Tag Archives: BusinessWeek
How strange is this? Tim Mullaney, the e-business editor at BusinessWeek, sends a detailed and exhaustive list of questions to Scott Blevins, Overstock.com’s director of public relations, via e-mail on Tuesday. The questions are intended for chairman and President Patrick Byrne and other company executives.
Byrne responds — I do not know when, but obviously yesterday or today — and proceeds to post his responses, as well as Mullaney’s initial questions, online. The executive wrote: “Since you did nothing to indicate the interview was off-the-record I am treating it as on-the-record (that is the journalistic convention, I believe), and so have reprinted your letter below. I trust also that you do not mind me responding in this public forum, as you also failed to stipulate otherwise (as some reporters have when they interview me by email).”
You can read the entire exchange here.
Byrne’s company also issued a press release this morning explaining why he responded on the Internet. The press release reads in part: “Had I not responded to Tim’s extensive questions, or had I responded privately, there is some tiny chance that he may have taken liberties with the truth. My responses also contain operational detail to which I feel all investors should be alerted. So given that Tim intended this to be an on-the-record interview, I treated it as on the record, and am publishing it myself first. Please know that the tenor and sense of fair-mindedness are absolutely normal for the group I have decided to confront. Please keep in mind when reading their work in the future that the only thing unusual about this interview was that (God bless the New Media) it was conducted in a fashion I could take directly to the public. Beyond that, res ipsa loquitur.”
For those of you who haven’t taken Latin in a while, that means “the thing speaks for itself.”
Does he not trust the business media that much? And when was the last time you saw a company issue a press release about its CEO responding to a list of questions from a business reporter? It’s not like Overstock’s shares are suffering. It’s stock had outperformed the S&P 500 and the Nasdaq in the past two years, according to this chart. And on Friday, its shares fell less than half a percent.
Maybe he responded in the way he did because of Mullaney’s past coverage. In March 2004, Mullaney began a story about Byrne and Overstock with this lead: “Patrick M. Byrne, chairman of Overstock.com, promotes his company as the place to shop online for prices up to 80% below list. But, Overstock may be overstating some discounts. Spot checks by BusinessWeek found close to 100 instances where Overstock misstated the manufacturer’s suggested list price on items like digital cameras, clothes, and TVs. The $240 million e-tailer carries about 12,000 items, outside of its huge book and music store. For a few, it undershot the list price. But most errors made discounts seem larger. ‘If they’ve falsely claimed what the manufacturer’s list price is, that’s not lawful,’ says Andrea Levine, a director of the Council of Better Business Bureaus. Byrne says there was no intentional deception. He blames most slips on manufacturers’ changing list prices.”
Now that Mullaney’s questions — and Byrne’s answers — have been made public on the Internet, I wonder if BusinessWeek will continue to pursue the story.
I have never seen a company or an executive respond to an interview request like this before, but I do know Byrne’s reputation as being combative with Wall Street. (In fact, check out the part of Overstock’s Web site devoted to the CEO speaking out against Wall Street.)
Byrne has also treated an e-mail from a New York Post business writer asking similar questions this week in the same manner. See here. Byrne and Overstock also issued a release about the Post questions, and noted that its reporter signaled that a story would run in the Sunday paper.
I’d be worried as a business journalist if I thought that all companies I dealt with were going to respond in this manner — it would eliminate consumers wanting to purchase our publications. But I think few CEOs would ever take such drastic measures in responding to a reporter’s questions.
The Web site at which these were found, www.thesanitycheck.com, thinks that some “market manipulator” has been planting these questions about the company’s cash flow and other accounting issues with the media.
My question is: What’s so wrong with that? If the investor has information that he/she thinks is important, then it’s the business media’s job to determine if there’s something to it. I don’t think any business journalist — particularly those at publications such as BusinessWeek and the New York Post — would take the investor’s words as gospel without checking them out first.
How soon we seem to forget that it was a hedge fund manager shorting Enron stock that initially tipped off Fortune reporter Bethany McLean to its funky accounting.
Strange times in the land of business journalism when the Internet/blogging becomes a public forum for a CEO rather than the more traditional means. Then again, Byrne is operating a non-traditional company.
Michael Fumento will no longer write columns for the Scripps Howard News Service after BusinessWeek Online disclosed that he had received $60,000 from agriculture company Monsanto, a topic of nine columns in recent years. Fumento has been very pro-biotechnology in the columns.
Fumento denies that he has done anything wrong, and mentions that he criticized Monsanto in a 1999 column in Forbes. But Monsanto helped fund a book he wrote about the biotech industry, and such relationships between business interests and columnists have come under increasing scrutiny in recent years.
