By: Steve Outing
New Century Network (NCN) fired its 40 remaining employees yesterday and today announced it had been dissolved by its board of directors. All NCN operations have ceased and insiders say discussions are in-progress about how to dispose of the organization?s assets.
In a statement issued at mid-day today, the NCN board said ?We were unable to agree on a business plan that would receive the support of enough partners to enable us to move forward. The world of content and commerce on the Internet has been transformed since NCN was created in 1995 … The challenge of finding a common strategy for NCN in this fast changing marketplace to accommodate the differing needs of the more than 140 newspapers represented by the owners and NCN affiliates has proved too daunting.”
NCN is a cyberspace consortium of nine of the largest U.S. newspaper companies, who initially ponied up $1 million each to fund a joint effort to exploit and promote the collective strength of the newspaper business on the Internet. But the organization was beset by a lack of consensus among its owners about what businesses the joint group should be engaged in. NCN’s charter required that at least a strong majority of the founders agree on any particular NCN business venture. For some of the major initiatives of NCN, enough of a consensus to move forward was not achievable.
Some of the initiatives that NCN was engaged in — such as a newspaper-wide Web site ad network, and an attempt to develop a Web search/directory strategy for use by newspaper sites — are expected to be continued separately by smaller groups of newspaper companies working together. The founders “couldn’t decide what they wanted to do with each other in this partnership,” deBoer says.
Most NCN board of directors members, who made the final decision to disband the organization on Monday, either did not return phone calls for comment or refused to talk about the decision. But board member Michael Newhouse of Advance Publications commented, “I’m very sad to see NCN end this way. I don’t feel like talking about it right now.”
Word of NCN’s final demise comes only two weeks after the company announced its second round of layoffs in a month. The first sign of serious trouble at NCN came several weeks ago, when 10% of the once 70-member staff were laid off and the “NewsWorks” newspaper Web site news aggregation and search service was cut back because NewsWorks was deemed as competing against the sites of NCN affiliates. Not quite two weeks ago, another 20 NCN staff members were laid off; those cuts emptied NCN of most of its content employees.
As reported in recent days in this column, NCN had been trying to put together a Web search/directory deal that would allow newspaper Web sites to add Yahoo!-like functionality. NCN team members had developed proposals that were on the road to perhaps making that reality, but NCN’s owners couldn’t agree on their interests in such a plan. deBoer says the search/directory strategy was NCN’s biggest initiative, and “we found ways to do it.”
Just last week, NCN officials were saying that the company would focus largely on its newspaper Web site advertising network, which had generated close to $1 million in national Web banner ad sales spread across NCN’s affiliate sites. The ad network was doing well, with projections for 1998 of three times that figure.
But even the ad network fell victim to the founding companies’ competing interests. Several NCN founding companies — most notably Knight Ridder, Cox and the Tribune Co. — have competing Web advertising networks among their own properties.
After its recent layoffs, NCN officials also had said they would focus on being an Internet tools and services provider for newspapers. A recent introduction was an HTML e-mail news delivery service used by affiliate newspaper sites. That too dies with NCN and its future under the aegis of some other entity is unclear.
It’s uncertain what will become of NCN’s work to date. According to CEO Lee deBoer, NCN’s assets will just “go away” unless someone comes forward to acquire them. deBoer will stay on to wind down the company, and he says NCN will entertain a liquidation of its assets. The most likely scenario is that some of NCN’s work will end up being run by other companies or a smaller group of companies — probably NCN members.
Whither NCN banner ads?
NCN newspaper affiliates might worry that the most immediate impact of NCN’s demise will be the national advertising that they were receiving. However, New York-based Real Media, a Web advertising network and technology provider that had a cooperative arrangement with NCN previously, has announced that it will step in to fill the void left by NCN.
Real Media president Dave Morgan says that his company had been providing technology to the NCN ad network and had been cooperating on national ad sales. While NCN’s sales reps were focusing on national banner ads placed onto newspaper Web sites, Real Media was focused on customized content sponsorships (for example, for aggregated content sites covering news and sporting events). Real Media focuses mostly on the newspaper industry and affiliated companies. It also counts as clients companies like Lexis/Nexis, TotalSports, Times-Mirror Magazines and The Headbone Zone.
For the short term, Morgan says Real Media will work with NCN’s wind-down team to physically maintain ad campaigns that already are running. He’s also talking with some of NCN’s owners about creating a joint venture that would keep the ad network concept running. He says Real Media is trying to move fast, and that the company already has relationships with nearly all of NCN’s affiliate newspapers. Still, some loss of income for the newspapers is likely, due to the loss of the NCN sales reps. Real Media may be hiring some of those people.
Morgan says he’s sorry to see NCN self-destruct, but “they accomplished a lot of very positive things. They got the industry as a whole focused on the Internet as a business.” He thinks that NCN should have made the ad network a higher priority, which might have generated enough excitement and cash to keep the owners hooked.
NCN first became a gleam in the newspaper industry’s eye as early as 1994, when talks began among the eventual partners to cooperate in creating a cyberspace umbrella organization for the industry. It operated without a permanent CEO until June 1996, when deBoer, a cable industry executive, took over from interim CEO Peter Winter of Cox Communications, one of NCN’s founding companies. NCN truly got off the ground in July 1997, when its national Web site advertising network launched.
NCN founding companies were Advance Publications, Cox, Gannett Co., Hearst Corp., Knight Ridder, New York Times Co., Times Mirror, Tribune Co. and the Washington Post Co. Each company initially invested $1 million in NCN, and the company received additional capital rounds at a later date — although it is not known if all of the founders continued to pour money into the venture.
CEO deBoer says he has not yet had time to think about his next career move. He says that board members, although not agreeing amongst themselves about core NCN strategy, were supportive of what the organization tried to do. This venture “had a high degree of difficulty attached, but it was worth trying,” deBoer says.
In a recent column about the Washington Post not giving its print staffers free access to its new paid Web newspaper archive service, I mentioned that they could access Post archives using the “RoadRunner” system. In fact, that is the name of the Post’s SII editing system. Archive searches are done on a separate system called “PostHaste,” which in the newsroom uses a Windows interface. To use it at home, according to a Post reporter who asked to remain unidentified, you have to “fire up a terminal emulator, dial into a bulletin board — at a maximum speed of 2400 bps — and conduct searches with a command-line interface of maddening inscrutability and hideous sluggishness.” Thus, some Post staffers are miffed that they can’t use the slick new Web archive service unless they pay.
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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at firstname.lastname@example.org
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