One way New York reporters aggravate me is their insistance on using a "Great Man" theory to describe business.
Personalizing corporate struggles makes them more coherent as stories. But if real historians learned anything in the 20th century is that this misses the point.
Yet papers like The New York Times (from which this illustration was taken) continue to do it, as do magazines like Forbes and TV channels like CNBC. It's all about the egos at the top. Customers and operations have nothing to do with it. We're all pawns on their chessboard.
Here's an example. The frontier of internet commerce is reduced to the machinations of two men, Barry Diller and Henry Silverman.
Trouble is, this is not really an Internet commerce story. It's about referrals, a business Silverman was once badly burned by, and how Diller is trying to use them to extract commissions from real estate agents.
The fact is, neither Diller nor Silverman runs an Internet company.
Diller's Interactive Corp. does own Expedia, Lending Tree, and RealEstate.Com, among other online assets, and it earns about 3 cents on every dollar it takes in. But its primary assets are the old Home Shopping Network and the USA Network, and what its books will look like after its cable and entertainment assets are unwound (as they're in the process of being unwound) is not known.
Cendant isn't an Internet stock either. It owns Coldwell Banker, Days Inn, and Avis, among other things. It may be better known, however, for its 1998 accounting scandal, in which Silverman himself was actually the victim. He ran the hotel and travel company, HFS, which bought Cendant, then a collection of "savings clubs" (an early form of referral), based on the phony numbers. He eventually threw them back at shareholders, keeping only the name.
So why do an entertainment mogul and a hotel franchisor stand at the pinnacle of Internet Commerce? Because Diller says so. Diller has been spinning an Internet commerce story for three years now, and since such stories are easy to tell, the Times (like most publications) has been eager to listen. And in the latest chapter of that story, Diller has been buying Web real estate assets he aims to use in taking market share from Cendant (although Re/Max is probably a bigger story there).
But how do you get reporters to see your asset roll-up as a major story worth writing about? You personalize it. You make it Diller vs. Silverman, pointing out Silverman's failed experiment with Trip.Com and never mentioning your own failures like, say, CitySearch.
Let me add here that I don't blame the writer, Saul Hansell. A close reading of this long story indicates that he's as skeptical of Diller's blather as I am, as well as Diller's story. But Diller seems to have been the primary source here so he used Diller's spin to get this past his desk, along with Diller's headline.
I would have done the story, too, but I would have headlined it differently. "Has Barry Diller gotten a Clue yet?" would work for me. And the answer there may be no. Here's the money quote, from real estate industry publisher Brad Inman.
"Microsoft, Yahoo, everyone and their brother poured a lot of money into real estate. They come in starry-eyed and say these Realtors are idiots. They spend a lot of money. And they realize they can't unlock the role of the Realtor. So they get out."
What's the real story? Diller is trying to use the Web to create a giant real estate referral program, and Silverman, who controls about one-fourth of the nation's real estate agents, won't pay for the referrals. He won't pay cash for a story that nearly cost him his company. I can't blame him.