Choose your bedmates wisely

When partnering with advertisers, content sites need to be careful to avoid conflicts of interest

This column appeared in the Dec. 31, 1998, issue of The Industry Standard. Here’s the version on the Industry Standard site.

By J.D. Lasica

These are the Web’s Woodstock days. From small startups to corporate behemoths, the name of the game is to bed as many partners as possible.

It’s finally dawned on online publishers that they can’t just put up some wickedly cool content and expect the world to beat a path to their Web sites. Without distribution, you’re dead. Which is why companies are hopping into bed with one another faster than you can say Powered by AT&T WorldNet. Check out the roll call of recent partnership deals: Lycos with Barnes & Noble. Mindspring with CNN Interactive and CNet. Excite with Music Boulevard and SportsLine USA. Yahoo with everyone.

But what happens to your editorial credibility when you build a virtual love shack with a major business player?

Consider, for example, Microsoft’s MoneyCentral personal finance site, which launched Oct. 14. Microsoft handed over a large chunk of editorial real estate to Merrill Lynch for an undisclosed wad of cash. “That’s one of the reasons financial institutions are excited about it, because their content modules are integrated into the page,” says Amanda Young, product manager for MoneyCentral. “We’re providing a unique opportunity to go beyond buttons and banners.”

The trouble is, only a discerning user can tell which is paid content and which is not. (Sample article: “Inside Trader — Place orders to buy Bear Stearns and Merrill Lynch. There’s value in the brokers.”)

“There’s a fundamental difference between information provided to get at the truth and information provided to persuade someone to do something,” says Bill Doyle, director of money and technology strategies at Forrester Research. “Journalists prefer the former and marketers the latter. Consumers have understood that fundamental distinction in newspapers and magazines, but that Chinese wall is being perforated on the Web. Attempts like this to gray the line don’t bode well for the end user. ”

Microsoft is hardly the only company that hawks its financial content to the highest bidder. (Check out almost any search engine, or America Online, which raked in $75 million last summer to spotlight three companies in its Brokerage Center.) But it may come back to haunt them. This is like turning over Expedia’s flight reservations channel to United.

“In the end it won’t serve Microsoft well because the quality of the user experience will suffer,” Doyle says. “They’ve ceded control of their content to an advertiser.”

Consider the current mating dance between Wired Digital and Charles Schwab, the online discount brokerage house. For the past several months, Wired has been playing ardent suitor to Schwab’s fickle temptress.

According to two sources at Wired News, here’s what is under discussion: A co-branded page sponsored by Schwab with aggregated business headlines, story summaries and stock prices provided by Wired. In addition, Wired News would beef up its Internet financial coverage by hiring two full-time contract reporters with proceeds from the deal.

That provision — where Schwab would essentially pick up the salaries of reporters covering the Net business beat — raised a few eyebrows in the Wired Digital newsroom. An editor who broached the subject at a staff meeting was told the discussions were still preliminary.

Schwab won’t comment on “potential alliances,” but Wired spokesman Andrew de Vries says, “The deal is still on the table,” unaffected by Lycos’ purchase of Wired Digital in October. De Vries waives off concerns about a potential conflict of interest. “It’s not an issue because of the strong divisions between our marketing and editorial staffs. We make it very clear to our partner that they have no influence over editorial, and we make it very clear to the user what is editorial and what is advertising. Our editorial vision is grounded in old-school journalism.”

Perhaps so, but arrangements like this give journalists — of whatever school — the willies. They smack of potential collusion and conflicts of interest.

Certainly, news outlets in cyberspace should not have to meet a higher standard than old media outlets. But it’s also true that news executives on the Web often are so wrapped up in the business of driving eyeballs and watching the bottom line that they sometimes pay less heed to one fundamental truth: Credibility is our only currency.

I’ve been in the news biz long enough to know two things:

In general, reporters are the most independent-minded SOBs on the planet, and there’ll be hell to pay if an editor or publisher tries to go easy on a news subject because they’re an advertiser, sponsor or other master of the universe.

But I’ve also seen enough examples where journalists pull their punches or shy away from probing areas where a little sunshine would turn up unsavory practices by a corporation. Reporters are the same career-minded dupes as you or me, and sometimes they decide, Rocking the boat just isn’t worth the hassle.

It happens. Not often. But if it happens just once, it makes us all a little poorer, less trusting, and less informed.

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JD Lasica
Written by JD Lasica
JD Lasica is an entrepreneur, author, journalist, photographer and blogger. | CONTACT