Web 2.0

Is Web 2.0, despite all the hype, really just a crock?  

It’s a question that, ironically, is the subject of heated debate at the moment. The irony is that Web 2.0 is a lucrative “sweet spot” in an otherwise traumatized global economy and battered business environment.

Web 2.0 is undeniably hot. Just Google “Web 2.0” or check Amazon for the plethora of books on the subject (including one by me, and another forthcoming). Walk into any luxury hotel lobby these days and you’ll likely bump into a self-proclaimed Web 2.0 guru.

Maybe that’s the problem. Critics claim that Web 2.0 is an over-hyped flavor-of-the-month techno trend that has flung open the gates to a stampede of management evangelists and marketing hucksters flogging their Kool-Aid. Web 2.0 recipes, say critics, are big on marketing nostrums but short on measureable results. In short, where’s the beef?

I was left reflecting on that troubling question after reading a blog post by Oliver Marks, a respected Web 2.0 evangelist who tirelessly travels the world spreading the gospel. After the recent Enterprise 2.0 conference in San Francisco, however, Marks was unmistakably dispirited by both the coherence of the Web 2.0 message and its ambivalent reception.

 “It’s still hard to deliver an understandable and memorable Enterprise 2.0 elevator pitch proposition between the 40th floor bar and the hotel lobby,” he noted. Marks expressed the same dismay in a video chat after the San Francisco conference with fellow evangelist Andrew McAfee, who coined the term “Enterprise 2.0” in 2006. They both left the vague impression that, despite some signs of progress, the conference had been a letdown due to lack of C-suite buy-in.

My God, I thought, when the apostles themselves are rending their garments perhaps there’s good reason to question the religion’s main articles of faith.

To stay with the Biblical analogy, there is a Saint Thomas in this story. The doubting Thomas is Dennis Howlett, a highly regarded enterprise software expert who committed heresy in a widely-discussed blog post titled, “Enterprise 2.0: what a crock”.

 “Regardless of what you’re told by the Enterprise 2.0 mavens, business has far more pressing problems,” growled Howlett. “The world is NOT made up of knowledge driven businesses. It’s made up of a myriad of design, make and buy people who — quite frankly — don’t give a damn about the ‘emergent nature’ of enterprise…Like it or not, large enterprises — the big name brands — have to work in structures and hierarchies that most Enterprise 2.0 mavens ridicule but can’t come up with alternatives that make any sort of corporate sense. Therein lies the Big Lie. Enterprise 2.0 pre-supposes that you can upend hierarchies for the benefit of all.”

Howlett’s curmudgeonly, but well-informed, opinions caused quite a stir among Web 2.0 evangelist – that’s putting it mildly. Howlett even revealed that, invited to attend the Enterprise 2.0 conference in San Francisco, he flatly spurned the offer: “Why would I waste my time listening to a bunch of talking heads trot out the same claptrap I’ve been hearing for the last several years?”

Among those talking heads were the sharpest Web 2.0 evangelists in the business. And some of them, predictably – notably Marks, McAfee, Sameer Patel, and Stowe Boyd – were quick to fire off rebuttals to Howlett’s stinging criticism.

But the damage was done. Howlett clearly had destabilized these apostles. In their counter-arguments, they were watering their wine. At the San Francisco conference, a view emerged that the word “social” (as in social media) was not helping the Enterprise 2.0 cause. Howlett acknowledged this concession with satisfaction in a follow-up blog post, noting: “I’ve argued for years that the notion of anything that has ‘social’ attached to its moniker is about as welcome as breaking wind in a spacesuit”.

What’s happening to the loudly-trumpetted “social media” revolution when its leading evangelists are expurgating its true semantic meaning? Is Web 2.0 a business revolution that dare not speak its name?

It might be tempting to believe that this friendly feud is restricted mainly to geeky Enterprise 2.0 precincts where IT experts, software vendors, management consultants, and MBA academics debate impenetrable subjects like system architectures. Let the IT geeks gnash their teeth. Over in the marketing & PR world, Web 2.0 experts are happily swimming in the sweet spot — rocking, kicking butt, and enthusiastically using the adjective “awesome” to describe just about anything.

Not so fast. Web 2.0 marketers are sinking into their own quagmire. They are, for example, facing criticism about ethical lapses regarding advertising-sponsored blogs and tweets. U.S. regulators are now threatening to impose rules to protect consumers.

Meanwhile, claims by Web 2.0 marketing consultants that social media tools produce bottom-line results have been contradicted by other doubting Thomases. Larry Dignan published a blog post that challenged Web 2.0 consultant Charlene Li’s robust “ROI” claims for big brands employing social media techniques. Dignan’s blog post was titled: “Does social media really correlate with the bottom line? Color me skeptical”. If that’s not enough, after the recent Defrag conference in Denver, which was attended by many Web 2.0 marketers, Louis Gray penned a blog post titled: “Skepticism Over Current State of Social Web”.

So what’s going on? Why all this self-doubting, curmudgeonly sniping, teeth-gnashing, hand-wringing, soul-searching and flagging faith?

There is, of course, nothing wrong with healthy debate – in fact, it should be encouraged. But perhaps there is something deeper at work in these challenges to Web 2.0 evangelism.

It occurred to me that in this debate about Web 2.0, as with most things in this world, where you stand depends largely on where you sit. To put it more grandly, the differences between evangelists and doubters are not only about pragmatic “where’s the beef?” questions, but reflect fundamentally opposing philosophies about human nature.

Before addressing Web 2.0’s philosophical underpinnings, let’s first establish some precise definitions. Most would agree that all Web 2.0 evangelists cannot be placed squarely in the same socio-professional group.

At risk of oversimplification, I would argue that there are three broad spheres of Web 2.0 evangelism: Marketing, Enterprise, and Government.

Marketing 2.0

This group was early to rush into the Web 2.0 space, mainly due to the Web’s powerful impact on advertising industry dynamics. Marketing & PR professional had to get their heads around Web 2.0 – and fast. The stakes were too high for inaction.

In the United States, the Social Media Clubs network emerged from the marketing & PR profession, many of whom have tossed away their old business cards and now call themselves “social media strategists”.

The word “social” is not a problem for Web 2.0 marketers, mainly because it’s a natural outgrowth of previous notions of “mass” – i.e. mass media and mass marketing. Social isn’t a threat, it’s cool.

The big challenge for Marketing 2.0 professionals, apart from completely reinventing their business to accommodate the power shift from suppliers to consumers, has been redesigning tactics to meet the demands of Web 2.0 metrics. Moving away from “broadcast” advertising models, they have mastered “viral” Web dynamics and integrated social capital factors like “influence” (which, in fact, is old wine in new bottles with origins stretching back more than a half century to the empirical work of Paul Lazarsfeld and others on personal influence and opinion-shaping).

The Marketing 2.0 sphere is crowded with consultants, authors, and gurus selling concepts and approaches with catchy slogans and formulas. This feverish activity is demand-driven because many companies are eager to learn about Web 2.0 tactics if they promise to boost sales. Among respected thought leaders in this school are Brian Solis, Shel Israel, Chris Brogan, and Steve Rubel. A maverick, and high-profile, voice in this school is Robert Scoble.

Key words in Marketing 2.0 are branding, sales, reputation management, customer relations, and so on. This is the sexy area of Web 2.0, which boasts an active and well-attended conference circuit.

In sum, we can say that Marketing 2.0 is largely focused on the tactics of externally orientated approaches (branding, sales, customer relations) whose goals are mainly short-term.

Enterprise 2.0

This school can claim loftier origins going back not only to Cluetrain Manifesto a decade ago but also to management theories over the past forty years advocating flat structures and open collaboration.

Unlike sales-oriented Marketing 2.0 evangelists, the Enterprise 2.0 movement has encountered institutionalized resistance inside corporations. The reason for this is not difficult to discover: Enterprise 2.0 evangelists are confronted with the daunting task of transforming rigid organizational structures and hierarchies. They are essentially in the business of “change management”. That’s a lot harder than concocting videos for viral branding campaigns on YouTube.

In Enterprise 2.0, the word “social” is, as noted, more an obstacle than an advantage. Inside companies, departments like Legal, HR, and IT operate within strict rules and compliance procedures that are fundamentally hostile to “social” behavior, which has connotations of chaos (not to mention “time wasting”).

The key words in the Enterprise 2.0 school are collaboration, innovation, information and a host of alphabet soup anagrams like ERP, BPM, ECM, and KM.

Geeks are passionate about Enterprise 2.0, but for the uninitiated it’s a highly technical, software-driven field with comparatively less sex appeal. Enterprise 2.0 experts, to their credit, tend to be highly specialized and technically focused (unlike marketing & PR which is a more inexact science). Respected Enterprise 2.0 thought leaders include Dion Hinchcliffe, Andrew McAfee, Oliver Marks, and others mentioned above.

In sum, we can say that Enterprise 2.0 is largely focused on strategies for internally oriented approaches towards managing employees inside organizations and communicating with business partners. The goals of these strategies are essentially medium-term — on the five-year horizon.

Government 2.0

This Web 2.0 school, often overlooked, is focused not on engaging with customers or managing knowledge inside companies, but on the connection between governments and their citizens. In short, replace the words “consumers” and “customers” with “citizens”.

A variety of different buzzwords are used in this school: e-democracy, e-government, Government 2.0, and so on. Certain specialists in this school are focused on how governments can deploy Web 2.0 tools to deliver services to citizens, while others are more focused on bottom-up e-democracy where citizens self-organize.

A third sub-sphere in this school has received the most media attention: electoral politics. Politicians have borrowed heavily from Marketing 2.0 as they search — after the success of Barack Obama — for effective Web 2.0 tools and tactics to appeal to voters. In fact, this electoral component of e-democracy probably belongs in the Marketing 2.0 school due to its preoccupation with tactics and short-term results.

