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The Internet Interest Bubble

By - March 03, 2011


A couple of days ago I was speaking with Reuters reporter Connie Loizos, who’s been covering the Internet space since the days of the Industry Standard (she worked at the Red Herring). She was working on a story questioning whether there was a new bubble brewing in our space, a question that many have asked in the past few months, in particular as it relates to private financings of startups. You can find that story here, on PEHub.

As readers of this site know, I don’t believe we’re in a real bubble, at least not the kind that popped in late 2000 (or the housing bubble, which seems still to be popping). But that’s not the interesting part of our conversation. Connie asked if I thought the press was in part culpable for our collective obsession with sky-high private company valuations, “hot new startups,” and the like.

Of course the answer is yes – there’s an “interest bubble” of sorts – but the answer is nuanced. And nuance is something I’ve found in short supply throughout the Internet ecosystem – at least in what we’ve come to call “the press.”

So let’s break it down. First off, what is “the press”? If you define it as “responsible journalists working diligently at their craft” then I’d submit we no longer have an information ecosystem dominated by “the press.” Indeed, we have a ton of great reporters doing their jobs – probably far more now than we had even at the height of the first boom. But the overall conversation is no longer dominated by their work. Instead, we have migrated to a more free-wheeling discourse driven by any number of interested parties. As it relates to the Internet industry, that means VCs and entrepreneurs promoting or angling for investments or promotion (or souring a deal they didn’t get a part of), bankers trying to influence any number of outcomes, and sources within all manners of companies pushing their own agenda on Twitter, Quora, or in private conversations with bloggers and other media outlets.

The tweets, conference utterances, and blog posts of these sources are instantly turned into “news stories” by the post-cambrian publishing explosion of sites covering the narrative that was once the province of first-generation Internet magazines like the Industry Standard (that’s the prototype of the first Standard above). And of course, I celebrate this explosion – Federated Media has been central to the business model of most of these second-generation sites, either as former partners (Ars Technica, TechCrunch, Digg, Reddit and soon Mashable) or current (Business Insider, Read Write Web, The Next Web, VentureBeat, GigaOm and scores of others just in the tech space alone).

But while I love the role these publications play in our information processing, it seems we’re failing to evolve past the first few stages in that process. Sources hint or brag or dish, then those tidbits are quickly worked into stories. But where’s the bigger picture? Where’s the hold-on-a-minute-let’s-think-this-through-and make-a-few-phone-calls-and-see-how-it-develops approach? Where’s the conceptual scoop? The second-day (or even second week) analysis?

To be fair, every single publication covering this space does wonderful analysis, from time to time, but their bread and butter is chasing what Connie called “the echo chamber.” Lately, that chamber has gotten very, very large – millions upon millions of people visit these tech news sites, because the narrative they chronicle is more important than it’s ever been. Our industry impacts a huge swatch of society and culture, and increasingly is understood to be the core driver of pretty much all of business today.

I’m extremely proud that this story has gotten to the point of so much interest and so much coverage. But are we paying attention to the right things? I’m not sure we always are. I sense a big opportunity to create a new kind of publication, one that has at the center of its brand a thoughtful and deeply informed point of view. I’m not sure how such a site might become profitable in this current era of page-view driven publishing, but I’m relatively certain that could be figured out. I for one want to read this publication, and I wish it existed.

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10 thoughts on “The Internet Interest Bubble

  1. Aldo Castaneda says:


    I’m not really in the media business but I am passionate about publishing (in the form of a podcast for now) information about the value of personal data and the development of infrastructure that supports an individual’s control of it.
    And, as I begin to see increasing levels of activity (and complexity) in the personal data infrastructure “space”, and the myriad approaches being developed to enable people to extract more value and/or exert greater control of their information, I’ve been thinking that those of us that are well informed in this space need to find, economically viable ways to provide people with is as you say “thoughtful and deeply informed” perspective that instructs and informs people about the value of their information and the various options they have (or will have) to control, store and exchange value for it.

    If this is the general type of “publication” you are referring to, recognizing that you were not referring to a narrow domain/topic as I do above, I for one, would be very interested in exploring potential models to enable such a thing.



  2. Eric Risley says:


    We are working to bring a bit of informed analysis to the ecosystem via our small efforts. We’re an M&A advisory firm,, which publishes M&A-centered analysis freely available via our website, twitter, facebook, linkedin, RSS or email.

