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Hugh Hewitt Book Club

ABC News tech writer Michael Malone on the bleak future of newspapers

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HH: I’m a great fan of those who can take the disciplines with which I’m unfamiliar, and frankly, not particularly skilled, and make them available to you. One of those, perhaps the country’s most prolific and easily accessible high-tech writer is Michael Malone. All of his columns are at ABC You’ve probably seen him on PBS and many different settings. He’s been the host and writer of, oh, approximately 200 different shows. His most recent of many fine books on technology’s just come out. It’s called Bill and Dave. It’s a history of the founders of Hewlett Packard. And Michael, good to have you on the program, welcome.

MM: Good to be here. Thank you.

HH: Now I want to start by asking you if you were aware that Yellowstone could blow at any moment?

MM: Yeah, I’ve been reading that for a while.

HH: And have you visited the park recently? Or does it alarm you in any way?

MM: No and no.

HH: Okay, just checking, because it’s one of those things that jumped up at me this weekend, reading a book not unlike your own, Bill Bryson trying to translate science for us. As a high-tech writer, Mike, what’s the biggest challenge for you? Is it dumbing it down enough?

MM: I think that’s part of it. I think that at the heart of it, that technology tends to be driven by the technology itself, and the stories tend to focus on the technology. And sort of like the inflating Yellowstone, exploding Yellowstone story, there’s always some new incredible science story, or some new technology story that’s going to revolutionize the world. And after a while, you get real tired of reading those things.

HH: I don’t.

MM: What really counts is the application of it.

HH: Okay.

MM: You know, how are you going to use it? I’ve seen so many revolutionary technology products in the last 25 years, and I can count on two hands the ones that actually changed our lives.

HH: Well, the Yellowstone story, you might not buy vacation property near the part entrance.

MM: Well, I live near San Francisco, so what am I doing in California on top of the San Andreas Fault?

HH: This is nothing, I’ve just learned from my immersion in plate tectonics. You know what really…Michael, how old are you?

MM: I’m 53.

HH: Okay, I’m 51. One of the disturbing aspects of Bryson’s book is that pretty much everything they taught us in elementary school about geology, physics and microbiology was wrong.

MM: Yeah, and it’ll be wrong again in another 20 years.

HH: That’s what really upsets me. Tell me about Bill and Dave before we go off wandering on newspapers, because I didn’t…when I set this up, it was because of your column on Lileks and newspapers. But then I was reading your bio, and I’m kind of interested in this, because I like biography, I don’t like technology. Is that what you were doing here? Trying to get non-techies to read about tech by writing about Hewlett and Packard?

MM: Yeah, because technology is…everything is about the human interface, and how we use it. And so just as technology is really about the application of it, business is about character, and it’s about people. And actually, that is a nice segue into what’s going on with Lileks and his newspaper.

HH: Yeah, but I don’t want to go there quite yet, because I want you to tell us in a couple of minutes about Hewlett and Packard, and why I should care.

MM: Okay.

HH: For one thing, they’re Stanford guys.

MM: Well, yeah. But on top of that, these are two guys that managed to create what is now the biggest technology company in the world, as of a couple of months ago.

HH: Is it? I had not idea.

MM: Yeah, it passed IBM at its peak. It is now close to $100 billion dollars in annual revenues, 150,000 employees.

HH: Can I stop you for a second? Is that bigger than Microsoft?

MM: Oh, yes.

HH: It is?

MM: Oh, yeah.

HH: You see, we’re dealing with a world of which I’m only…I’m not familiar at all. How big is Microsoft relative to Hewlett Packard?

MM: In terms of revenues?

HH: Yeah.

MM: Oh, God. A tenth.

HH: Really? So that’s a big honking company.

MM: Yeah, it’s a huge company.

HH: What do they make?

MM: Oh, everything.

HH: Well, adding machines, but beyond that.

MM: Well, they’re the world’s largest PC company, as of about three weeks ago, having passed Dell.

HH: I thought they had a bad run.

MM: They did. HP had some real problems, real structural problems over the last ten years, but this new guy in there, Hurd, seems to be, he did the smart thing. He got in there and he shut his mouth and listened to the employees. And he let the HP culture, which is the thing that Bill and Dave built, begin to reassert itself.

HH: What is that culture?

MM: It’s called the HP way, and it’s several things. One of it is it’s a culture built on trust, all the way from the two partners trusting each other completely, down through the entire organization, where you trust people to make their own decisions, and you put the employees first, and innovation right behind, and you drive your way forward by empowering your people to do the right thing. It’s a powerful culture. It’s unbelievable at its peak.

