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Mercury News Tries To Catch Up, After Being In the Perpetually Poised Position For Social Media

Early last month, San Jose Mercury News‘ executive editor Carole Leigh Hutton addressed the Silicon Valley daily paper’s 200 staffers to inform them that severe cuts would soon be coming. The newspaper’s difficulties were the result of what Hutton referred to as “the $6 million surprise”: the paper had revenue shortfall of $3 million and an accounting mistake overlooked $3 million in expenses. The Mercury News was already in dire straits, as Hutton was charged with fixing the poor circulation and disappointing advertising numbers the paper was experiencing.

While the challenges facing it are really no different from just about every other newspaper today, a BusinessWeek feature looking back over the past 17 years finds that the paper was perhaps better positioned than any other daily for the rise of social media. If all had gone as planned, the BW piece shows in great detail how the paper could have been a leader; at the very least, it demonstrates how the paper could have avoided some of the pitfalls that now threaten its survival.

The Memo: Robert D. Ingle was paper’s executive editor and on Jan. 19, 1990, four years before the first web browser was available to ordinary consumers, he wrote a memo to executives at Knight Ridder, at the time, the paper’s parent company. In a burst of almost amazing foresight, his memo envisioned the coming of online networks. Ingle, who retired seven years ago, presented a strategy Knight Ridder could adopt for its 28 papers and race ahead of the rest of the industry. The centerpiece of Ingle’s strategy was an emphasis on customizing the paper’s content to individuals. Additionally, he called for merging the print and online operations and creating new ad vehicles tied to both sides.

The Beginning: Being in located in the center of the dotcom boom alone was a boon to the Mercury News. And Ingle’s initially efforts attracted a measure of support from Knight Ridder execs. But his plans were never able to take hold, due in part, BW says, to Ingle’s lack of leadership abilities. Primarily, the decentralized nature of Knight Ridder’s papers fostered a collective mindset that was averse to change, as long as ad revenues related to the tech boom kept flowing.

The Downturn: Ingle was able to make some inroads, but no real change took place. Eventually, the dotcom bubble burst and then the terrorist attacks of Sept. 11 also hit the newspaper industry hard. Then, as the new media industry began its resurgence, chains like Knight Ridder were caught behind the curve. In March 2006, Knight Ridder sold its newspapers to company’s like McClatchy. (NYSE: MNI) A month after that, McClatchy sold several newspapers including the Mercury News to MediaNews Group. And it’s been struggling ever since. (This past week, Hearst bought a stake in MediaNews, giving it control of Mercury News and several other papers.)

The Reinvention: Citizen journalism advocate and former Mercury News staffer Dan Gillmor tells BW that he doubts that colleagues at the paper gave much thought to the blog he started there in 1999. Things have certainly changed as the paper is racing to redefine itself to meet the social media zeitgeist. Staffers proposing ideas very similar to ones in Ingle’s 1990 memo. One suggestion includes letting readers customize the online site according to their particular interests. For example, someone who values environmental news most, the paper’s online site could serve as a portal serving up eco-centric news. Hutton promises that the best ideas will be quickly acted upon and tried out before consumers for a final verdict. But the BW article leaves an unanswered question: can the paper focus on solving its intractable financial difficulties all the while trying out new experiments on readers?

6 Responses to “Mercury News Tries To Catch Up, After Being In the Perpetually Poised Position For Social Media”

  1. oy, I mean to say:

    in my opinion, as more media moves into the web, we’ll more than likely see people take a more passive – versus interactive – role. Given that IP convergence is on the agenda of most of telecom (which is the backbone of the web), it’s the inevitable outcome.

    it's hard to type into these little boxes and make sense :)

  2. @ CK, I disagree! I don't discredit taking tips from citizen journalists but that's not new and it's definitely not something you'll lose if you are hosting conversations around your articles. Tons of blogs get lots of tips without a formal structure for users to contribute beyond comments. But, I do think media (and everybody, really) has been horrifically overthinking interactivity, social networking, and doing the wrong things with it for some time now. I think there are lots and lots of examples of this in the current market :)

    I don't discredit the value of user generated content – but I think it's popularity online in part stems from there not being much other content prior to "web 2.0", except what was created by users (as no companies were putting $$ into the web at the time). It's too hard to monetize, control, etc. in my opinion to make it valuable, and as more media moves into the web, we'll more than likely see people take a more passive – versus interactive – role. Given that IP convergence is on the agenda of most of telecom (which is the backbone of the web), it's the inevitable outcome.

  3. Customized delivery, social media and user-generated content were written into the foundation of Knight Ridder Digital's platform plan in 2000-2001. The national team developing it was so ahead of the curve that those concepts didn't yet have their current names.

    It was about creating a centralized method of managing the rich newspaper content in ways that enhanced the online experience, in whatever ways content was being created.

    Tech bust? Yes, it definitely had an impact on people's perceptions about the viability of web publishing. September 11? Yes, it killed of some funding, but not as much as you would think. By that time, Knight Ridder's opportunity to become the market leader (pun intended) had already passed with plans left on the table.

    That's because the single biggest obstacle to moving the company forward was the ongoing pissing contest between the publishers and Knight Ridder Digital executives. And don't be fooled into thinking that it was publishers who weren't involved in the bubble — it was, but some of the fiercest opposition came from the most sophisticated markets. Interestingly, most of them remained, and many are still around with MediaNews and McClatchy. Oh, let's not forget Philly.

    And Patricia, forgive me, but you are flat-out wrong about user-generated content. It is the journalist's job to gather, analyze and present information, be it from interviewing people on the street to write a story, sorting through contributions by citizen journalists or designing avenues of delivery so audiences get relevant, factual and timely information.

    If ANYBODY has a responsibility to lead in this area, it is journalists.

  4. Sorry, but they have more than likely missed the boat that sailed a while ago. Jumping on "Social Media" because it is the current fad is a bad idea, they should just forget it, they missed their chance if they ever really had one.

  5. Ingle likely had plenty of conversations with folks in the valley who knew/had an idea of what things were going to be like. But for him to sugges thtta the paper should have customized its look for each reader is pretty cool. If the paper had maybe they would be in a better position but that wouldn't have stopped a 3 million accounting error. Ouch.

  6. This is a great article. I don't think they're far from being able to adjust and move forward. Lots of traditional media/journalists are gaining ground and doing better with this – Dean Takahasi is with the Mercury News and is respected and recognized voice in the blog world. They'd already have a head start with that. Aggregation and personalization is a good idea for the obvious reasons, and some point to that it'll bring in better ad revenue. But, I think traditional if anything, traditional media has to learn that there are many different ways to engage the user and find the right model versus going directly to one type as many do now. You can have community and interactivity in a lot of different ways, and different age demographics gravitate toward different ways of doing so, but I'm not sure everybody sees this yet. I believe the best fit for media/information is to generate conversations around its content. People passionate about these topics get into it, the session times get longer, and they come back to see what others are saying, you develop regulars, etc. Then, on top of it, others blog about what you've written about, etc. so you are more viral. Lots of print media is doing this well now.

    I don't personally believe user created content should have a place in media. I think it gives up too much of the control of your product/site and gives the user unnecessary power. User driven news tips could work, but i see it only as another feature, no need to be the central point. People dog ( but I think it's a good model of user driven news, as well as leveraging other platforms (twitter, facebook apps, etc.) to engage users. But, if I was working with the Mercury News I'd be focusing on getting people engaged in whatever I'm talking about.

    Just my .2