A STRAW MAN TO MOTIVATE THE NEWSPAPER BUSINESS

Is Bill Gates the enemy? Maybe Cartoonist Walt Kelly was right

Is Bill Gates the enemy?

If you were at the opening day of Connections ’97, the annual conference put on by the New Media Federation of the Newspaper Association of America here in San Francisco July 18, you certainly would have thought so.

With bookend keynote addresses by Robert Ingle of Knight-Ridder New Media and Larry Ellison of Oracle Corp., the founder of Microsoft Corp. was painted as the newspaper industry's worst nightmare.

He's buying media companies! He's hiring reporters! He's going to monopolize the Web!

Inside, Correspondent L. Carol Christopher recounts some of the anti-Microsoft presentations at Connections (and I take a look at a couple myself), but there is an underlying problem with painting Gates as the enemy:

It sells the rest of our competitors short. Way too short.

However, Gates' reaction to the Internet is a good illustration as to why we should be concerned not only with him, but with the grand spectrum of potential and existing competitors.

When it became clear to many in the computing world that the Internet wasn't just a passing fad, they directed their products toward it. They based a lot of these products and directions on the assumption that Microsoft was too big, too entrenched, too immobile, to capture any market share in the Internet arena.

But Gates, who had derided the Internet in speeches and actions just months earlier, finally understood the potential of the 'Net – and the potential for Microsoft products (and profits).

He turned his company around, making it into an Internet company. Within weeks, Microsoft was creating a full-fledged 'Net strategy; within months, the company had not only acquired the rights to a web browser, but had built it up into one of the two best offered.

This leads me to remember a new executive who had come aboard the San Francisco Examiner when I was toiling in the fields of Hearst. He asked me (and a bunch of other young, long-haired white guys) what I would change about the Ex.

We all submitted our individual lists. A few weeks later, I had the temerity to ask what had become of these radical (and not so radical) suggestions.

"A newspaper is like a big ship," the exec said. "You don't just turn it on a dime. You've got to signal 10 miles out that you're going to make changes."

To use another water analogy, don't make waves.

Well, Gates and his ilk make waves. They do turn their ships on a dime.

And we in the newspaper industry have to learn how to do those things as well, if we're going to compete effectively.

That phrase – "compete effectively" – is going to become a mantra here at NewsInc. As the new owner, not only do I intend to compete with other providers of information about newspapers, but I will be encouraging you to learn to compete again, and showing how others have made the transition.

Most newspapers have forgotten how to compete. The near-monopoly papers have, through their limited markets and the profits of the ’80s, created a generation of newspaper executives who don't know the meaning of "competition." Not for stories, not for ads and certainly not for readers.

Inside, I take over the New(s) Media column this issue to explain some of the changes I intend to make to NewsInc.; I hope you'll take a minute to read it.

Aside from Connections coverage, also inside you'll find reports on second quarter earnings of publicly traded newspaper companies, how the Star Tribune of Minneapolis is competing (there's that word again) against Microsoft (and others), as well as how a longtime Stauffer executive has built his own newspaper group in suburban Detroit.

This discussion of Gates and competition reminds me of the classic Walt Kelly comic strip, Pogo. In it, the possum once determined the key ingredient in any competitive situation:

"We have found the enemy," Pogo said, "and he is us."

– David M. Cole

Inside ...
* Ingle profiles industry's friends and enemies at Connections ’97

From NEWSINC., Aug. 4, 1997, Copyright © 1997, The Cole Group. All Rights Reserved.