Web 2.0 evangelists inside government machinery face many of the same organizational challenges as Enterprise 2.0 specialists – namely, obstacles erected by bureaucratic silos and entrenched corporate cultures. There is also a strong IT focus on what software solutions can be deployed to achieve goals.

A conference circuit has emerged in the Government 2.0 sphere – in the United States, the Gov 2.0 summit and Personal Democracy Forum, and in Europe events like e-Democracy and the inaugural PDF Europe conference in Barcelona in late November 2009. Thought leadership has come from Tim O’Reilly and his conferences in the United States, while in Europe thinkers like Charles Leadbeater have become articulate spokesmen for bottom-up forms of social organization. In the corporate world, Google’s Vint Cerf is engaged in Gov 2.0 issues. And Cisco’s brain trust published a report called the Connected Republic, inspired in part by thinkers like Cluetrain co-author David Weinberger.

In sum, we can say that Government 2.0 is largely focused on the use of Web-based platforms to transform the relationship between state and citizens, and the achievement of those goals is essentially long term.

These three schools are interconnected, of course, but largely as circles peripherally overlapping in a middle zone. Some Web 2.0 specialists move in all three groups (I am one of them), but most stay largely focused on the issues related to their own particular sphere – with the exception, of course, of software vendors who have an interest in promoting their products in all three areas. What links all three spheres, of course, is the nature of their challenge: using different techniques and strategies to transform underlying values that shape behavior. 

Now let’s turn to the issue I set out to address: philosophy.

My thinking about Web 2.0 initially took this admittedly high-minded perspective when I read a tweet by evangelist Susan Scrupski, who is a driving force behind the Enterprise 2.0 Adoption Council. Her tweet quoted management guru Peter Drucker, who once stated that “the purpose of an organization is to enable ordinary people to do extraordinary things”.

Drucker’s essentially optimistic view, I thought, can only be inspiring. It was shortly after reading this Drucker quote that I came across Dennis Howlett’s grumbles about Enterprise 2.0 being a “crock”. Howlett asserted that organizations can’t be “nurtured” into collaborative modes of behavior because human “nature” will always get in the way.

“Time and again, we see the instinctive, nature-driven flight to survival as departments defend turf,” he said.

Howlett’s remark reminded me of management thinker Tom Davenport’s equally skeptical view of Web 2.0: “Enterprise 2.0 software and the Internet won’t make organizational hierarchy and politics go away. They won’t make the ideas of the front-line worker in corporations as influential as those of the CEO. Most of the barriers that prevent knowledge from flowing freely in organizations – power differentials, lack of trust, missing incentives, unsupportive cultures, and the general busyness of employees today – won’t be addressed or substantially changed by technology alone. For a set of technologies to bring about such changes, they would have to be truly magical, and Enterprise 2.0 tools fall short of magic.”                                     

That was a light-bulb moment for me – and reading Susan Scrupski’s tweet brought it into focus. I suddenly realized that — while we’re waiting for the “ROI” case to be made – the conflicting views about Web 2.0 find their origin in two fundamentally opposing philosophies about human nature.

Let’s examine that philosophical dichotomy:

Web 2.0 evangelists belong to the philosophical school of liberalism in the classic sense of that term. They are essentially optimistic and believe, above all, that human nature is good and individuals are rational – and thus can recognize the “truth”.

This tradition finds its modern origins, needless to say, in the works of Enlightenment philosophers like John Locke and Rousseau and later John Stuart Mill. Their classic liberalism constituted a challenge to the prevailing authoritarian systems that later found philosophical justification in conservatism.

“No great improvements in the lot of mankind are possible,” stated Mill, “until a great change takes place in the fundamental constitution of their modes of thought.” That’s pure Enterprise 2.0 gospel, though these days less openly declared.

Web 2.0 naysayers, on the other hand, are philosophical conservatives who espouse an essentially pessimistic view of human nature. They believe that human nature is essentially bad and human beings are not rational – and thus can never recognize the “truth”.

This philosophical school traces its modern origins to Machiavelli. Its most obvious spokesman, however, is Thomas Hobbes, famous for  his “state of nature” theory and observation that life is “nasty, brutish and short”.

Dennis Howlett’s anti-Enterprise 2.0 arguments about “nature” over “nurture” are philosophical echoes of Hobbes. Hobbes undoubtedly would agree with both Howlett and Tom Davenport that complex organizations are not idealized paradises where the lion lies down with the lamb, but rather a dense jungle of relentless belligerence where human motives are driven by power, turf, and domination.

We can conclude, therefore, that Web 2.0 evangelists are philosophical optimists who believe in the human capacity to act rationally and collaborate to achieve common goals. Web 2.0 doubters, by contrast, are philosophical pessimists who believe that man’s selfish nature and unblinking pursuit of his own interests at the expense of others will always thwart any effort inside organizations to foster a culture of sharing and collaboration.

There is also a cultural dimension to this dichotomy.

Generally speaking, Web 2.0 evangelism has made greater progress in Anglo-American countries whose history is steeped in traditions of liberalism and egalitarianism – especially the United States. Also, the Anglo-American intellectual tradition emphasizes pragmatism based on concrete results – a suitable cultural environment for experimentation and hard metrics.

In other cultures, including continental Europe, Web 2.0 has confronted major obstacles due to deeply entrenched cultures shaped by centuries of authoritarian institutions – Catholic Church, military, and centralized state. This is particularly the case in Latin countries like France, where a rigidly bureaucratic culture and abstracted notion of authority are fundamentally hostile to Web 2.0’s horizontal social architecture and collaborative values. Also, France’s intellectual tradition emphasizes abstract logic over pragmatic considerations – not a propitious environment for Web 2.0.

In short, Anglo-American organizational cultures are relatively open to horizontal structures and pragmatic approaches, and business managers feel comfortable with horizontal networking and information inputs. European organizational cultures in countries like France, by contrast, are vertically structured, rigidly hierarchical, turned inward, and regulated by absolute notions of authority that are inherently hostile to Web 2.0 values. See here for an academic analysis of this contrast between American and French business managers.

Oliver Marks, who is based in the United States, pointed to this issue with commendable diplomacy after recently attending an Enterprise 2.0 summit in Europe. “Although English is the lingua franca of international business online,” he noted, “providing compelling reasons to persuade participation in European online collaboration can be culturally more challenging than in the English speaking US and UK.”

So where does this leave us? I confess that I don’t have any answers here – there is, in fact, no resolution to these opposing views of human nature. The entire march of civilization has been shaped by the tension between these two opposing philosophies.

One possible answer lies with future generations, starting with the “millennials” charging into the workforce now. True, the younger generation can’t escape the basic facts of human nature, but they have the power to opt for one, and not the other, view of human nature.

As management guru Gary Hamel predicted in the Wall Street Journal: “The experience of growing up online will profoundly shape the workplace expectations of “Generation F” – the Facebook generation. At a minimum, they’ll expect the social environment of work to reflect the social context of the Web…If your company hopes to attract the most creative and energetic members of Gen F, it will need to understand these Internet-derived expectations, and then reinvent its management practices accordingly”.

But what if the pessimists are right? Maybe it’s impossible, despite the best intentions, to escape the hard reality that organizational behavior is fundamentally a “state of nature” contest about interests and power.

Even Tom Davenport, a Web 2.0 doubter, allowed for the following possibility on the horizon: “It’s going to be very interesting to see what happens when the young bucks and buckettes of today’s wired world hit the adult work force. Will they freely submit to such structured information environments as those provided by SAP and Oracle, content and knowledge management systems, and communication by email? Or will they overthrow the computational and communicational status quo with MySpace, MyBlog, and MyWiki?”

The debate about the pragmatics of Web 2.0 will continue – and so it should. As we move forward, looking for appropriate compromises and practical solutions to resolve common problems, we can at least know that differences of opinion about means and ends find their origins in deeply rooted philosophical notions about our most basic needs and motivations.

UPDATE: A day after I published this blog post, Michael Krigsman published an excellent and insightful post on his ZDNeT blog assessing many of the same themes. Titled “Resistance to Change: The Real Enterprise 2.0 Barrier”, Krigsman’s post implicitly concedes that human nature and the powerful instinct to preserve the status quo will remain an obstacle to Web 2.0 adoption in organizations. His essentially optimistic conclusion, however, is based on the conviction that Enterprise 2.0 success stories — i.e. pragmatic and measurable results — can prevail over deeply-entrenched hostility to change. “In general, fighting human nature is an uphill battle that eventually results in failure,” he counsels. “Instead, work gently with stakeholders to help them experience first-hand the benefits of Enterprise 2.0. Success is the most powerful form of organizational transformation and evolution.”

Below is a link to my most recent blog post for Internet Evolution, titled “HR’s Web 2.0 Paradox”.
The paradox is this: while HR policy in many companies and organizations bans social networking sites like Facebook, it’s an open secret that many HR managers actively mine the same sites to gather information on job candidates and current employees.
Some of the comments to my blog post are clearly negative about HR professionals. For clarity, I don’t believe HR managers are necessarily hypocrites; rather, it’s the institutionalized practice of actively using Web 2.0 networks that are banned in their own organizations that creates the appearance of hypocrisy.
I suggest some reasons that might be behind this inconsistency, and urge HR professionals to reflect seriously on their policies and practices in this area. While these policies continue to be elaborated and enforced on a company-specific basis, perhaps it’s time for HR professionals to convence and adopt professional codes that they can bring back into their organizations.
I hope my blog post can help trigger debate and discussion on this issue.
Here is the link:
httphttp://www.internetevolution.com/author.asp?section_id=796&doc_id=183079&

British teachers don’t get it. Or at least their unions don’t get it. Schools and universities are supposed to be open environments that promote free speech, debate and learning. And yet UK teachers are quick to censor ideas that they find threatening.
Let me explain. Some months ago, the editors of the magazine SecEd approached the publicists for my book, Throwing Sheep in the Boardroom, to ask if I could contribute an article. SecEd is a trade magazine, published in London, for UK teachers and headteachers.
This is how the magazine describes itself: “Published each Thursday during the academic year, SecEd is a colour, glossy tabloid-sized newspaper that contains a mixture of thought-provoking news academic and best practice features, regular columns and an invaluable classified recruitment section. It is written by its own team of writers and education journalists, supported by contributions from leading figures in UK education and, more importantly, practising and experienced headteachers, senior leaders and teachers.”

