James Ledbetter asks some searching questions: were we duped into inflating the tech bubble or did the normally sceptical media fail us?
As the dotcom bubble recedes into the past, the historical analysis of the period goes on. The latest addition to the canon is a book by one of the "players" of the time and one of its keenest observers. Starving to Death on $200 million: The short, absurd life of The Industry Standard by James Ledbetter, tells the story of the internet era's quintessential magazine.
Like many of the internet companies it covered, the Standard (as it was known) was fantastically successful and, in many ways, reflected the experience of typical companies of the time, both at its height and in its demise.
In a fascinating and at times very personal memoir of the magazine's short life between 1998 and 2001, Mr Ledbetter takes the reader through a stupendously lavish era, through company bashes in Aspen and Barcelona, through European launches and on to the magazine's ultimate end, indebted and broken.
But the book is not just plain business nostalgia. In seeking to ascertain whether the magazine simply overdosed on bad management, or whether it was killed off by its backers at the powerful but controlling International Data Group (IDG), Mr Ledbetter also asks some searching questions about the role of the media in covering the technology boom. Were we duped into inflating the bubble or did the normally sceptical media, flushed with its own success, fail us?
It was certainly as much a media boom as it was a stock market one. During it, the business television channel CNBC became the most profitable cable channel in the US. The magazine sector exploded. Riding a similar wave as the Industry Standard was Business 2.0, Fast Company, Smart Business, Upside magazine and a whole host of other trade press titles and technology websites.
Launched in 1998 by Wired veteran John Battelle, the Standard was a "special project" at IDG, which had as much of a start-up mentality as the start-ups it wrote about, and turned its famed journalistic prowess into business success. By 2000 it had sold more advertising pages than any magazine in the US. At more than 300 pages, one of its mid-2000 editions was the biggest in US publishing history. With staff numbers expanding to more than 400, it had a bigger operation than Time magazine.
In October 2000, its meteoric success led it to launch an off-shoot, The Industry Standard Europe. Mr Ledbetter - then the New York Bureau chief - was sent over as editor-in-chief to launch the magazine from London. I know, because I was an editor head-hunted from the trade press to become the magazine's news editor, and I too was day-dreaming of 300-page editions.
But its success left the Standard, and others of its ilk, open to two journalistic sins: complacency and arrogance. As Mr Ledbetter recently wrote in the New York Times, during the internet's boom years "too often the new magazines and websites acted as incurious cheerleaders".
The evidence resides in the online archives. Barely a year before Enron's machinations brought it down, the Standard was calmly reporting of its "exclusive 20-year partnership" with Blockbuster video to deliver video-on-demand. In March 2001, the Standard ran a column declaring that "it is no coincidence that Altra, Enron and others have created successful business-to-business exchanges in the energy world".
But the Standard was by no means alone in being duped. In January 2001, Business 2.0 magazine was happy to report, unaware of the eventual irony, that "the cowboys at Enron firmly believe they can trade just about anything over the Web. They may be right." The magazine even put Enron chief executive Jeffrey Skilling on the cover of its August issue, a week before he abruptly resigned for "personal" reasons.
As Mr Ledbetter points out, the very people able to comment on the boom often had a vested interest in talking up the story, and therein lay the danger. Journalists were sourcing colourful quotes from the leaders of high-flying tech companies who could, simultaneously, be advertisers in their magazine and speakers at their events.
Furthermore, the sheer pace of the whirlwind-like market could be head-spinning. In August 1999, Mr Ledbetter appeared on CNNfn and was ambushed with a question on the impending flotation of a company about which he knew nothing. Scrambling for an answer, he found himself making it up. Mr Ledbetter is man enough to admit to this uncharacteristic lapse in order to make the point that despite his complete misrepresentation of the company's business, no-one noticed, nor seemed to care. The firm's stock doubled in value on its first day of trading - and, of course, it no longer exists.
Two years later, in August 2001, the Industry Standard - a magazine that could pull in $2 million in revenue each issue - had itself declared bankrupt. Did it jump or was it pushed?
In examining the corpse, Mr Ledbetter engagingly details the deadly combination of its mismanagement and the massacre of the Net companies on which it depended for advertising. It didn't help that it blew more than $8 million on Web software that didn't work and was locked into more than $56 million in real estate leases it couldn't honour.
Starving to Death is an engrossing tale. Along the way, the reader meets many of the fascinating and sometimes repellent characters that made up that strange era.
And the London edition? That closed in April 2001. RIP.
Mike Butcher: mike@mbites.com
