The Incumbents Battle On In the room with the NYT and WSJ

Arthur Sulzberger | Credit: Andrew Harrer/Bloomberg via Getty Images

Arthur Sulzberger, the publisher of the New York Times, is seated next to Robert Thompson, the editor-in-chief of Rupert Murdoch’s Wall Street Journal, whose business plan is now all about challenging the Times. (The night before Sulzberger had what seemed to be a polite, and nearly convivial, chat with Murdoch and his wife Wendi.) The Italian newspaper, La Republica, Bloomberg, and the FT, are also represented here.
There is no real reason for the largely internet-centric conferees to turn out for this panel—save for the prospect of Sulzberger-Thompson tension. Still, the technology guys need their press and remain quite in awe of the Times and the WSJ, and there’s only standing room.

Sulzberger himself is the curiosity—the weight of the paper on his shoulders, of its problematic fate in his hands, can seem train-wreck like.

Thompson is himself a compelling presence—a wraith-like, lurking figure, with his symbiotic relationship to Rupert Murdoch.

Sulzberger continues his robust defense of the Times in rather bold warrior fashion: “It is clear that we are moving to an era where digital revenues must sustain us, but print circulation is not going away.” He points out that the number of people who have received the Times for at least two years—its core—is now up to almost 840,000.

Thompson, too, has a largely positive report about the state of the WSJ—up 10% in circulation. Pay no attention to the $100 million a year it’s losing.

Neither man mentions advertising, which is the critical and in fact calamitous issue.

It’s a slogging hour of many efforts at optimism and good cheer, which no one buys. But there is a feeling of generosity in the audience. Of not kicking people when they’re down.

And Sulzberger comes off rather well. It is actually a new, more distinguished Arthur. The boy publisher is, shockingly, 60. He has a girlfriend too, cutting a figure at some of the conference events.

The essential theme of this conference is incumbents versus the upstarts. Of course the upstarts believe, with some obvious basis, that they are more powerful now than the incumbents—a name they use with great glee and haughtiness. But no irony about where they stand now.

May 25, 2011, 1:13 PM EDT

Zuckerberg’s Stage Is this the end of advertising?

Sarkozy and Zuckerburg at eG8 | Credit: BERTRAND GUAY/AFP/Getty Images

“Our business is advertising,” said Mark Zuckerberg who, although he was the penultimate speaker at the eG8 conference in a stultifying hot hall, managed to fill the room.

“Mine too,” said his interlocutor, Maurice Levy, the head of Publicis, who had organized the conference at the behest of President Sarkozy, and who saved the most famous interviewee for himself.

And yet they probably did not mean the same thing about which business they were in.

Curiously, there has not been much talk of advertising at the conference, even with Publicis leading the discussion, and even here, the elegant, gray-haired Levy did not seem to want to sully his conversation with the sneaker and T-shirt Zuckerberg (sweat circling under his arms) drinking his Gatorade.

Advertising, Levy seemed to imply, was not a subject on the level of the Facebook revolution and of the Zuckerberg phenomenon.

The phenomenon was in riveting form—a face and hair style and look now as iconic as any. He is more vivid than the screen character and pretty much the opposite character type. Not petulant and obsessive. Not math-y at all. But boyish, positive, simple, clarion—shockingly so.

He is here, no doubt, as the result of careful calculation. The biggest threat to his company is regulation. The biggest threat to his own position in his company is the idea that he might not be up to the job of representing Facebook to the political world.

But here he is, deft, charming, infinitely reasonable, and deeply modest about Facebook’s reach and power: no he would not say that Facebook played an important part in the Arab Spring—nice to think so, but far from true. And tomorrow, he goes on to be one of six people from the technology business to directly address the leaders of the G8 countries.

It is Zuckerberg on the world stage.

But back to advertising. In a discussion of such deference, and flirtation by the older man with the younger man, there is not much to grab hold of. But there is this: “This trend of people being empowered to share things that they want will be the trend for the next five or ten years. . . . ”

Zuckerberg probably means to share what they want to share. But it may just mean to share desires in general—impulses, hankerings, things.