The magazine’s Editor requested an article from me on the “potentially damaging effects of sites such as RateMyTeachers.com”. My book publicist, who was in direct contact with the magazine, clarified the Editor’s request in an email to me: “The editor was keen to point out that as a trade journal for teachers and headteachers, the magazine takes an editorial stance against such sites. While he would of course expect an expert feature to take a balanced view, and would not presume to dictate that we tie his editorial line, he feels that wouldn’t be able to run a piece which ultimately comes out in favour of such sites.”
As a veteran journalist myself, I immediately grasped that SecEd magazine is, in effect, the house organ for UK teacher unions and their diverse lobbies. I was however intrigued that they’d requested an article from me and my co-author Soumitra Dutta on this subject. And why not, it’s a timely and interesting issue.
We were also obvious candidates. In our book, we examine in some detail the emergence of teacher “rating” sites like RateMyProfessors.com and RateMyTeachers.com. In particular, we look at how these sites have become immensely popular in the United States, where teachers and professors now reply to their ratings on videos posted right on the site (which incidentally has been purchased by MTV).
In France, by contrast, powerful teachers unions took a similar site to court and had it shut down with a ruling that the site could not post teachers’ names. The UK experience is somewhere between the American and French examples. UK teachers unions are resolutely opposed to sites like RateMyTeachers.com, but these sites operate with little fear of being closed down by a court order.
Our point in the book is that Web 2.0 platforms have facilitated a bottom-up culture of rating, ranking and reviewing that is challenging vertical professions and institutions whose authority is based on credentials and “expertise”. Customer book reviewing on Amazon is a good example. So is RateMyProfessors.com. Nobody likes a negative review, but the emerging rating & ranking culture is already pervasive. Teachers and university professors, along with doctors and lawyers, are now being reviewed, rated and ranked by their own customers. In education systems, they are called students.
SecEd magazine was obviously intrigued enough by this phenemonon to ask me to write an article on the subject — though with the proviso that I must examine the “potentially damaging effects” of RateMyTeachers.com. I don’t write articles to comfort the biases of any publication, so I told our publicist that I’d be happy to contribute a balanced article on the condition that it be published holus bolus. No editing or expurgating. I also insisted that I wanted a commitment from SedEc that they would publish it, for I didn’t want to spend time drafting an article that they would later refuse.
Our publicist communicated my conditions to SedEd, and the magazine agreed. My article would be published holus bolus, they said. With that reassurance, I took pains to ensure that the article was scrupulously fair and balanced, comparing different reactions to teacher rating sites in the United States, France and Britain. Nowhere did I express an opinion.
After I submitted the article, many weeks went by without a word from SecEd. Our publicist finally checked with the editors, who reassured us that the article would indeed be published shortly. Then a few weeks later, after we checked again, they told us that sorry, the article would not be published. Someone higher up at the magazine had apparently ruled against publishing it. Presumably, they had come to the view that the article didn’t follow the official UK teacher unions’ party line against RateMyTeachers.com.
It is ironic, to put it diplomatically, that teachers are quick to censor points of view — even when balanced — that challenge established assumptions, not to mention corporatist interests. One would have hoped that teachers, of all professions, would be open to discussion and debate.
There is even more irony. This comes at a time when others, like Jeff Jarvis, are reflecting and writing about how the Web 2.0 revolution (and in particular Google) might, and should, totally transform teaching and higher learning. And there are videos like this one that point out how out-of-touch teachers are with the generation of Web-savvy “digital native” pupils who are sitting in their classrooms but learning little.
While that necessary discussion continues, I will post below the article, word for word, that SecEd magazine refused to publish. Perhaps you can explain why a magazine for UK teachers found this article too threatening.
One quick footnote: the reference to “Bebo” in the first paragraph is familiar mainly to readers in Britain where SedEd is published. Bebo (now owned by AOL) is a popular social networking site among British youths, similar to MySpace in America.

Here is the article, which I originally titled “Rate My Teachers: Pupil Empowerment or Virtual Cyberbulling?”

You be the judge:

If the Bebo generation can be defined by any single behaviour trait, it’s a cultural obsession with ratings and rankings.

The same kids who, a decade ago, were rating Pokémon players are now teenagers logged onto social networking sites like Bebo, MySpace and Facebook where they feverishly rate, rank, and review their favourite songs, movies, television shows, photos, comic books, celebrities, you name it.

In Britain, popular talent shows like “The X Factor” reinforce this culture of instantaneous ratings. Videos on YouTube similarly are compulsively rated and ranked by hundreds of millions of teenagers worldwide. Online social interacting is a round-the-clock ritual of mass democracy, constantly self-updating, rendering verdicts on just about everything.

This Web-empowered reflex to rate, rank, and review can be controversial. The emergence of websites like RateMyTeachers, in particular, and RateMyProfessors has focused intense public debate on issues such as “cyberbulling” of teachers by their own pupils. Some teachers associations –in the UK and other countries — have called for these sites to be shut down. Yet the cyber curtain on the virtual Gong Show never comes down.

Our purpose here is not to cast moral judgements or take a position on what governments should, or should not, do about the emergence of websites like RateMyTeachers. Our goal is twofold: first, to provide teachers with a conceptual understanding of the underlying dynamics driving Web 2.0 social networking sites; and second, to provide a comparative perspective of reactions in other countries to sites like RateMyTeachers.

It is important to grasp that the basic social architecture of networking sites like Bebo, MySpace and Facebook is open, horizontal, and democratic. Online social interaction, especially amongst young people, is transparent, candid, and informal. The finer points of Debrett’s etiquette are not generally top-of-mind among the millions of teenagers logged onto Bebo and MySpace.

Not surprisingly, when these sites penetrate organisations, their horizontal dynamics frequently clash with the logic and values of vertical hierarchies. Most bureaucracies and institutions are characterised by status hierarchies based on rank, protections, tenure, and other entrenched entitlements that are, by definition, hostile to bottom-up evaluations.

Professions especially are resolutely opposed to any form of non-authorised rating of their members. The reason for this is not difficult to discover. Most professions, including teaching, can be defined according to certain formal characteristics: barriers to entry based on credentials, monopoly entitlements, restrictive arrangements, self-disciplinary powers, and regulation by states. Professions are closed, vertical structures. Social networking sites are open and horizontal.

When John Swapceinski, a Silicon Valley software engineer who founded RateMyProfessor.com, stated that his website was inspired by the laws of the marketplace, it was hard to disagree with him from a purely theoretical point of view.  “Students are demanding more information because they see themselves as customers who want the most value for their dollar,” he said.  Most professions, however, are not subject to the laws of the marketplace. They are regulated by states in return for monopoly entitlements based on professional credentials.

Still, RateMyProfessor.com is massively successful. Launched in 1999, it’s the most heavily trafficked college website boasting some 7 million users who have generated opinions of roughly 1 million professors teaching at roughly 6,000 collegiate institutions in Anglo-American countries (RateMyTeachers is devoted to primary and secondary schools). Professors are rated on a five-point scale according to straightforward criteria: easiness, helpfulness, clarity, and the student’s interest in the class before taking it. Also, “smiley” icons are assigned as general ratings — grinning brightly for high-satisfaction evaluations, frowning glumly for low scores.

Many of the website’s critics sidestep its original purpose – to rate professors on a graded scale – and focus instead on issues like “cyberbullying” which in some cases are a justifiable concern. In Britain, one teacher claimed to feel dehumanised when a student described her as a “disinfected cat”. There can be little doubt that, in some cases, disgruntled pupils are taking out their anger at teachers via sites like RateMyTeachers and Bebo.

“Cyber-bullying takes an age-old issue to new levels,” said Mary Bousted, head of Britain’s Association of Teachers and Lecturers. “It’s an insidious and growing problem in our schools and colleges that goes beyond the school gate. For all its benefits, information technology is allowing pupils and parents to bully teachers and lecturers from afar by phone, email and the internet, exposing them to public humiliation, damaging their good reputation and taking away their professional pride and confidence.”

Critics argue moreover that sites like RateMyProfessors are trivialised by student obsession with the physical appearance of their instructors. Students assign “chili pepper” icons to professors they find “hot”. The “hotness” ranking indeed appears to be RateMyProfessors’ most popular attraction. The “hotness” factor has become so popular that RateMyProfessors now features a Top 50 for the “hottest” profs.

One study of RateMyProfessors found that students tend to like courses taught by professors that they find “hot”. Other studies of RateMyProfessors — despite obvious questions about margin-of-error implications when only 50 or 60 students assess a teacher – give top marks to the site’s utilitarian function. A study published in the Journal of Computer-Mediated Communication, for example, concluded that “while issues such as personality and appearance did enter into the postings, these were secondary motivators compared to more salient issues such as competence, knowledge, clarity and helpfulness.”

Now let’s look at the experience with teacher-rating sites in three countries: the United States, France, and Britain.   

In the United States, while many teachers initially complained about sites like RateMyProfessors, the attitude towards these sites has become generally relaxed and accepting. This may be a reflexion of deeply-embedded – and constitutionally protected – American values in a favour of free speech. In the United States the educational system has pragmatically integrated sites like RateMyProfessors into a value system that puts individual liberty and free speech before corporatist interests or collective rights.

RateMyProfessors has now made common cause with another well-entrenched aspect of American culture: show business. In early 2007, the pop video site MTV bought RateMyProfessors and merged it with its 24-hour college channel, MtvU, which is broadcast on 750 college campuses throughout the United States.  Since the MTV takeover, RateMyProfessors has been enhanced with a Facebook application and jazzy features like “Professors Strike Back”. Professors have been given their own voice on the site. Some professors, meanwhile, have started their own site, RateYourStudents.blogspot.com, which feature opinions about students.

