I was a Bubble Asset, or, The Rise and Fall of Biz Journalism

By Edward Cone

These have been interesting times for business magazines and business journalism in general. That’s interesting times as in the ancient curse, “May you live in interesting times.”

Business journalism is at this moment trying to recover from a dizzying rise and a crushing fall.

In the two decades I’ve been a business writer, the job has gone from semi-obscurity to the hot center of popular culture and partway back again. Recently, those of us who practice the trade have tracked the same trajectory as the economy we cover: boom to bubble to bust.

For most of my career, business writers were specialists writing for a specific audience. Then for two years, we were rock stars. And then the bubble burst, and we were un-indicted co-conspirators in one of the great financial meltdowns in the history of the world. These days, a word you often hear attached to “business journalist” is “unemployed.”

As it happens, I’ve had a pretty good view of these changes. Not really through any doing of my own--sometimes I feel like Forrest Gump, just sitting there on my bench as interesting times unfold around me. That’s been true since the beginning of my career at Forbes magazine in the mid-‘80s.

I didn't set out to cover business. When I graduated from college my only plan was to move to New York and be a writer. But on the night before I moved, I visited my first cousin twice removed Ceasar Cone II, and when I told him about my plan he said in that sweet way of his, "If you're going to do something so damn stupid as being a writer, at least do something they'll always pay you for." He suggested business.

At that point, remember, we’re talking about a much smaller universe of business publications than we have now. There were the three major national magazines, each with its own niche—Forbes for investors, Fortune for long boring profiles, and Business Week as news digest. Until 1980 the Wall Street Journal published a single section, without any of the fluff and filler that fill out four sections today. There were more specialized publications for investors, but they were even further from the mainstream.

On TV, there was one fulltime business reporter, Irving R. Levine, the guy in the bow tie. Most nights the business news consisted of the anchorman reading the Dow results as he went to a commercial.

Forbes practiced a rigorous type of journalism. My first job was as a fact checker, a job I’ve compared to the job of the guy in the circus who follows elephants around with a broom and a bucket. You check the work of senior staff, and if a mistake made by senior staff gets into print, you got fired. A favorite Forbes headline for hot-stock stories was “Trees don’t Grow to the Sky.” And they’d somehow get these operators and shady types to pose for a picture on their boat, then run the caption, “But where are the investors’ yachts?”

But Forbes was also part of a trend that was bringing business journalism into the mainstream. Malcolm Forbes had created the Forbes 400 list of richest Americans, which helped push his magazine into the mainstream and make celebrities of wealthy business people. People who had never picked up a business magazine picked up that issue—still the best-selling issue of Forbes each year.

Mr. Forbes was also busy branding his name and his magazine as much on lifestyle as on business analysis—he had the chateaus and the balloons and the Harleys and the jet and the yacht and Liz Taylor, he got his name in the gossip columns and People magazine. He was a celebrity himself, much to the benefit of his magazine.

Meanwhile, the culture was changing around us. Lee Iacocca’s autobiography was a big hit, Wall Street was booming, even nighttime soap operas centered on tycoons—the subject matter of business journalism was becoming more mainstream, too.

And so were business journalists themselves. Former colleagues from Forbes would jump to more popular venues—to name just two of them, Allen Sloan, a brilliant financial writer who taught me to read the footnotes in a financial statement, moved to Newsweek, and Allan Dodds Frank, one of the true wildmen of the profession, became the investigative business reporter at CNN.

A big driver of business journalism’s growth was technology. By the end of the ‘80s, Forbes had a deal with a new cable channel called CNBC. We’d write an article, and they’d put us in a car and send us over the bridge to New Jersey, and we’d make a quick tape about the story. That was fun, and good publicity, but it had to come at a cost—there’s no way you get the depth of information from a two-minute TV blurb that you get from a full-page article.

Technology would of course remake the business, and I was fortunate to find myself with a good view of the action. In 1989, I married the cutest reporter in the Forbes building, and we decided to quit our jobs and move to Paris to work as freelancers. And we would have put the “starving” in “starving artists” pretty quickly, except for a phone call I got early on from a business and technology trade magazine based in New York, which wanted me write from France.

So for the next couple of years, I traveled around doing interviews in two languages I didn’t speak that well, French and computerese. And by the time we moved home to raise a family in 1991, I had a specialty in covering the use of technology in big companies, and the business of the technology companies themselves. That came in handy as the ‘90s went along, and the boom kicked in, and the demand for business news exploded. As a freelancer I was able to support a family and live where I pleased.

And now there were dozens of cable channels, and there was the Internet to provide an almost limitless number of outlets for business news, as well as a whole new industry to write about and invest in. New business magazines were springing up, too, mostly rooted in technology but definitely competitive for ad dollars with the old guard—think of Upside, Wired, Red Herring, Business 2.0, Industry Standard, e-Company Now, and so on, as well as a huge number of trade publications.

There were big stories to tell—one of the most important being the rise in productivity across the economy, due in part to information technology. And there were major new companies, and ways of doing business, and ways to get rich.

But it was about a lot more than that. Business people became celebrities far from the world of business. You had Jeff Bezos of Amazon.com as Time’s Man of the Year, and Bill Gates as a modern John D. Rockefeller. Jack Welch’s divorce got as much publicity as a Hollywood star’s.