Here’s a copy of his most recent column, which went out on the Scripps Howard wire on Jan. 5. It includes this passage: “Now consider some of the approximately 30 crops in the development pipeline of a single company, Monsanto of St. Louis. Many of these will primarily aid farmers but actually help all of us by keeping prices down and allowing more crops to be grown on less land, thereby leaving more land for nature.”
Here is a link to the November 1999 column in Forbes. In it, Fumento writes: “Why did Monsanto turn chicken-hearted? Because it has a huge amount at stake in biotechnology, and it is very much on the defensive these days in the public relations arena. Monsanto has been devastated by the backlash that the greens have whipped up against its biotech crops.” That’s still seems pro-biotech and pro what Monsanto was trying to accomplish.
Read the BusinessWeek Online article here.
Fumento has been a legal writer for the Washington Times, editorial writer for the Rocky Mountain News in Denver, and was the first “National Issues” reporter for Investor’s Business Daily. In 2005 he reported from Iraq as an embed with the 2nd Marine Expeditionary Force in Fallujah.
Maybe it’s just me, but the smart thing to do always as a columnist is to divulge any sort of financial relationships to your boss. For reporters, there’s a stricter guideline since columnists voice their opionions and business reporters are supposed to be objective. I personally have always felt as if you couldn’t write about any company or industry in which you were an investor or had a personal interest. The one time I had to deal with this as a business reporter, my editor told me to go ahead and cover the story.
The one stock I have owned — power company Southern Co. — was received from my grandfather’s estate, and the one time I was asked to cover this company — the CEO giving a speech about downtown Atlanta development, not the energy industry — I went to my editor to make it clear that I owned this stock before I covered the speech.
Hesseldahl notes that on Tuesday, AP issued a one sentence NewsAlert about Apple beginning to ship computers with Intel chips in them.
Says Hesseldahl: “It’s the first time in my memory that a product announcement by Steve Jobs has caused the AP to send an alert — especially since this development was fully expected. And it says a lot about the intensity of media attention Apple generates. When is the last time a NewsAlert went out based on the words of Michael Dell or Bill Gates? Clearly, the AP’s editors determined this news was important enough to warrant such action.”
He later adds: “When I see Jobs interviewed on TV, he remains so irritatingly on-message, reporters seem almost sorry to do their jobs and change the subject by asking an off-topic question, about his health, or about something unrelated to the message of the day — say concerning the state of relations between his other company Pixar (PIXR ) and Disney (DIS ). He rarely opens up to publicly reflect on his life, which both deepens the mystery and heightens the curiosity.”
Some would say that the Apple coverage today is reminiscent of the coverage of the Internet industry from the 1990s, and we all know where that got business journalism.
That’s according to an article posted today on the BusinessWeek site by media writer Jon Fine.
Here are some snippets: CEO John “Koten’s memo said profitability in 2006 was unlikely, and goals for this year involve halving 2005′s loss and doing that again in 2007.
“‘If we can accomplish that…we should have a good shot at breaking even or turning a profit three years from now,’ wrote Koten. Joe Mansueto, who made his fortune as founder of Morningstar, has spoken about the magazines in similar terms, says an executive who has discussed the situation with him.”
And this: “In 2005, Inc. posted 817.4 ad pages, and Fast Company had 477. In 2000, by contrast, Inc. ran 1,735.3 ad pages, and Fast Company boasted 2,126.2. This nets out to cumulative ad page declines of 52.9% and 77.6%.
“Mansueto purchased the magazines in June of last year for around $34 million, plus the assumption of certain liabilities — some $500 million less than what G+J paid for them. Ironists take note: $34 million is roughly equivalent, according to the reckoning of executives and published reports at the time, to the combined profit of Inc. and Fast Company in that long-ago boom year of 2000.”
To read the entire story, go here.
According to this post on Take Back the Times:
“Also, we hear that Nancy Cleeland, who shared in a Pulitzer Prize for the series about Wal-Mart, no longer has her labor beat, and the Times will not have a replacement soon, according to Russ Stanton, the section editor. In short, the Times, going back to the anti-labor positions of years ago, will not have a labor beat.”
I have long argued against this trend. Labor is an important beat that too many business sections are ignoring, and that’s a shame. They’re basically telling a sizeable percentage of their audience that they don’t care about them. I thought newspapers were worried about losing readership. Well, it’s decisions like this that cause them to lose readership.
For those of you looking to improve your labor coverage, here’s a great resource from Cornell University.