In France, the outcome has been precisely the opposite. When two Parisian entrepreneurs launched a French teacher-rating site called Note2be.com, France’s powerful teacher unions denounced the website as an “incitement to public disorder”.  The site’s founders, for their part, pointed out that similar sites in the Anglo-American world are highly successful platforms for information and exchange. But in France, a country where teachers’ unions are willing to paralyse the country’s educational system if their interests are at stake, the government’s dread of a teachers’ strike outweighed its indulgence towards online free expression. 

Xavier Ducros, France’s education minister, took a tough stance against the site. “The evaluation of teachers is the exclusive domain of the Ministry of Education and the civil servants who are appointed to carry it out,” asserted Ducros. With implicit direction from the government, French courts effectively shut down the site by prohibiting any teacher’s name to be posted. After the court ruling, Note2be went out of business.

The British experience has been somewhere between the American and French examples. UK teacher unions, like their counterparts in France, have denounced sites like RateMyTeachers. Unlike in France, however, this outcry has not been followed up by firm government action and judicial decisions. In that respect, the British experience is similar to the American situation, where a general culture of tolerance towards free speech outweighs specific professional interests – except, of course, when laws are broken.

In a Web 2.0 world where power is shifting from vertical institutions to horizontal networks, it should not be expected, meanwhile, that these ratings websites will go away. Similar sites are now providing open rating systems of other professions and services: RateMDs.com, LawyerRatingz, MechanicRatingz.com, RealtorRatingz.com, to name only a few.

What is the best way to react to these sites? It is generally advised that over-reacting in a negative manner is not the best course of action. Engaging a dialogue and becoming a part of the conversation, while being vigilant about outright abuses that violate laws, is generally considered to be a more productive approach to ratings sites.

The mainstream media did not fail to notice that President Obama, during his first press conference, called on a blogger to ask a question. There is a clip here of the question put to the President at the White House.
This was the very first time that the President of the United States, during an official press conference, recognized the status of a Web-only blogger — in this case, from the Huffington Post.
According to some reports, including the one linked above, the established journos at the White House were quick to start whingeing about how the Huffington Post had pushed its way onto their patch — and, worse, actually got to put a question to the President.
It should not have been so alarming, of course, because Barack Obama owes his political success to the Web. Just think of the “Yes We Can” video on YouTube, or his masterful strategic usage of platforms like Facebook, MySpace, and Twitter to raise money and mobilize support. As I have written elsewhere, Obama is America’s first Web-generation President. No surprise that he’s bypassing the Old Boys in the press corps and officially recognizing political bloggers.
In Throwing Sheep in the Boardroom we analyze in detail what we describe as e-ruptions that are challenging and overthrowing established notions of status — and in particular, that of institutionalized “professions” like journalism. There has been a great deal of commentary (including in this blog) about the decline, and slow death, of newspapers as they struggle to deal with the impact of the Web. There has been less focus on an even more powerful disruption: the Web challenge to the professional status pretentions of journalists as the economic basis of their industry is collapsing and new forms of journalism emerge on the Web.
The Huffington Post question put to President Obama is an exalted example of this powerful disruption, which is not only impacting journalists but many established professions. It comes, to be sure, at a bad time for newspaper journalists. But they can at least comfort themselves with the knowledge that they are not the only institutionalized profession whose status and legitimacy are being challenged by these powerful forces.

This third, and final, post on this theme addresses an issue that has been the subject of intense discussion in the few weeks since I posted the first two parts: a new business model for journalism.
The debate, while not new, was triggered by the bankruptcy filing by Tribune Co., which owns the Los Angeles Times, Chicago Tribune and other newspapers. That event clearly has caused a great deal of anxiety in the highest ranks of American journalism, not to mention widespread paranoia that newspapers really are in a death rattle.
There appears to be growing acceptance, even amongst arch-conservatives stoutly defending the once-proud but now-crumbling ramparts of newspaper journalism, that the traditional business model based on capitalist media corporations is failing — and that new models must be found fast. Much of the teeth-gnashing, it should be pointed out, is going on mainly inside established journalistic precincts (managerial suites at daily newspapers and J-School faculty lounges). The young generation actually out there using Web 2.0 platforms doesn’t care a whit about the professional doom and gloom of their tenured elders. The kids are busy reshaping the world, and more power to them.
What interests me here, in particular, is the debate about the role of the state (in the form of subsidies) in rescuing the ailing journalism business. This is a subject that merits serious attention, not only as a practical matter but, more importantly, because it raises larger philosophical questions about fundamental values in liberal democratic societies.
I confess to being surprised that the issue of state funding for newspapers has even come up in a country like the United States, with its long libertarian tradition of freedom of the press, especially from government control. The idea gained currency about a year ago when things were looking grim for newspapers. One notable advocate of state funding has been Nicholas Lemann, dean of Columbia University’s School of Journalism, who held up Britain’s BBC as an example of excellent government-funded journalism. 
In the current crisis, the American journalism establishment doubtless believes the timing is right. Maybe, they must be thinking, their beleaguered industry can sneak into the line, behind the banks and auto giants, with cap in hand for a government bailout.
Government intervention in the media has been institutionalized in other Anglo-American countries such as Britain, Canada, and Australia. In those countries, thousands of journalists are, in effect, on the government payroll as employees of state-owned public broadcasters. The fact that most of these state-owned TV networks actually behave just like their commercial rivals (despite the venerable mythology they perpetuate about their high-minded “public service” mission) makes state ownership all the more contestable.
The hypocrisy goes even deeper in the media establishments of these countries. Whenever governments have floated the idea of restrictions on newspaper ownership, the knee-jerk reaction in the press has invariably been a chorus of indignation about the danger of government controls. In many instances, the same newspaper scribes who have energetically defended the press against the threat of state regulations are married to someone working as a journalist on the state payroll at the BBC or CBC.
The United States has been largely spared these hypocritical convulsions because the American government does not own or directly finance TV networks and newspapers. The PBS model in America is completely different from the state-owned, taxpayer-financed BBC.
And yet, today, we are hearing voices in the corridors of the American journalism establishment in favour of state financing for newspapers.
Geneva Overholser, a veteran newspaper editor and J-prof, wrote a report in 2006, “On Behalf of Journalism: A Manifesto for Change”, which raised the issue of state financing for newspapers. In her report, she recommended public discussion about a “government role in protecting, regulating, and supporting a free and responsible press”.
Overholser was recently appointed director of the Annenberg School of Journalism in California. She therefore joins Nicholas Lemann at Columbia’s J-School amongst the institutional patricians of the American media establishment who are not particularly troubled by the prospect of state intervention in the news business. They frequently evoke high-minded notions about journalism as a “public good” that should not be subject to market forces (an indirect way of advocating state subsidies). Today they can add to these claims the fact that newspaper journalism is now a victim of market failure (though they will almost certainly neglect to mention that Old Media newspaper managers are largely to blame for this).
J-School deans can reliably find support for their views from media critics in the Marxist tradition, many of whom are their academic colleagues. One is Robert McChesney, the author of a significant body of literature which, on the whole, challenges the structural effects of corporate media control. “I don’t think there’s any question, legally or constitutionally or theoretically, that journalism is a necessary public good for our constitutional system to work,” says McChesney, a professor of at the University of Illinois and founder of the media-reform organization called Free Press.
Left-liberal advocates of state intervention are correct to point out that, libertarian free-speech values notwithstanding, governments (including in America) already regulate and finance journalism through a complex arsenal of indirect fiscal and other mechanisms. These include reduced postal rates, sales-tax exemptions, government advertising, to name only a few.
Beyond the Anglo-American world, many Western governments directly subsidize newspapers. In France, where I live, state protection for newspapers and their unions is a vast racket of feather-bedding, gold-plating, and institutionalized cronyism. The French state provides some $400 million in direct subsidies and nearly $1.5 billion in indirect fiscal incentives (including funding for the Communist Party’s house organ, L’Humanité). The French state also controls much of the national television industry. There’s no such thing as a free lunch, however, and anybody who believes that French journalists work without fear or favour obviously have never lived in this country.
That, I believe, is the major flaw in the belief amongst America’s left-liberal journalistic patricians in the virtues of state financing. While undoubtedly sincere, American newspaper managers and J-profs are naive about state financing because they have no hard-nosed experience with its inevitable pressures, effects, and outcomes. It’s a purely theoretical proposition in their thinking and, when you mix that with misguided normative notions about the laudable BBC, it actually starts to sound like a good idea.
It is highly unlikely, in my opinion, that calls for a state rescue of the newspaper industry would gain any legitimate political traction in the United States. Firstly, there is no cultural appetite for it; and secondly, it would be bad public policy.
The real problem, as noted, is that newspaper managers and J-Schools were the ones whose short-sighted, self-interested, and over-complacent behaviour got newspaper journalism in this mess in the first place. In that respect, American newspapers would resemble the Big Three auto makers. They appear to want massive government bailouts to rescue them from a disater of their own making; and what’s more they want the money to help them re-finance a business-as-usual solution.
Indeed, if you follow the debate among newspaper editors and J-School professors, they’re no different. They’re not planning to reinvent the news business; they’re looking for a solution to save the newspaper business as they know it. True, some newspapers, desperate to find a way out of the crisis, are starting (slowly) to adopt Web 2.0 features. But many newspaper managers and J-profs are merely talking a good game about embracing New Media. The uncomfortable truth is that their time has gone. Yet they’re stubbornly hanging on to all the top spots in the industry and J-Schools, preaching the virtues of the old religion, instead of stepping out of the way and letting the new generation re-invent the business. In time, the inexorable process of creative destruction will sort this out. But the forces of resistance are powerful and well-entrenched. And now, it seems, they might want state subsidies so they can stay in the game.
But it won’t happen — not, at least, in America. It would be folly, both philosophically and as a practical matter, to run to the rescue of the newspaper industry with taxpayer funds. When assessing potential business models, you have to first accept that the current model might die and vanish — and doesn’t deserve to be rescued.
As I noted in a previous post, the current model of “professional” newspaper journalism is only a half-century old, dating from the period after the Second World War. Mass-circulation newspapers have only been around for a century or so. There is nothing absolute about these platforms for the distribution of information and opinion. There was news and opinion before newspapers appeared, and there will be news and opinion after newspapers vanish. The only people who are panicking are those with something to lose in the short-term — namely sinecures, position, and prestige.
There is already a lively discussion about potential business models for news, including some interesting reports coming out of research centres like Harvard’s Berkman Center for Internet and Society. The debate about the fate of newspapers and magazines as businesses finds its origins in despair, but many of the prescriptions emerging from this discussion are pointing in the right direction.
One business model is non-profit journalism financed by well-endowed foundations. Another, of course, is networked, Web-driven “citizen” journalism. We already have many inspiring examples of this model championed by advocates like Jeff Jarvis. If local newspapers actually started serving their own readers, via websites, instead of parading like national/international papers to satisfy the ego and career-building strategies of their editors, they may discover that there’s a good business in local news and information.
I predict a major shakeout among Old and New Media companies in the next few years, and from that flurry of M&A activity we will see the emergence of a new business model for news, information and opinion. That doesn’t mean that other business models – like non-profit journalism financed by foundations – won’t emerge. But smart money, in my opinion, would bet on a mega-merger reconfiguration of the media industries, driven by Web-based content, to fill the vacuum left by the death of printed newspapers.
Journalism schools, too, are going to have to get with the programme, because if the status quo is allowed to persevere in those precincts, pretty soon the students are going to know more about media production than their professors. A lot of unpleasant stable-cleaning is needed, but I’m not sure incumbent deans in those institutions have the stomach, or the inclination, to get the job done.
It will be interesting to follow over the coming months the voices in favour of state subsidies for newspapers, and to see whether they organize themselves politically and actually make a formal case for government intervention. The spectacle of their curious contortions will be intriguing to behold, though difficult to applaud.