    Our most popular effort is called M&A Alert which is intended to provide a concise, thoughtful assessment of specific transactions within the internet | mobile | digital media sector. We publish two/three per week currently. Take a look at

    Our business model is simple. Freely share our publishing/research/insights with anyone who wants it, build relationships and ultimately monetize via M&A advisory assignments. It’s the old Wall Street research model but our “clients” are not Wall Street institutional investors but senior executives, entrepreneurs, VCs and anyone with a stake in the sector we focus on. We’ve just begun to start talking publicly about our efforts.

    Take a look. We’d love feedback.

    Eric Risley

  3. sandthii says:

    Hi John, I’ve been thinking that those of us that are well informed in this space need to find, economically viable ways to provide people with is as you say thoughtful and deeply informed perspective that instructs and informs people about the value of their information

  4. Martina says:

    Sources hint or brag or dish, then those tidbits are quickly worked into stories.

  5. lasu says:

    I think better we begin to see increasing levels of activity (and complexity) in the personal data infrastructure “space”, and the myriad approaches being developed to enable people to extract more value and/or exert greater control of their information

  6. Aldo Castaneda says:

    I think the solution here involves software, software that supports making each “story” a mini-collaborative business. The features of that software would include:

    1. A role of an Executive Producer (EP) who creates/develops the overarching story-line.

    In my case my “story line” would be something like “Personal Data – Emergence of a new asset class”

    2. An interface to allow the “EP” to publish that story line, which includes “sub stories” enabling writers, videographers, pohdcasts and bloggers to make contributions to the story.

    3. A shared “dashboard” that allows the collaborators to the story, to work together and monitor the story’s popularity.

    4. A method to equitably distribute the profits of the story to the contributors. It should, presumably be easy to determine which aspects of the story are generating the most traffic. As the story grows more elements could be added – live events, sessions at conferences…etc.

    5. The new “Publisher” I’m proposing develops the software that enables the above. It would take a piece of the profits resulting from the success of the micro-businesses (stories). In addition it would be able to see over all traffic flows which would then allow it to focus more resources towards stories and methods of publication that are most popular…the meta-story.

    In short, we need to turn the notion of a publishing enterprise upside down if we want a fundamentally different form of “reporting.” Rather than concentrating resources around the creation of a publication (with dedicated staff etc – traditional model) we need to move to a model (for this type of in-depth “reporting”) wherein the investment is made to allow stories themselves to grow into micro-collaborative businesses in and of themselves.

  7. Mirko Lorenz says:

    over at Nieman Journalism Lab we published an article that aims to provide a future perspective. But it’s based not on attention, but on trust. Trust is a scarce resource now and monetizing it will be both challenging and rewarding, if done right.

    The method to distribute earnings could well be an equation of earned trust, not the worst of all measures.

    Article here:

  8. Aldo Castaneda says:


    Maybe I missed it but your article doesn’t define trust, does it? I ask because I’ve been involved in digital identity (my area of interest) discussions for a long time and the notion of trust always rises to the fore sooner or later. But, I’ve found that, it’s a devilishly elusive term and I’m not sure the answer to producing thoughtful “reporting” has anything to do with it. I think what’s needed is a platform that enables people with passion (not objectivity) for a subject collaborate in ways that are mutually beneficial both in terms of developing a story around their area of interest and provide economic incentives for doing so. Trust really isn’t a concern of mine because content that is merely a thin veil for what is actually marketing will quickly be exposed and the audience will quickly route around it. I think that in a world in which information increasingly flows freely trust/reputation/authenticity becomes must be “baked in.”

    So, in my simple “model” above, the Executive Producer for a theme/topic area would be wise to weave opposing views and perspectives into the story because doing so will establish credibility. Presumable a developing theme/story must be able to withstand opposing views.

  9. Aldo Castaneda says:


    Isn’t that part of the problem? We have great tools for expressing our individual thoughts and perspectives (which is great) but there’s little in the way of infrastructure that enables true collaboration toward the development of complex overarching themes. So I think we need both tools and economic models to enable this level of collaboration.


  10. Hi John, I heard you’ll be interviewing WP’s Matt Mullenweg this coming Friday in Austin. I have a question I wish someone would ask Matt. Is there a way I could submit it to you, if you were interested?
    Thanks in advance.