Professor Christopher Martin at Northern Iowa argues that the media today frame labor issues in a way in which the actual concerns of organized workers are ignored. Labor stories are written from a consumerâ€™s perspective, Martin states, trivializing the concerns of the workers while emphasizing the effect of strikes on consumers who want to purchase the goods and services produced by the workers.
As labor reporting stands today, it is a minor part of business journalism despite the fact that 12.9 percent of all working people in the United States belong to a union, according to statistics from the U.S. Department of Labor. That number is down from a high in the 1950s, when approximately one-third of all workers belonged to some union. The decline in overall union membership has led to the closure of hundreds of labor publications, including the 2002 demise of the Racine Labor, a newspaper in Wisconsin that existed for 60 years and provided an alternative to the local newspaper.
And while the mainstream media have been criticized for ignoring good labor stories, there hasnâ€™t been any movement to add coverage. Labor writer Michael Hoyt argues that â€œa lot of good labor stories are simply ignored. A rich harvest goes to waste.â€? Daily newspapers, weekly news magazines and nightly news broadcasts regularly cover strikes, but without strikes, coverage of labor issues is scant.
One notable exception has been the movement to unionize Wal-Mart stores. William Serrin, a former labor reporter at The New York Times, argues that most editors donâ€™t know or care about labor reporting. â€œIt was just something you had to have in the paper, like obits.â€? Even when labor is covered, unions defending worker rights is called â€œtroublemaking,â€? while the media like to tell workers to learn to live with layoffs and that treaties such as NAFTA will help them.
There is perhaps no part of business journalism that needs to be re-examined more than labor reporting. In the early 21st century, BusinessWeek and The Wall Street Journal are the only media outlets that cover labor extensively. Open any other printed media or watch the nightly news, and youâ€™ll rarely see a story about labor. With more than 15 million potential readers belonging to unions, the media needs to revisit their past â€“ primarily the past of labor newspapers â€“ and look at how labor was once covered and consider adding more stories.
There are plenty of interesting and informative labor stories to cover that would give society a better picture of why unions are declining in membership and what many union leaders are doing to combat newly aggressive corporations and industries, but there are few media that want them, believes Serrin.
Jon Friedman writes the media column for Marketwatch.com. He’s a former Bloomberg and BusinessWeek reporter. His recent column on what’s In and Out for 2006 includes this:
Who’s in: Fox Business Channel
Who’s out: CNBC
It’s not exactly front-page news any more to say that Fox is moving forward with a plan to create a rival to CNBC. Rather than wilt in the heat, CNBC has (finally!) tinkered with its lineup and presentation in an effort to look brand new. It’s admirable but it may be too little too late if it eventually has to fend off Fox. If history is any guide, Fox News chief Roger Ailes, who ran CNBC in its heyday, will steamroll his foe. I doubt that Fox’s new business channel will achieve a first-round knockout, but CNBC had better beware. Ailes will scratch and claw to gain an advantage and he isn’t above (or below) fighting dirty. The man just wants to win. And he almost always does.
Read the entire posting here.
Yes, it is that time of the year again. The end of the year stock story. The Dow Jones Industrial Average ended 2005 down slightly, while the S&P 500 and the NASDAQ were both up slightly. Virtually every business section I’ve looked at online this morning led with this story, and most of the business news web sites have also led with this story.
TheStreet.com’s story was a little better, taking more of a forward looking spin. You can read it here.
BusinessWeek’s online story about the markets was pretty typical of the coverage I saw. It can be read here.
I am typically a big fan of Floyd Norris in the New York Times, but his coverage of the markets in 2005 that appeared this morning was nothing spectacular. It can be read here.
Bloomberg News focused on the market’s worst drop — on a weekly basis — in nearly three months. Its story is here.
Why do I point all of this out? Because I believe that business journalism overall is not doing its readers a service by focusing on how the market does in a calendar year. That’s not how investors and the general public invest, so why should business journalism be talking to readers in a time frame that means nothing to them.
I understand the need for business journalism to be able to give readers a benchmark, but I think we’re overemphasizing what happens in the markets on a calendar year basis. Just my two cents.
Happy New Year to everyone.
According to a recent report from the Audit Bureau of Circulation, business magazines Forbes and BusinessWeek fell short of their stated circulation promised advertisers. You can read about it in Jon Fine’s On Media blog.
To date, the circulation scandals had been primarily confined to daily newspapers, so these revelations are not too good for the magazine business and for business journalism. When biz magazines don’t deliver the circulation that they promise advertisers, then they can’t charge as much for advertising as they had in the past. And when they can’t charge as much for advertising, the revenue falls. When revenue falls, the bean counters get nervous and want to cut costs. And we all know how they’ve been cutting costs recently — by cutting reporters and editors.