Epilogue update: On Dec. 23, the Pew Research Center released survey results showing that, in the United States, the Web now surpasses newspapers as a source for news. Meanwhile, for those with a morbid interest in the newspaper industry’s death rattle, there is author Paul Gillin’s “Newspaper Death Watch” site, which tracks the agonizing process of economic necrotization like a running autopsy. And here are some predictions for 2009; and a feature in Atlantic magazine reflecting on the potential death of the New York Times. And here, finally, is an unmistakably polemical article, published in The Nation, that represents the old-guard leftist view that newspapers should be rescued by government subsidies.

In yesterday’s post, I addressed some of the structural dynamics of the newspaper business that are rendering the industry obsolete. In this second post, I will address a more controversial issue: the pervasive corporate culture in newspaper journalism that, by resisting new market realities, is accelerating the industry’s decline and obsolescence.

 Let’s start with a question. Why do so many established journalists dismiss the Web-driven technological revolution that is transforming their industry? The answer, I believe, is the way journalism is organized as a quasi-profession. In other words, the origins or this resistance can be found in journalism’s conservative and self-interested corporate culture.

Journalism is not, in fact, a “profession” according to any formal definition of that term. Professions like law and medicine are characterized by barriers to entry based on formal exams and credentials. Professions moreover enjoy monopoly entitlements, restrictive arrangements, and self-regulatory powers. Members of professional bodies are subject to discipline, and even expulsion, for malpractice or misconduct. Professionals, as we know, tend to enjoy high material and status rewards. Not surprisingly, professionals organize themselves to protect and promote their specific interests – especially their monopoly power.

The uncomfortable truth for journalists is that, whatever their pretensions, they are not professionals. So-called “professional” journalism is also relatively recent. It emerged after the Second World War, mainly through the creation of journalism schools which attempted to bring quasi-professional standards to a business that was, at that time, far from prestigious or glamorous.

Then journalists got their big break with Watergate. Indeed, the professional pretensions of journalism picked up powerful momentum when the Washington Post effectively brought down President Richard Nixon. Nixon’s disgrace and downfall was a great triumph for American journalism. Following the Watergate scandal, enrolment in American and Canadian J-Schools soared. Journalism was now the “fourth estate”, a player in the system, a powerful force in public life.

That was undoubtedly true. But what journalism was not – and still is not – was a profession. What is true, however, is that journalists – especially in North America – have appropriated the status attributes of professions. Thus the journalism establishment, with its close institutional ties to J-Schools, feels strongly motivated to defend its “professional” status and interests just like lawyers and doctors do when their monopoly entitlements are threatened.

It is for this reason that established journalists regard citizen journalism as a usurpation of their professional monopoly and the status benefits it confers. Journalists argue that, since they are educated and trained, they possess professional credentials. Citizen journalists on the Web, by contrast, are rank amateurs.

For an illustration of this conservative reflex, let’s visit the Ivory Tower of journalism education in America. At Columbia University’s prestigious School of Journalism, the school’s dean Nicholas Lemann published an article in The New Yorker magazine titled “Amateur Hour: Journalism Without Journalists”. This is what Lemann had to say about citizen journalism:

“To live up to its billing, Internet journalism has to meet high standards both conceptually and practically: the medium has to be revolutionary, and the journalism has to be good. The quality of Internet journalism is bound to improve over time, especially if more of the virtues of traditional journalism migrate to the Internet. But, although the medium has great capabilities, especially the way it opens out and speeds up the discourse, it is not quite as different from what has gone before as its advocates are saying.”

Lemann was admirably diplomatic, but not enough to conceal his unmistakably condescending attitude. No one should be surprised that the dean of a well-known American journalism school that serves as a gatekeeper into the highest ranks of the “profession” is sceptical about the rise of citizen journalism. Journalism schools are part of the same institutionalized quasi-professional elite that preserves, and defends, the material and status benefits of its members.

A subject that is truly crying out for serious investigation, however, is the role of journalism schools. It’s a widely known, but never admitted, fact that many J-Schools in North America are less committed to professional training as they are to ideological indoctrination (usually of the Marxist variety, though because journalism professors these days don’t actually read Marx, deference is usually due to Noam Chomsky and his disciples). I can’t count the number of times fresh-faced journalism students have come to “interview” me, regurgitating the vaguely formed Marxist notions of their esteemed professors. When you think about it, J-Schools should be natural allies of citizen journalism — and some J profs undoubtedly count among Web 2.0 evangelists — but most of them are too tied to the institutionalized values of the “profession” to make the break.

There are other troubling issues at J-Schools. Take Nicholas Lemann’s own school in New York. Columbia’s J-School has been shaken by an ethical scandal after students were caught cheating on an exam for a required course. And what was the course? Unbelievably, it was called “Journalism Ethics”. When students at America’s top journalism school are cheating even before they get real jobs, little wonder journalism has such a poor reputation with the public.

Now let’s visit one of the most prestigious journalism institutions in the world: the New York Times. The paper’s executive editor, Bill Keller, wrote the following about citizen journalism: “I still think his concept of a minimally edited, largely self-regulating information world tilts too far toward a romantic’s vision of anarchy. And the proliferation of blogs, while wonderful in many respects, has yet to make a compelling case for the wisdom of crowds. Sometimes citizen journalism resembles mob journalism, or vigilante journalism.”

This is an intriguing point of view for a top executive at a newspaper that has been discredited by shocking ethical scandals and management fiascos. US News & World Report described the New York Times’ tarnished reputation a “crisis of confidence in American journalism”. When established newspapers like the New York Times lose the trust of their readers, no wonder many are embracing Web-based citizen journalism, which has the additional virtue of fostering and enhancing new forms of social capital and civic engagement.

Only last week, marketing guru Seth Godin was lamenting the decline of the New York Times. “Page by page, section by section, the influence of the New York Times is fading away,” noted Godin. “Great people on an important mission, but their footprint is shrinking and the company is losing stock value and cash and power and the ability to have the impact that they might.”

According to Godin, the malaise at the Times is that it’s living in the past. “The entire mindset of (every) newspaper has been driven by the cost of paper, the finite nature of paper, the cost of delivery and the cycle of a daily paper,” he observed. “You run enough articles to fit as many ads as you can sell. These are artefacts of a different age, one that today’s consumer doesn’t care a whit about. Lots of organizations go through this analysis. How do you leverage your brand or your customer base to get to the next level, to enter new markets or new technologies — and do it while running your old business. And almost without exception, organizations are run by people who want to protect the old business, not develop the new one.”

The problem at the New York Times pervades most newsrooms at largely daily papers: a corporate culture of complacency based on “professional” arrogance. It is astonishing, for example, how much time senior editorial managers spend mobilizing huge internal resources to “game” journalism awards – like the Pulitzer Prize – in order to enhance their own reputations and promote their own careers. Many newspapers managers are more interested in serving themselves than they are in serving their readers. The New York Times indeed paid a heavy price for that professional narcissism when it was revealed that its ethical breaches were institutionalized right up to senior management.

It still might be argued that only institutional forms of journalism – i.e. media corporations – can produce “excellence” by devoting significant financial resources to newsgathering by staff reporters working in vertical bureaucracies. Bill Keller makes this argument when he dismisses citizen journalism as “anarchy”. The same argument is often made about states. We need states, with their bureaucratic forms of social organization and coercion, because the alternative is anarchy. Proof is the tragic consequences of failed states and stateless societies in places like Somalia.

This argument, on the surface, has some merit. But there is one important difference. When states fail, the tragic consequences are due to the absence of an alternative. In journalism, however, there are substitutes to industrially-produced newspapers and the vertical corporations that manage the work of journalists who create and package their content. The alternatives are already available on the Web.

Newspaper journalists sidestep this by focusing on the qualitative aspect of citizen journalism. Retreating behind their credentials-based “professional” status, they dismiss citizen journalism as little more than a hobby. Though as we have seen, there is no formal legitimacy to these professional status claims. They are pure pretensions.

