The Quest for Online Profits

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As someone in the same young business, I was sure Word's playful commitment to a multimedia experience was the wave of things to come. But original content was still seen then as the way to make money. The near-term future proved far less creative than I had imagined, and original content was soon being viewed as an economic dead-end in online publishing. Around the same time, traditional news organizations, worried about losing their hold on the information business, were scrambling to get online. For the most part, these enterprises traded in nothing more than "shovelware"—the daily paper or the nightly news packaged in a multimedia frame.

When she's asked why mainstream media companies weren't—and still aren't—taking more risks, Word editor Marisa Bowe points to staffing. Many traditional media outlets have tried to expand online by converting staff members into techies, she says, with unspectacular results.

"The people who understand this medium usually spent their adolescence playing video games or hanging out in MUDs [multiuser domains] or BBSs [bulletin board services]," Bowe explains. "They usually aren't socially adjusted enough to pursue careers like mainstream media jobs. So what happens instead is that the youngest and least successful journalists already on staff [at traditional media organizations] are the ones who are willing to work on the Web. And the results are hacky." (Before taking over at Word, Bowe was one of the leading players at ECHO—East Coast Hang Out—an online community popular in New York bohemian circles.)

Whatever they try, online media have yet to figure out how to make money. In the early days, the belief was that Madison Avenue would quickly turn this explosive new communications form into a wildly effective venue for their messages, but online advertising generally has been a qualified success at best. The truth is that the companies bankrolling Web sites are, for the most part, seeing rivers of red ink.

But unlike traditional publishers, who assume at least five years of losses for almost any startup, online investors expect profits from their ventures fast. Their impatience has accelerated the speed at which Web sites feel pressured to reinvent themselves. Gone are the days of developing a product and steadily building it over several years; online these days we're talking months. Of course there are exceptions—Salon, the high-quality think site for the intellectual set, comes to mind—but by and large this is a frenzied industry desperately trying to justify its existence by inventing the next big thing.

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