“If you think about advertising, what’s going to be more effective than any advertising you show is something your friend says they like,” says Zuckerberg.

To which Levy, in the business of showing, rushes to say, “I agree that recommendation and endorsement from a friend is sometimes more powerful than the greatest ad.”

Like gaming has already become, says Zuckerberg, “music, movies, TV, news, books will become more social.” By which he means that Facebook believes it can let media vendors, like game makers, use Facebook as a new sort of distributor. Netflix will be, Zuckerberg suggests, first up to make this sort of deal. And music . . . he repeats music several times.

Friends advertising to friends, disintermediating Levy and Publicis.

Good to know.

May 25, 2011, 12:56 PM EDT

The Clash of Civilizations Civilians attempt to subsume the digital world; tech people insist on its autonomy

Yuri Milner | Credit: Ramin Talaie/Bloomberg via Getty Images

Paris. It’s a weird sound when politicians and other civilians say the word “digital.” First they say it often: “It should be a digital market in a digital world. We are about the digital agenda—and not just in the digital sector.” There’s a certain drag on the first syllable, as in “dijjj.” There’s pleasure in being able to say it, a kind of unexpected delight. They say it like people who didn’t go to Harvard, say Harvard—with too much respect and lingering far too long.

Technology people do not say it so often, if ever. They wouldn’t, of course. Or they would need to say it almost constantly and run screaming from their digital workplaces. Technology people instead say “platform.” They say it as often as possible. They say it in an adoring sense. And they say it as an absolute: having established a platform, the game is altered. Having a platform is making new rules (models), and establishing new paradigms.

For the former, uttering digital this way, so formally and officially, suggests that digitalization can be incorporated, administrated and rationalized. This view assumes that civil society is secular and policy-oriented—that all things have their place. The latter, with its use of platform, suggests a certain separatism and independent life; it’s a sui generis and even religious world. Lawrence Lessig, an Internet industry gadfly, told the eG8 conference that the “future is not here.” And that the impulses of the non-Internet world could even prevent it from coming.

These are inimical positions. One attempting to subsume the digital world, the other insisting on the autonomy of this new universe.

But, curiously, these two views seem to be in happy co-existence.

This could be because each has an absolute certain belief in its own ultimate dominance. The secular world cannot for a second see a circumstance that does not require legislative oversight and regulation. The new platform world believes it answers to a higher calling and has on its side a more powerful authority (technology).

Or it could be because power likes power.

Yuri Milner, the Russian investor in Facebook, Zynga, and Groupon, acknowledged a “collision between the off line world and online world.” But he noted too that this collision produced the “excitement” that results in high valuations.

The nasty fight between old world and new that is bound to take place is yet held at bay; it’s more flirtation now; boys and girls at a dance.

May 25, 2011, 10:02 AM EDT

The Internet Wars The old establishment tries to remind the new that regulation is inevitable

Paris—The eG8 Internet conference hosted by French President Sarkozy today and tomorrow—a prelude to the G8 conference later this week—and bringing together the cream of Internet money and status isn't really an Internet conference.

The digital world is organized by conferences—every week a conference somewhere. These represent the social and business structures that, in less than two decades, have built one of the great global businesses.

But this conference in the Tuileries Gardens is quite different. First, there are the suits. That is, everybody's wearing one—a dark one. In France this signifies not so much business but bureaucracy. This is the political-regulatory class. Then there is this taking over of the Tuileries Gardens themselves—a conference that came together in less than a month—by presidential fiat. And the command performance (for no clear reason other than the powerful calling the powerful) of the most significant figures in the business: Eric Schmidt, Andrew Mason, Sheryl Sandberg, Mark Zuckerberg, Jimmy Wales, Yuri Milner, and Rupert Murdoch, hardly an Internet figure, but a figure nonetheless. And then the chatter about how the panels themselves came together—the careful parsing of message, of who was invited and who was excluded.