As the newspaper industry’s crisis deepens, these professional convulsions become even more elaborate. Only last month, some fifty top American newspaper executives held a “crisis summit” sponsored by the American Press Institute. This closed-door, invitation-only powwow in Virginia had the self-appointed mandate of “saving an industry in crisis”. It would be churlish to doubt the gravity of this event, or to question the sincerity of its distinguished participants. But let’s get real. This was hardly what the newspaper industry needed: a blue-ribbon, country-club meeting bringing together the same elder statesman of American journalism who are largely responsible, directly or indirectly, for the industry’s decline in the first place. Are these really the people who are going to “save” the industry? The proceedings, in the circumstances, must have resembled the moribund Third Republic voting its own dissolution in a Vichy casino.

Beyond status, the real issue, of course, is power. The Web is diffusing power away from bureaucratically organised forms of journalism that, traditionally, have required massive capital investment. Power is shifting towards spontaneously organised journalists who can gather and disseminate news with no barriers to entry. For established forms of journalism, the writing is on the wall – and on their balance sheets.

No wonder that the old guard is declaring a cautious truce, with dignity intact. Bill Keller at the New York Times even agrees that citizen journalist advocates like Jeff Jarvis may have a point after all.

“Over the years he and I have edged somewhat closer,” says Keller. “Not to put words in Jeff’s mouth, but he now, I think, acknowledges the utility of professional judgment, skills and standards in helping an audience navigate the new information world, and the advantages of having stable institutions to pay for such things as a Baghdad bureau and to protect First Amendment rights in court. In turn, I’ve embraced the value of the audience as a participant in gathering, truth-squadding and appraising information.”

Keller’s grudging concession, while commendable, requires scrutiny. No doubt that the audience – in other words, the public – is embracing information gathering and sharing thanks to the Web. Less certain is that we need “institutions” like the New York Times to report from Baghdad or protect our fundamental freedoms in the courts. Who says that only established newspapers can perform these functions?

Also, why do established journalists claim, as Keller suggests, a monopoly on “professional judgement, skills and standards”? This is absurd. For counter-evidence, take the example an unknown American journalist, Joshua Micah Marshall, who earlier this year won a prestigious George Polk Award for legal reporting. Marshall was not a salaried investigative reporter with the New York Times, Washington Post, or Los Angeles Times. He had published his tenacious citizen journalism on his own website, TalkingPointsMemo. Marshall has never attended journalism school. He holds a PhD in history.

What is certain is that the underlying notions about “news” must be seriously re-examined, if not entirely reinvented. Jeff Jarvis has contributed to this debate by pointing out that the newspaper “article” – journalism’s main unit of production – is outmoded. Articles are static, whereas news is dynamic. Others, like Steve Outing who writes about newspapers in Editor & Publisher, agree. Outing has called for a wholesale redefinition of “news”. Many other intelligent opinions have joined this discussion. The question is thus posed: What is “news”?

As that debate moves forward, you can be certain that the industry will rapidly reconfigure itself as the shake-out starts to get brutal. There will be big winners and losers. It’s always hard to predict merger-and-acquisition activity. But it’s possible that we will soon witness another round – successful this time – of multimedia “convergence” plays as news organizations look for New Media partners in an attempt to reinvent themselves.

News organizations like Bloomberg, Thomson Reuters, Dow Jones appear well positioned for the coming shakeout, if only because they don’t have a lot of ink on their fingers. By contrast, the newspaper-based cooperative, Associated Press, is already struggling. In fact, only this week we learned that CNN, the global news television network, is attempting to knock AP out of the box and drive it out of business by selling its own news as a wholesale provider. Who could have predicted, only a year ago, that CNN would take a run at AP? It’s a sign that more of these kinds of moves are in the works.

The big losers, of course, will be the ink-stained newspaper groups weighed down by layers of legacy assets – or so-called “whale shit”. Some of them, like the Wall Street Journal, may survive. Most will not. And the date of their extinction from the media landscape will likely come before 2043. Steve Rubel, in-house PR blogger/guru at Edelman, puts the date at 2014 — a decidedly more imminent and daunting deadline.

Established newspaper journalists meawhile will be swaggering without their customary self-assurance as the creative destruction of the Web 2.0 revolution sweeps through their once proud “profession”. In newspaper journalism’s senior management ranks, many will even have to endure the necessary task of shovelling a lot of whale shit out the door. It won’t be fun.

Here’s the good news. In 2043, newspapers may no longer be around, but we will still be consuming news and information. Only it might not be called journalism.

The jungle drums predicting the death of newspapers seem to be growing ominously louder every week.

When established titles like the Christian Science Monitor announce they will stop printing a newspaper and shift their product online, it would be naïve not to interpret this move, and many others, as a sign that the industry is entering a painful period of massive restructuring.

Newspapers, and the media industries in general, are also going through severe cost-cutting measures, including layoffs, as they watch their top-line revenues go south. The only question is how long the agony will last. Maybe not the death rattle yet, but the prognosis is bleak.

Four years ago when Philip Meyer predicted, in his book The Vanishing Newspaper, that the final copy of the world’s last printed newspaper will roll off a printing press in the year 2043, it seemed vaguely alarming. The same dire scenario was evoked earlier this year in a New Yorker article citing Meyer’s book. Imagine that, a world without newspapers. Today Meyer’s prediction actually seems exceedingly diplomatic. That date is thirty-five years away. That date conveniently allows the entire generation in the top ranks of the newspaper business today to retire comfortably or go quietly to their graves before the ignominy of their profession’s unquiet demise.

Unquiet indeed. The debate about the death of Old Media is getting nasty. The latest salvo was a wicked piece in Slate that subtly traduced Web 2.0 media evangelist Jeff Jarvis, whose BuzzMachine blog enjoys a wide following. The Slate article was titled: “Is Jeff Jarvis gloating about the death of print?” Jarvis indeed has established a reputation for heralding a bold new era of “citizen journalism” based on networked Web 2.0 platforms. As an evangelist, he has been sharply critical of stubborn believers in the Old Religion – or, rather, Old Media – who just don’t understand that their business model is dying.

Slate’s slicing up of Jarvis was an Old Media counter-strike, though its target was more Jarvis personally than the substance of his ideas. Until now, Old Media advocates have been remarkably stoical as Web 2.0 evangelists, filled with passionate intensity, scoff at their outdated methods and proclaim their imminent extinction. True, some polemical Old Media voices have spoken up, like Andrew Keen, whose book The Cult of the Amateur is a reactionary defence of established media institutions and a shrill assault on citizen journalism. Conservatives claim that Web 2.0 evangelists are self-promoting hucksters jet-setting around the globe on someone else’s dime to industry conferences, where they scratch around for consulting jobs, pick up speaking gigs, and flog their snakeskin oil with juiced-up slogans and buzz-words about the inevitability of “social media”. That’s more or less the portrait of Jeff Jarvis that comes into focus in the Slate article.

I must confess that I frequently find myself agreeing with Jarvis’ analysis of the newspaper business. Perhaps that’s because, like him, I am a product of Old Media who now spends a good deal of my time thinking about New Media business models. I began in newspaper journalism 25 years ago – worked as a reporter, critic, correspondent, columnist, and eventually became Editor-in-Chief of a large national broadsheet, the National Post. I’ve also co-hosted a national TV show in prime time. I’ve moreover written two books about the Old Media business. The final chapter of one of them, published in 1999, was titled, “The Multimedia Revolution”.

In short, my long experience in newspapers and television procures a certain degree of confidence when critiquing Old Media. I know that business. At the same time, I don’t necessarily share the passionate convictions of Web 2.0 evangelism. While there can be little doubt that the Web 2.0 revolution has tremendous momentum at present, my own approach is more analytical than normative, more secular than evangelist.

My cards are now on the table. Now let’s return to newspapers. There can be little doubt, as previously noted, that the newspaper business is either dying or, at best, undergoing a profound structural transformation. There are many ways we can examine what is happening to newspapers, and bloggers like Jeff Jarvis are necessary voices in that discussion. So are the voices of his critics. I’d like to focus here on two issues:

First, the structural dynamics of the newspaper business that risk rendering the industry obsolete (I will address this issue in this post).

Second, the pervasive corporate culture in newspaper journalism that constrains the business from adapting to new market realities (an issue which I will address in a second post tomorrow). 

First, the industry’s structural dynamics. Let’s look at three pillars of the newspaper business: advertising, printing/distribution, and editorial.

Advertising. Five years ago when I was running the National Post, the advertising department was over-staffed with old-style “order takers”. We had dozens of advertising reps sitting in cubicles waiting for the telephones to ring. The senior advertising managers meanwhile were building good will in the old three-martini-lunch tradition. As Editor-in-Chief, I was dragged out to annual golf tournaments, pressured to make rubber-chicken speeches before clients, and arm-twisted into attending countless sales meetings because, I was told, big clients are always impressed when the top guy from “editorial” is in the room.

That was in 2003. The Web was exploding all around us. And yet I don’t think these grinding advertising sales rituals had changed much since the 1950s. I knew that the industry’s revenues were shifting online, and kept saying it. But nobody was listening. We didn’t even have editorial control of our own website. I logged on one day and punched in “George Bush”. This is the response the came up: “zero matches”. That’s when I knew we had a problem. And we did. Now let me ask this question: Was it really any different at most major daily newspapers?

Distribution. The first thing I learned as Editor of the National Post was that, while I was the most glamorous member of the paper’s executive team (editorial enjoys high prestige vis-à-vis the other departments), I certainly didn’t command the biggest budget. My editorial budget was less than 25% of the paper’s total cost structure. More than 50% of the budget was devoted to the grubby, low-prestige area of “manufacturing” – in other words, printing the newspaper. We were blowing half our revenues on just getting the product off printing presses (which, by the way, were in some cases owned by our fiercest competitors). Another big whack of the budget was getting the newspaper distributed – to subscribers’ homes, to hotels, to airports, and so forth. In sum, the vast majority of our cost structure was devoted not to “journalism”, but to below-the-neck functions of manufacturing the product and getting it to market.

