Starving to Death on $200-Million: The Short, Absurd Life of The Industry Standard
Author: James Ledbetter
Publisher: Public Affairs
Details: 272 pages, $26
Reviewed by TARA WEISS
These days, magazines launch and fail regularly. Talk magazine lasted two years, Rosie just a year-and-a-half. So why devote a 272-page book to the Industry Standard's quick rise and fall?
Because in its second year, the Industry Standard, the monthly magazine that covered the Internet economy, sold 7,440 ad pages and grossed $200-million. In its third year, it died.
James Ledbetter, the Standard's former New York bureau chief and editor of its European edition, attempts to explain that unlikely life cycle in his new book, Starving to Death on $200-Million: The Short, Absurd Life of The Industry Standard.
When the San Francisco magazine was launched in 1998, editor Jonathan Weber intended it to be "the Business Week of the Internet economy." It would do what the mainstream media didn't: cover the Internet business and the new '90s economy it created.
There were several other magazines covering the boom _ Wired, Red Herring and Yahoo Internet Life. But none was as successful as the Standard. Advertisers clamored to get space in the magazine. There were times when the business staff had to turn away advertisers because there wasn't enough editorial copy to accommodate so many pages. (And they feared readers would be intimidated by such a large book arriving in their mailboxes.)
The circulation was never astounding; it peaked at about 200,000. But the right people were reading it. Ledbetter describes several instances where he'd write about a company, and as a result the stock price would soar or drop.
"We moved markets; there's no question about it," Ledbetter said from London. He is now the business editor of Time's European edition. "I experienced that with the potential merger between Lycos and NBC. It was pure speculation that it might happen. But it added $350-million to the stock. When that deal fell apart, they lost another billion."
The book is part memoir, part business story, told entirely through Ledbetter's experiences. His critics say he didn't accurately capture the true impact and lifestyle of the Standard because he was, in New York and then Europe, too far away.
Ledbetter, who was the media critic for the Village Voice for much of the 1990s, describes the magazine's lavish spending habits, such as managers' encouraging staffers to get facials to reduce their work-induced stress. Editors flew around the world to tech and economic forums. There were extravagant roof-top parties (some sponsored by tech companies that either advertised in or wanted to be covered in the Standard).
He also muses about the company's decision to hire Herbert Montgomery as the Standard's CFO. The last company Montgomery managed went bankrupt, and he had no publishing experience. The Standard defended hiring Montgomery despite his track record because he was one of the few qualified people available; in the booming economy, everyone else had jobs.
Also criticized is Ledbetter's failure to explain the larger and often potent role the business media as a whole played while covering the Internet economy.
"It was a good way to frame the dot-com frenzy," Ledbetter says of his decision to focus solely on the Standard. "There have been a lot of books that capture the bursting of the bubble. But most of the books I looked at left me wanting. This is not meant to be a comprehensive summary of what everyone went through. The only way to organize it was to make it about my experience. That's not a flaw but a necessary way to write the book."
Throughout, Ledbetter is self-analytical and well aware of his flaws during his tenure at the Standard. He recounts going on television as an expert, commenting on various stocks, knowing that he wasn't always the right person for the job. In one instance, he agreed to discuss initial public offerings. He told the magazine's publicist to tell the CNNfn producer that he wasn't an IPO expert, but he agreed to do the TV interview anyway. In fact, he cut short a weekend vacation. Despite what he told the producer, CNNfn labeled him an "IPO Analyst." Asked a question about Bamboo.com, a company he knew nothing about, Ledbetter chose not to tell the interviewer that he didn't know the answer.
Instead he said, "Bamboo.com is a specialized technology and Internet company that does certain kind of currency exchanges. . . . I'm convinced it's an absolute winner."
"That was just completely wrong," he writes. "I was angry at the PR firm for setting me up to look stupid on television, and at myself for saying something I knew was wrong."
So what would he do differently?
"I would have pushed myself and my reporters to be three times more skeptical than we were," Ledbetter says. "The perspective that one now has: that investment bankers were saying one thing to the public, that the stocks are great stocks, and to themselves they were saying they were dogs. We should be pushing for independent analysis and looking for conflicts of interest."
(Optional add end)
When the dot-com bubble began to burst, the advertising slowed, too. Ledbetter is still puzzled as to why IDG, the magazine's owner, shut down the magazine without giving it another chance. Despite that frustration, he now sees there was always an end in sight, given the magazine's mission.
"Magazines, in order to survive, need to accommodate change," Ledbetter said. "The Economist used to be called something like the Economist and Railroad Times. What is revolutionary in one year is pervasive 20 years later. For now, I'm not sure it makes sense for anything to be completely devoted to the Internet."
_ Hartford (Conn.) Courant