This is, in other words, the old establishment trying, abruptly, to exert its prerogatives over the new establishment, wanting to more or less gently, but firmly, remind the new that regulation is rational and inevitable.

It is too the new establishment delighted to sit beside the old—to see themselves as its equal (rich guys, no matter how much they resist regulation, actually love government—indeed, believe themselves to be the ruling class).

This is a clash of fairly serious titans. Government, being slow to understand, has let the technology and culture develop without much interference. The technology produced enormous wealth and dependence, becoming in its own way, a separate sort of government (much discussion here about the metaphors that define the Internet as a separate land or nation).

The governmental view is obviously a logical one—the digital infrastructure is a utility that needs oversight and regulation. As obviously, almost no one in government has the natural ability or, if you will, art, to do this—as might have been claimed about all regulators of all utilities that have ever been regulated. The opposite view on the part of successful entrepreneurs, technologists, and industry gadflies, is a pure and pugnacious one, based largely now on wealth: we are, individually, rich enough to stymie regulation (which is why, in fact, you've invited us to the Tuileries Gardens), and, as an industry growing fast enough, that you risk slowing economic expansion if you dare to regulate us.

This is a very polite and, in a European way, formal meeting, with most points of controversy meticulously removed from the agenda. And yet this may be one of the first events to dramatize capitalism's next great war: between the instincts of bureaucratic liberal government and the heretofore rebellious and innovative technologists who have become the ultimate defenders of free enterprise.

Winner uncertain.

May 24, 2011, 12:30 PM EDT

The New Rupert Has the mogul turned . . . nice?

How come Rupert Murdoch is at a technology conference talking about education?

Or, would any conference anywhere let Rupert Murdoch talk about anything he wanted to talk about?

Rupert is, after all, according to Maurice Levy, the Publicis chairman and organizer of this conference, the most famous man in the world.

Still, there is something especially quizzical if not preposterous about Rupert on early education. For one thing, it’s a subject he’s been especially dismissive about. He doesn’t think education is what distinguishes the most useful people. His own policy has been to avoid hiring people from the Ivy League and, indeed, to be very bully about hiring people with no college education at all (the more you achieve with less education the greater he admires you). He’s dyspeptic on the subject of his children’s schools—Vassar, Princeton, and Harvard (in that order), to which both he and they contribute very little or nothing at all. He forbid his daughter from going to Stanford Business School, saying he could teach her anything that Stanford could. What he likes best are newspaper people who didn’t fool with school. Robert Thomson, the editor of The Wall Street Journal, and a Melbourne boy who left school early for the news room, is his ideal.

So why is Rupert on deck saying all manner of banal things about “exciting young imaginations?” And how the digital revolution—which he has resisted as strenuously as anyone in media—can transform young minds?

What gives?

This is partly one of those comical internal corporate things: oh lord, what is the Old Man going to talk about at an Internet conference?

Not, amid Internet royalty, the Internet.

But something.

Murdoch is regularly urged to get a cause. Actually, he is regularly urged by his handlers (and also his children) to get a worthy cause (read: non-controversial). His wife—his wives have great influence over him—is opinionated about education. Rupert and Wendi have two young daughters and, in Tiger Mother fashion, Wendi thinks she knows how this ought to be done (she’s paid for the early Chinese language program at her daughters’ school). What’s more, News Corp. just hired former New York Schools Chancellor Joel Klein to head a new, unspecified, education initiative for the company.

In fact, let me go so far as to say this is part of a curious corporate-family cabal to get Rupert off right-wing politics.

Indeed, what that was on stage, in his open neck shirt (a man who wears a tie to bed), and his new haircut (sans orange dye and close cropped), and new glasses (dark sleek frames replace the wire ones), was the new and gentler Rupert.

I suppose this is good. 

May 24, 2011, 12:24 PM EDT