I remember once giving a boardroom presentation to the senior corporate officers of my parent company, CanWest Global, a conglomerate that owns newspapers, television networks, radio stations, Web properties, and cable TV channels. The CEO was in the room, surrounded by the company’s top corporate officers. I was on my feet going through my plans and budget. Out of the corner of my eye, I noticed one of the top guys in the company, Tom Strike, tapping furiously on his calculator. Eminently likeable, Tom was known as a sharp “numbers” guy. As my publisher and I were walking everybody in the boardroom through our distribution costs, Tom was calculating the per-copy “yield”. I had a sinking feeling that his calculator was not my friend.

I was right. At one point, Tom looked up and said: “You’re in a shitty business”. Gulp. But he had a point. We had a negative per-copy yield. That’s why we were losing money. It wasn’t my editorial expenses. It was the enormous cost of getting the product printed and distributed. It was brain damage. When you are spending most of your budget getting a product to the doors of customers who don’t even have time to read it, but buy it out of habit or because it’s discounted, you’re in a shitty business.

No wonder newspapers like the Christian Science Monitor are going online. If you’re going to be disintermediated, you might as well disintermediate yourself.

Editorial. Most journalists are smart and hardworking, if egomaniacal and paranoid. I was once advised by a wise newspaper veteran that all newsrooms are essentially “adult daycare centres”. Not far from the truth. The real problem however, from a business point of view, is that journalists are totally disconnected from the realities of the business that employs them. And today, they are whistling past the graveyard.

I used to put my senior editors on the spot when we were discussing what should go on the front page. My ideas were much more expansive and less restricted by established journalistic values. I remember my Managing Editor once objecting to my lunacy by insisting to me: “But we have to the put the news on the front”. I replied: “News? Who says what’s news? You do?” Embarrassed silence.

Today, of course, newspaper editors are no longer the powerful “news” gatekeepers they used to be.  The rise of Web-based citizen journalism is disintermediating their traditional functions as gatekeepers and packagers. Newsgathering sites like Slashdot, Wikinews, Agoravox, Indymedia and many others have shifted power from “professional” journalists towards anyone who wishes to participate in the dissemination of information. In South Korea, for example, the OhMyNews site — whose motto is “Every Citizen is a Reporter” – has had a major impact on national politics in that country.

News has also been transformed by Web 2.0 platforms like Digg and Twitter. As the information flows following the recent Bombay terrorist attacks demonstrated, networked platforms like Twitter can get the “news” out faster than traditional media. As in Bombay, earlier this year when the devastating earthquake struck China, the first reports came not from media news reports, but from Twitter “tweets”. Thanks to Twitter, well-known blogger Robert Scoble reported the Chinese disaster an hour before major media like CNN. Scoble had been reading Twitter tweets from people in China while the earthquake was actually shaking the ground under their feet. In May, New Scientist reported that Facebook, Twitter, and GoogleMaps had been more efficient than traditional emergency services — which often rely on mass media — in responding to devastating California wildfires and the tragic Virginia Tech shooting rampages the previous year.

Make no mistake, Web 2.0 platforms are having a profound impact on how information is gathered and disseminated. News organisations, understandably, are inventing all sort of reasons and rationalisations to convince themselves that their own professional values and business models are unassailable (more on that tomorrow). In truth, they don’t have the luxury of being indifferent to these powerful forces. News organisations not only must reinvent their business models tied to vertical institutional structures and heavily dependent on increasingly stranded assets; they must also bring about a revolution in their corporate culture and professional values.

The first revolution (industry structure and organisation) is happening now, establishing its own facts. The second revolution (professional values and behaviour) will be harder to accomplish because it is meeting powerful forces of resistance. I will return to this subject tomorrow.

The presidential election of 2008 shall go down in history for an obvious symbolic reason that will inspire future generations. Yet while pundits were focused on the question of Barack Obama’s race, another largely overlooked factor was his powerful techno-demographic appeal.

We know that Obama’s landmark victory was due, in part, to a groundswell of support among young Americans. Early in his campaign, political pollsters were observing that Obama was “rocking the youth vote”. This was proved true. Exit polls on Tuesday revealed that Obama had won nearly 70% of the vote among young Americans under 25 — the highest percentage since U.S. exit polling began in 1976.

Obama, in a word, enjoyed a groundswell of support among the Facebook generation. He indeed will be the first occupant of the White House to have won a presidential election on the Web.

This election was the first time that all candidates – presidential and congressional — attempted to connect directly with American voters via online social networking sites like Facebook and MySpace. It has even been called the “Facebook election”. It is no coincidence that one of Obama’s key strategists was 24-year-old Chris Hughes, a Facebook co-founder. It was Hughes who masterminded the Obama campaign’s highly effective Web blitzkrieg – everything from social networking sites to podcasting and mobile messaging.

Facebook was not unaware of its suddenly powerful role in American electoral politics. During the presidential campaign, the site launched its own forum to encourage online debates about voter issues. Facebook also teamed up with ABC for election coverage and political forums. And CNN teamed up with YouTube to hold presidential debates.

Obama’s masterful leveraging of Web 2.0 platforms marks a major e-ruption in electoral politics – in America and elsewhere - as campaigning shifts from old-style political machines, focussed on charming those at the top of organisations, towards the horizontal dynamics of online social networks. The Web, a perfect medium for genuine grassroots political movements, is transforming the power dynamics of politics. There are no barriers to entry on sites like Facebook and YouTube. Power is diffused towards the edges because everybody can participate. The Web is being used not only for vote-getting but also – as the Obama campaign demonstrated — for grassroots fundraising. Obama’s campaign drummed up more than $160 million from supporters who gave comparatively tiny amounts — $200 or less.

What was remarkable about the Obama team’s online efforts was how comparatively inexpensive they were. Obama’s spending on online advertising was comparatively tiny – less than $8 million. That pales into insignificance against his TV spending, including $4m on a half-hour TV special in the final week alone. About $3.5 million of the online spend was on adwords by Google searches. The spending figures for Facebook were also small — $467,000 in total, almost all ($370,000) in September.

In political campaigns, the Web is low-cost but high-reach. According to a survey by the Pew Research Center, nearly half — or 46% — of Americans used the Web, email or text messaging for news about the presidential campaign, to contribute to the debate, or to mobilize others. Some 35% of Americans said they’d watched online political videos — three times more than during the 2004 presidential election (before YouTube was created). And roughly 10% said they’d logged on to social networking sites like Facebook and MySpace to engage in the election.

Obama, who was often seen thumbing messages on his Blackberry during the campaign, is a new-generation politician who shrewdly understands the electoral power of the Web. Pulling out all the Web 2.0 stops, the Obama campaign used not only Facebook and YouTube, but also MySpace, Twitter, Flickr, Digg, BlackPlanet, LinkedIn, AsianAve, MiGente, Glee and others.

Obama was by a long stretch the most effective online politician during the presidential campaign – not only against John McCain, but also against his Democratic rival Hillary Clinton. For the past two years, Facebook has overwhelmingly been pro-Obama virtual territory. Some have attributed Obama’s victory to a “Facebook effect”.

At 47, he may be older than the average user there, but Obama is a natural Facebook politician. On his personal profile there - which featured his “Our Moment is Now” motto - Obama named his favourite musicians as Miles Davis, Stevie Wonder, and Bob Dylan, and listed his pastimes as basketball, writing, and “loafing w/kids” (note the hip shorthand).

The 72-year-old John McCain, by contrast, never managed to connect on Facebook. He gave one of his pastimes as “fishing” - which may be popular in some places, but ain’t hip - and listed Letters from Iwo Jima among his favourite movies. His profile even got “punked” by a prankster who hacked it and posted a phony policy announcement on his online profile: “Dear supporters, today I announce that I have reversed my position and come out in full support of gay marriage…particularly marriage between two passionate females.”

The statistics are telling. Obama had more than 2 million American supporters on Facebook; McCain, just over 600,000. On the microblogging platform Twitter, Obama could count on more than 112,000 supporters “tweeting” to get him elected. McCain, for his part, had only 4,600 followers on Twitter. (A map of declared support by American Twitter users found every state overwhelmingly Democrat, apart from South Dakota - which was only “mildly” Democrat.)

On YouTube, Obama’s supporters uploaded more than 1,800 videos onto the BarackObama.com channel, which counted about 115,000 subscribers. The channel attracted more than 97 million video views by some 18 million channel visits. Compare that to McCain’s YouTube presence: only 330 videos were uploaded to the JohnMcCain.com channel, which attracted just over 28,000 subscribers. The McCain channel attracted barely more than 2 million visits and some 25 million video views. Obama beat McCain 4 to 1.

The YouTube coup de grace was the blockbuster “Yes We Can” videoclip. The viral circulation of that video, watched by millions of Americans only days after it was first posted, gave Obama solid electoral credibility in Middle America. Suddenly he was like a pop star on MTV. The video wasn’t even made by the Obama campaign team: it was produced spontaneously by the hip hop star Will.i.am, from the group Black Eyed Peas.

Obama also effectively used podcasts and electoral messaging to mobile devices (he had already been doing so as a U.S. Senator). As one observer put it: “While Obama was making great use of podcasts, John McCain was missing in action.” The McCain campaign finally came up with the idea of posting a videogame called “Pork Invaders” on his Facebook page to underscore the war hero candidate’s determination to take on Washington “pork barrelling” (in which politicians manoeuvre lucrative schemes for their areas into legislation, to ensure re-election or repay favours bought to get them elected). The Obama team, meanwhile, was harnessing the power of network effects through an “Obama app” for iPhones, which allowed supporters to spread the pro-Obama message to everyone on their contact list.

