see it, it's already gone.

And so those young Web masters of the universe, as they drive to work in their new Porsches, dreaming about stock options and market shares as they pass without noticing the unopened newspaper racks on the corner, might want to look at themselves in the mirror and whisper, "I'm next."

As the first of what will be occasional glimpses into the tech culture as seen from the world of teenagers, I asked my son, Tad, to write me an explanation of why he has quit MySpace. Here's what he wrote:

TAD'S TAB: Why did I quit MySpace? Because it is a parasite feeding off the egos and self-esteem of millions of teenage girls and boys. It's also an addiction: I find myself unconsciously typing in its URL every time I turn on Firefox. That's why yesterday I decided to escape from its clutches. Impulsively, I deleted my account.

Afterward, at school, I told my friends what I'd done, figuring they'd congratulate me on my guts. Instead, they looked at me like I was that creepy girl in Lit class. That's when I realized that Tom, or whatever his name is who created the site, had brainwashed us kids into believing that MySpace is the cure to all of our social inadequacies -- and turn on anyone who thinks otherwise.

So sure, MySpace has caused a revolution on the Internet, and in schools. But what kind? It's already apparently led to the death of two girls. And it's created an army of zombies out of my friends. So I'm glad I quit -- but I still think about it all of the time. And I worry about what I'm missing.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone, once called the Boswell of Silicon Valley, is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is best-known as the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public-television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com "Silicon Insider" columnist since 2000.