TOPICS > Nation

Background: Downsizing Dot-Coms

February 15, 2001 at 12:00 AM EDT
REALAUDIO SEE PODCASTS

TRANSCRIPT

SPOKESPERSON: You have the right to know…

TERENCE SMITH: In the past year, so many Internet news sites have come on hard times that people joke that they have gone from dot-com to dot-bomb. It’s a stark contrast to a year ago, when Internet stocks generally, and media Web sites in particular were flying high. Internet news drew millions during campaign 2000. One in five Americans went online for news about the election. But now, even the most popular sites are retrenching. Today, the venture capitalists who fueled the Internet boom are demanding black ink on the bottom line.

SPOKESMAN: For news 24 hours a day CBS.com on the Internet…

TERENCE SMITH: CBSNews.com has laid off a quarter of its Internet staff. CNN.com has also imposed cutbacks. And newspaper sites like The New York Times, The Los Angeles Times and the Knight-Ridder chain have let go significant portions of their digital staffs. Even Wallstreetjournal.com, the biggest site to charge a subscription for its service, has had only two profitable months since it launched more than four years ago. The year 2000 was particularly rough for the less established niche news startups. Voter.com, whose political news drew some three million visitors in November, had to shut down this month, due to insufficient funding.

SPOKESMAN: APBNews.com delivers targeted programs….

TERENCE SMITH: APBNews.com, an award-winning crime and investigative site that employed 150 journalists, expired January 2.

RECEPTIONIST: Good morning, Salon.com.

TERENCE SMITH: One of the more successful sites, San Francisco-based Salon, aims to create an upscale community. It features topic channels about books, parenting, business, sex and politics.

SALON.COM STAFF MEMBER: We have this two-parter, but I think what I might do is stick it in as a sidebar.

TERENCE SMITH: But in December, Salon cut 20 percent from its workforce because its costs were getting too high. Gallows humor pervades their newsroom. When the NewsHour arrived recently, Salon was covering the big story in the industry: Other dot-com layoffs.

SALON.COM STAFF MEMBER: They sent voicemail telling everybody to show up in one of two rooms the next day; one was the firing room and other one was the non-firing room. And then after they’d fired or not fired, they came and stood by each person’s desk until they’d erased the voice mail.

TERENCE SMITH: Layoff stories have become part of the Internet culture. Not everyone is experiencing dot-com doom. Brands partly owned by Microsoft — MSNBC and Slate — are getting heavy traffic, capitalizing on their partnerships.