I’d go to the Style and Cut shop on Georgia Street and the TV would be showing Maria and Ron from CNBC instead of Barney and Andy from Mayberry.

Inevitably, this proliferation of business journalism outlets created a bubble market for business journalists. I was fortunate enough to participate in this phenomenon. I was, in fact, a bubble asset. It was great.

In 1999 I had gone on staff at Ziff Davis’ Interactive Week, which had made me an offer I couldn’t refuse, and I got a call from Wired, offering me what was essentially a full-time contract, which was something I really couldn’t turn down. So I went to my editor at Ziff and said I was leaving, and he said, don’t go, just do half as much work for the same salary. And Wired was fine with that, too, as long as I delivered features to them.

I’ll let you in on a secret. I work pretty hard. And after years of doing it, I’m pretty good at what I do. But I ain’t that good.

The same market conditions meant that a lot of stories were getting written by people who had never read a balance sheet, much less a footnote, or were too young to remember Mike Milken or any previous downturns and scandals.

Quality went down. The journalists lost their standards. The Wall Street Journal –the bible--kept running articles by that guy Glassman, claiming that the Dow was on its way to 36,000. We don’t hear that much from Glassman these days. And the Journal seemed to devote as much energy to a political agenda and its expanded lifestyle coverage as it did to covering business.

Nobody wanted to look like they didn’t Get It. I remember Forbes running a stylish black-and-white photo of some barefoot Internet visionaries, trying to look like one of those new economy magazines that were as thick as phone books at the time…and it just didn’t feel right. It was like seeing your dad put on a gold chain and try to date younger women.

But it wasn’t just the writers and editors—every link of the information chain was broken.

The industry analysts all drank the Kool-Aid. I remember when a company called Webvan announced that it was going to spend $1 billion to remake the grocery business, one analyst tripled his estimate for the online grocery market on the strength of the press release. Nobody stopped to ask where Webvan was going to get $1 billion. Webvan and the analyst firm are both gone now.

The folks who really should have known better, the Wall Street analysts, weren’t telling journalists or investors what we needed to know—they were busy pimping for their investment banks and trading recommendations on telecom stocks for recommendations to get their kids into fancy Manhattan private schools.

The venture capitalists out in Silicon Valley were just Wall Street guys in casual clothes.

And of course the CEOs and CFOs of quite a few large companies were just plain lying about their numbers.

And you, the consumers of business journalism -- you didn’t want to hear the truth. There were plenty of people writing stories that showed varying degrees of skepticism, but they were called party-poopers. Everyone in this room secretly thought they would find a chair when the music stopped.

I remember where I was when I knew it had to end. It was on the eighth fairway at the Broadmoor resort in Colorado Springs. Ziff Davis had flown the whole staff of Interactive Week out there for a retreat—maybe 60 people, from our new editor in chief, just hired from the New York Times, down to the junior assistant art director, all comped for golf and the spa.

The previous year, our staff had numbered about 25, and we had gone to a perfectly nice place in the Napa Valley where we paid for our own golf.

So out there on the golf course I turned to the editor I was riding with and said, This cannot last. This is not how writers live. This is how ad sales people live.

It was July of 2000. I was off by three months. The bubble had sprung its fatal leak in mid-April—just days, as it happened, after Ziff Davis was acquired for several hundred million dollars by an investment firm that planned to add new magazines and websites and TV shows and then flip us for a fat profit in a few years. That hasn’t worked out so well.

Now I got to see the implosion of a bubble-era business plan from the inside. We staffed up for a while, then started throwing people overboard. They closed the magazine I’d been writing for, just two months after my department there was shuttered and I was transferred to another ZD publication, which is why I have a job today. The number of employees went from about 1100 to 450, and last summer we narrowly avoided bankruptcy.

One sign of how out of hand things had gotten was that they were handing out stock options to writers. At our last meeting, I asked a senior Ziff Davis official what my options were worth, and he said: “Confederate money.” He was wrong, of course, because you can still sell Confederate money on eBay.

And of course it wasn’t just Ziff Davis. The Journal and Forbes and AOL Time Warner and everyone else laid off hundreds, maybe thousands of journalists. My contract at Wired prohibited me from writing for a dozen or so magazines, most of which are now out of business, which helped make my contract look pretty dated. CNN canned my old mentor from Forbes. The entire publishing business entered the worst depression in its history, and business journalism was ground zero of that disaster.

So here we are today. I do think cousin Ceasar was right all those years ago, there will always be jobs in business writing. It’s a bigger industry now than it was when I started, if a lot smaller than it was two years ago.

ZD is doing OK. I had lunch with our editor in chief on Monday, he said that the only thing that could really hurt us now would be something external, beyond our control. Like a war, for instance.

And I think there have been some lessons learned. Business journalism today is more sober, and clear eyed, and rigorous than it was in the recent past, even as fewer people trust it or even pay attention to it anymore.

I’ll leave you with a prediction: this new sobriety and seriousness of purpose will last, at least until the start of the next bubble.

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Last update: 4/16/2003; 4:37:58 PM.