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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | FEBRUARY 19, 2001 PERSPECTIVE By Heather Green Hype Addiction: It's One Tough Habit to Kick When Internet execs upbraid journalists for reporting bad news, they're proving that the industry still prefers rosy fantasies to unpleasant truths
These are the kinds of questions that I've been getting recently, not only from public-relations people but also from company executives I speak with for stories. The implication -- sometimes offered quite directly -- is that reporting on struggling Net companies or their layoffs adds to the problem. They'd prefer we didn't draw attention to the plight of certain companies or dig further to understand what led to the downturn in online advertising. Some people in the industry would rather we reporters ignore their problems and focus only on the promise of the Net. It's a Panglossian way of looking at things -- and it's nothing new. Every industry wants bad news to go away as soon as possible. What's different, though, is the sense that bad news about the Net spreads faster and so has a bigger impact than negative stories about other industries. Somehow the technical aspects of the Net -- such as the network effect and viral marketing -- make things even worse, or so the idea goes. The potential effect, say, of Amazon.com laying off people is assumed to be 10 times greater than news of job losses in another industry since the downsizing is reported broadly online to a public that continues to be fascinated with the Net. The natural conclusion, or so the argument goes, is that responsible journalists should fight the bad-news momentum with stories of scrappy companies doing well. PARTY PLANNER. Nothing demonstrates this feeling about the special effect of the Net -- and the need to combat the allegedly unfair tide of bad news -- better than a recent newsletter discussion. In early February, Michael Tchong, founder of the Iconocast service that dishes up statistics, news, and debates about online marketing, issued a call to arms. His gossipy e-mail, titled the "Jacobyte," urged 50,000 recipients to revolt against bad news. The timing is worth noting: Tchong's missive came on the heels of Walt Disney Co.'s decision to shut its Go.com portal because of the downturn in online advertising, and Disney CEO Michael Eisner's downbeat comments about online marketing. The time had come, Tchong wrote, "to take a very active role in trying to stem the growing negative tide...We know the Internet was material in helping propel itself to lofty heights. This same engine is now hard at work spreading negative news. Call it a viral lack of confidence." It's not just a general alarm. Tchong has a plan of attack. He's now trying to drum up support for a "World Confidence Tour" in cities around the globe where true believers in online marketing would share "survival blurbs, or cogent observations of why the Internet market and marketing will thrive." The whole thing, writes Tchong, will be "capped off by a theatrical evening spectacle and mega-schmooze party." The goal of this event, he explains, "is to revive the flagging interest in a medium we know is going to dominate the future." The guest list would include "all leading analysts, press influentials, investment bankers, venture capitalists, and traditional marketing executives." Tchong's plan to highlight what is going right with the industry isn't a bad one. But he's offbase in assuming that the way news is written, read, and interpreted these days is propelled by a negative momentum equal to the positive kinetic power that created the frenzied hype of 1999 and early 2000. He's also incorrect in thinking that the way people interpret the meltdown of Net companies is being intensified by a "viral lack of confidence." LESS GULLIBLE. The reason he's wrong is precisely because the marketing aspect, which was key to building the frenzy, is missing in this downturn. Quite simply, there aren't squads of marketing people out there talking about how awful this is, or how bad that is, or sending out press releases filled with gory details about recent layoffs and company blowups. People have learned to be skeptical by seeing companies shut down, not by being fed hype. Tchong's view on the news demonstrates how spoiled everyone was by the adulation of the past few years. The reality is that the public has grown less gullible. So the viral marketing of positive news isn't going to redeem the promise of the Net. The Net doesn't deserve blind acceptance -- and won't get it anymore. It has to prove itself. Until that happens, the last thing people in the industry should be doing is trying to market Net euphoria to the masses. That's how they got into trouble in the first place.  Heather Green covers the Internet for BusinessWeek in New York  | | |
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