I also wonder if the circulation drop at BusinessWeek, where I used to work, had anything to do with the announcement earlier this month that they were dropping the Asian and European editions.
Oh yeah, Merry Christmas.
BusinessWeek, the largest business magazine published in the world, is cutting back. The New York-based magazine, which got a new editor earlier this year, announced that it was cutting its European and Asian editions at the end of the year. It will keep its overseas bureaus, but now the focus will be on providing specialized content online for readers in these areas. I saw one report on this that there would be some layoffs.
Business Week has a circulation of 980,000. Its international edition sells another 190,000 copies.
Here is the text of the press release:
BusinessWeek Announces Repositioning in Global Markets
Wednesday December 7, 9:28 am ET
- Single Global Print Edition and a Focus on Online and Local Language Editions –
NEW YORK, Dec. 7 /PRNewswire-FirstCall/ — In order to most effectively meet current business and customer needs and to strengthen the franchise for future growth, BusinessWeek announced today that it will reposition its approach to global markets. A greater emphasis will be placed on providing online news, analysis and information and on developing local language publications while maintaining a single flagship print product.
“We have decided to create robust, customized Asian and European versions of our popular BusinessWeek Online Web site, while delivering a single global edition of BusinessWeek magazine instead of providing separate regional versions,” said Stephen J. Adler, Editor-in-Chief of BusinessWeek. “We are taking this action to harness the growing power of the Web globally and to serve readers and advertisers in a more timely, efficient, and targeted way.”
“BusinessWeek is dedicated to maintaining a strong international presence and we see a great deal of opportunity for our business,” said William P. Kupper Jr., President, BusinessWeek Group. “The enormous growth we have seen in Online suggests a great opportunity for BusinessWeek. By aligning our resources more strategically to those areas where we see the greatest demand, we can enhance BusinessWeek’s growth prospects and expand our international presence in key markets.”
* A single global edition of the print magazine will now serve readers and
advertisers across North America, Europe, Asia, and other global
markets. BusinessWeek will keep its network of international bureaus to
maintain the breadth of its news coverage but will discontinue the
European and Asian editions as of December 30.
* BusinessWeek will bolster its online coverage of global markets to
provide more robust and timely news and information to its growing
international online audience. Customized online editions for Europe
and Asia will be created as well as vertical content areas such as
business education, design and innovation, and small business.
International visitors to BusinessWeek Online have nearly doubled in the
past year and today represent approximately 25% of BusinessWeek Online’s
* BusinessWeek will continue developing regional partnerships to expand
local language editions in key markets around the world. Demand for
local language editions is strong. Currently, BusinessWeek publishes in
the following countries: China, Poland, Indonesia, Russia and Turkey.
The Arabic edition just launched in October 2005 and the Bulgarian and
Romanian editions are scheduled to launch in the first quarter of 2006.”
As a former BusinessWeek staff member, I can only imagine what some of the people in the international bureaus are thinking right now. I would not be perceiving this as good news if I were in their shoes. The expansion of BusinessWeek into various editions across the globe was part of former editor Steve Shepard’s focus while at the helm for 20 years and part of the strategy to make BW the ubiquitous source for business news. What happens to all of that content that was in these overseas print editions? I’m guessing that putting it online doesn’t give it the same amount of readership.
What I also find interesting is that McGraw-Hill, the parent company, was selling subscriptions to European Businessweek for $55/year and in Asia at $90/year when the price for a U.S. subscription is $45.97/year. See price list here. Maybe the folks in marketing needed to reassess the pricing structure?
I woke up Monday morning to a breathless report on NBC-TV’s “Today” show about Cyber Monday being the biggest online shopping day of the year. Later in the day, I saw other online reports about this shopping event, which equates to Black Friday for the retailers.
Here are some of those stories:
1. Reuters story available here.
2. CNN/Money story available here.
3. Video of an MSNBC story can be found here. After going to this page, look on the right-hand side of the page where it says MSNBC TV Video and click launch.
4. Chicago Sun-Times story available here.
There are many others. Just set your Google or Yahoo! search to “Cyber Monday” and read all of the stories.
Only, Cyber Monday doesn’t exist in reality, according to some actual reporting done by a reporter at BusinessWeek, Robert Hof. His excellent debunking of this myth can be read here. He notes that Cyber Monday is only the 12th-best online shopping day. Wow. So where did these other stories come from?
How does a story like this gain legs? Is it the public relations spin from the Internet retailers, or their association? Or are reporters hearing about this supposed “phenomenon” once and then believing it as the gospel?
Maybe this myth is about to be busted. I see where Red Herring is also noting that this story is just PR spin. It’s story is available here.