Obama had already honed his Web 2.0 campaigning skills against Hillary Clinton. While political pundits were following the Obama-Clinton head-butting on the hustings, Obama was outmanoeuvring his Democratic rival below the radar on Facebook. In early 2007, more than a year before he won his party’s nomination, Obama had attracted a massive following on Facebook while Hillary Clinton was struggling with the negative fallout of a Facebook movement called “Stop Hillary Clinton”. While Obama’s Facebook page had attracted more than 250,000 members, Clinton’s page counted a paltry 3,200.

The Internet, to be sure, had already been deployed in political campaigns, but was used mainly to raise money. But as voters massively shift towards the Internet for social interaction, consumer purchasing, and political participation, office-seekers are rushing to establish an online presence and connect with voters on the ground. During the U.S. elections, more than 500 American politicians had their own Facebook page. Many more will in future elections – not only in the United States, but also in Britain, France, Germany, Canada, Australia and other democracies. From now on, success in electoral politics depends on having friends in low places.

U.S. election update…Here is an article by my colleague Soumitra Dutta and I published today on the London newspaper The Guardian’s website. It’s on the powerful role of Facebook, MySpace, YouTube, Twitter and other Web 2.0 platforms in Barack Obama’s electoral victory. I will publish another version of this article shortly as a blog post with links, but it’s available now on the Guardian website.

The next time you find yourself in a doctor’s office, remind yourself that you’re playing a pro-active role in the Web 2.0 revolution that is transforming health care.
A great deal has been written about “e-health” following a number of ambitious initiatives aimed at improving both the delivery and efficiency of health care. The buzzword employed to describe the e-health revolution is “patient-centred”. Sounds like a self-evident truth, but it’s taken a long time for health professionals to realize, and say out loud, that it’s all about the patients.
One of the driving motivators behind the e-health movement is the enormous cost, and scandalous inefficiency, of so many national heath-care systems — particularly in countries like Britain. There is a growing consensus that it’s time to bring radically innovative solutions to health care. Many of these bold initiatives, not surprisingly, are Web-based.
I will focus here on how Web 2.0 social networks are e-rupting the traditional market dynamics in the patient-doctor-pharma triangle. But before I move onto that issue let’s scope out, in big bullets, some other areas where Web 2.0 tools are transforming health care:

• the explosion of websites (like WebMD) and virtual worlds (Second Life) which provide health information, thus empowering consumers with knowledge thanks to easy access to facts about diseases and treatments;
• the emergence of online networks (like DailyStrength) that socially link patients who are sharing information and providing mutual support;
• the foray of giants like Google and Microsoft into the personal health data business, offering patients more control and portability of their personal heath records;
• the decentralization of health-care delivery thanks to Web tools used for tele-medecine and distant diagnosis.

Each of these trends represents a revolution of its own, and there has been wide-ranging debate and discussion (and controversies too) about impacts and outcomes in all these areas. An even more powerful Web 2.0 e-ruption is revolutionizing the power and market dynamics between consumers, doctors, and the pharmaceutical industry.
Let’s first look at the patient-doctor relationship. Needless to say, as consumers are increasingly empowered by information and knowledge thanks to reliable health information on the Web, it’s affecting the status dynamics between doctors and patients. In the United States, for example, more than half of the adult population consults the Web for health information. People are no longer arriving at the doctor’s office in a state of nervous ignorance about their health. Thanks to the Web, the power of information is no longer asymmetrical. Frequently, patients show up with a precise idea of their possible ailment and, what’s more, with suggestions about treatment options.
In Throwing Sheep in the Boardroom, we devote an entire section of the book to Web 2.0 revolution’s impact on social status. The Web 2.0 status e-ruption has radically transformed traditional value perceptions based on title, rank, and social prestige. As status become increasingly democratized, established professionals are not only suffering from diminished status, but are increasingly finding themselves subject to ratings assessments of their clients.
In the academic world that I inhabit, websites like RateMyProfessors have turned the tables on teachers and professors as their own students rate, rank and review them transparently for the whole world to see. More than a million teachers have been, whether they like it or not, rated on this site. This bottom-up ratings system has now spread to the medical profession with sites like RateMDs.com. Even nurses are rating physicians on NursesRateDoctors.com. It is a safe bet that doctors, like professors, don’t particularly enjoy being rated by their subordinates and customers. In fact, the name of the NursesRateDoctors site was so contentious that its owner, Careseek Inc., hastily rebaptized it with a more neutral name: NursesRecommendDoctors.com. Still, it’s easy to see how these Web 2.0 e-ruptions are impacting traditional notions of professional status. There is even evidence suggesting that patients trust online e-groups as much, if not more, than advice from doctors.
Now let’s look at the relationship between doctors and pharma companies. It’s no secret that Big Pharma companies suffer from a negative reputation due to their marketing methods to promote drug products to the medical profession. And by implication doctors, it is often claimed, are frequently too susceptible to the blandishments of Big Pharma marketing reps whose “doctor detailing” strategies include abundant supplies of free drug samples, free meals, free holidays, and assorted other freebies as tacit inducements that help build relationships. There has been a longstanding debate about the ethical probity of doctor detailing, but it’s not the focus of our concern here.
What is pertinent here is Big Pharma’s market model to get their products into the hands of consumers. Let’s start by quantifying the industry. Big  Pharma is big business: the top 10 global pharma giants have annual revenues well in excess of $300 billion. Industry leader Pfizer’s revenues exceed $50 billion.
Big Pharma spends massively on marketing its products. Some indeed claim that their marketing budgets are actually bigger than their much-vaunted R&D spending. In the United States, Big Pharma spend billions (estimates put the figure at roughly $5 billion) on so-called direct-to-consumer advertising, most of it on television commercials for “blockbuster” drugs. Direct-to-consumer drug advertising is highly controversial (and banned in Europe). Its critics claim, among other things, that Big Pharma advertising incites consumers to demand medication, thus increasing costs burdens on the entire health system.
In the United States, Big Pharma actually spends more on doctor detailing – roughly $7 billion in 2005 according to official U.S. government figures — than on consumer advertising. This reveals that, even where direct commercial advertising is allowed by law, Big Pharma still devotes more money to direct-to-doctor marketing. Doctors, in short, are Big Pharma’s main marketing conduit. In the United States, Big Pharma employs an army of some 82,000 marketing reps (at a cost of roughly $170,000 per rep in salary and expenses) to market drugs directly to doctors.
Do the math and you’ll grasp pretty quickly that Big Pharma doctor-detailing marketing is a hugely costly operation. Those numbers must seem even more staggering at present, when Big Pharma is swallowing a bitter pill of deep crisis triggered by patent expirations, slow top-line growth, and the drug industry’s negative image. Surely there must be a more efficient, and less controversial, way of marketing drugs.
Indeed there is. Thanks to the Web 2.0 revolution, Big Pharma can now dialogue directly with doctors — not on a one-on-one basis according to the old doctor detailing model, but through networked information-sharing on websites like Sermo.
Sermo is a social networking site for American physicians. The site, whose motto is ”know more, know earlier”, is a networked forum where doctors join professional discussions with medical colleagues on a wide range of issues. Launched in 2006, Sermo has received a good deal of mainstream media coverage, much of it posted right on the site.
One potentially contentious issue is Sermo’s business model. The site solicits no advertising, which at first blush seems commendably principled. On closer inspection, though, one learns that Sermo monetizes its doctor discussions and comments to “third-party” clients. Who are these clients? Some, it is true, are government agencies and private medical researchers interested in obtaining insights into issues and trends in the medical profession. But Big Pharma is also paying Sermo big bucks for privileged fly-on-the-wall insights into what doctors are saying to one another. When a group of doctors are discussing online their preferred treatments for a specific disease, Sermo sells that discussion to Big Pharma clients. The world’s biggest drug maker, Pfizer, has even partnered with Sermo.
“Pfizer takes a leaf out of Facebook”, reported the Financial Times. Others are more troubled, accusing Sermo of “letting the enemy in” by selling doctor conversations to Big Pharma. Sermo, for its part, has argued that its monetization model is merely a way to “reinvigorate the productive dialogue between physicians and industry that improves the medicines we use and ultimately the patient care we deliver.”
Has Sermo sold out to Big Pharma? Maybe. What is more certain, however, are big changes coming to Big Pharma’s business model. If Big Pharma companies can use Web 2.0 tools like Sermo to market their products to doctors, albeit indirectly, it won’t be long before they’ll be taking a hard look at their doctor-detailing budgets.
Against this backdrop, the implications for the pharma-consumer relationship are clear. The shift in the United States towards direct-to-consumer advertising has already put Big Pharma in direct contact with consumers. Now Web 2.0 social networking sites give the industry more creative ways to connect with both doctors and consumers. Big Pharma can also use Web 2.0 collaborative tools to crowdsource R&D initiatives with scientists and experts beyond their own bureaucratic silos. This in fact is already happening.
Concerns about possible Big Pharma manipulation of Web 2.0 tools to co-opt doctors and hard-sell consumers, while they shouldn’t be dismissed entirely, can be alleviated by the knowledge that, even though sites like Sermo are closed, information in cyberspace is transparent, horizontal, and instantaneous. There are already well-informed blogs, like In the Pipeline, that provide detailed information about the goings-on inside Big Pharma and the medical profession. Another American blog is called Health Care Blog.
So is the Web 2.0 revolution a timely e-ruption that Big Pharma can seize upon to transform its business model in order to steer through a crisis? Not so fast. Industry observers have noted that, while Web 2.0 is staring them in the face, Big Pharma companies are slow-moving, conservative, and deeply entrenched in a bureaucratic culture instilled by an obsession with government guideline compliance. The industry has hardly been energized by Web 2.0 into a “breakout mentality”. One report says that Big Pharma is still “stuck in Web 1.5″. The industry, instead of embracing Web 2.0, has been focusing branding efforts mainly on online info centres and thus failing to engage consumers in an authentic conversation about health care.
Big Pharma companies will get their act together soon enough, especially when their revenues start heading south. In the meantime, get ready for a major Web 2.0 e-ruption throughout the entire health care industry. Consulting your doctor will never be the same.