HH: What have they invented that everyone will say oh, yes, of course?

MM: The scientific calculator.

HH: That’ll do.

MM: The atomic clock.

HH: I’m not sure that makes much of a difference in people’s lives.

MM: Well…

HH: I know we use it everyday, but people driving around say it’s ho-hum.

MM: Well, true, but I mean, when you’re making atomic bombs, you have to time the reaction.

HH: Well, that’s true.

MM: Yeah, and then let’s see, fetal monitoring systems, when you go into the hospital, and you’re lying there in the bed, or your wife’s having a baby, that system that’s hooked up to you is a fetal monitoring, or adult monitoring, patient monitoring system, and that’s HP.

HH: Okay, so they’ve done some good work.

MM: A lot of stuff.

HH: And what’s the most interesting thing about Hewlett and Packard? By the way, did Hewlett go first because he was H and Packard was P?

MM: I think they flipped a coin.

HH: Okay.

MM: Which tells you something about them, too, about their egos. No, what I wrote this book about was those two guys, not necessarily the company. I didn’t want to write one of these classic company biographies. What I wanted to do is look at two men that…we live in an age where businessmen are pretty much in disrepute, and we don’t really have a lot of role models out there for enlightened business practices. And these two guys at their peak, which was probably from the mid-50’s to the mid-70’s, they ran a company that grew as fast as Google, that was as innovative as Apple, and was arguably the most enlightened company about personnel policies of any company in history. I mean, all of the stuff that we think of as being good about work, like flexi-time, and stock options and profit sharing, and all those things, really all derive from Hewlett Packard.

HH: Interesting. So the book is Bill and Dave, it’s available at I’ll link to it a little bit later. Now I want to ask you, before I get to Lileks again, why your Oxford connection?

MM: They invited me to come over to give a speech, to the business school over there, and I gave a big speech on entrepreneurship, and the power of entrepreneurship, and how I thought it was the single most important phenomenon of modern times, and that entrepreneurship needed to be cultivated. It was the source of all the new jobs in the world, the source of almost all the innovation, and yet entrepreneurs had no constituents. Politicians didn’t think about entrepreneurs. So I gave that speech, and they asked me, they said come back next year and bring some of your friends from Silicon Valley. And so for the last five years, I’ve been bringing over an awful lot of Silicon Valley top executives. And as a result, the business school at Oxford’s become kind of a hotbed of entrepreneurship in Europe.

HH: Oh, that’s very neat. And you support the library there?

MM: Oh, yeah, the Bodleian, yeah.

HH: A beautiful, beautiful building.

MM: Oh, it’s spectacular.

HH: And it’s extraordinary.

MM: So I like to think it was my little beachhead against EU socialism.

HH: Well, save it, but I can’t imagine Silicon Valley high-tech entrepreneurs enjoying Oxford all that much, given the rather, well, rustic accommodations they’re in.

MM: You just point to one building, and you say Alice In Wonderland, and you point to the other buildings, and you say Harry Potter.

HH: Okay.

MM: That does it.

HH: They’ll go. Now, let’s turn…after Lileks got the notice that he was going down to local news, you wrote an ABC News column that thought that it was rather indicative of the plight that newspapers find themselves in. Explain for us, Michael.

MM: Well, last week was kind of a red letter week for newspaper management idiocy, you know, we had the first thing, we had the Robert Parsons as CEO of Time-Warner goes down at Las Vegas, and compares Time-Warner to the Sioux Indians, and Google to Custer.

HH: Oh, I missed that.

MM: Yeah, and then he had this incredible quote. I wrote it down, because you can’t quite parse it, and especially logically. “They will lose this war if they go to war.” Okay, now, the number of things wrong with that…

HH: Many.

MM: Yes, well, for one thing, giant Time-Warner as the Sioux Indians, and Google, which is what? Eight years old?

HH: Right.

MM: Is Custer? And then he didn’t seem to notice the Sioux lost that war.

HH: Yes (laughing). That’s so bad on many levels.

MM: So I mean, this makes you think this guy’s running Time-Warner?

HH: Well, actually, it fits together quite nicely with that.

MM: Yeah, it does. And so that gets us to the Minneapolis Star Tribune. Now as I said, there’s a Hewlett Packard, Bill Hewlett and Dave Packard connection in all this, because here were two guys that were arguably as innovative as any CEO’s in history, and yet they had absolutely no attachments to the physical buildings of Hewlett Packard, even they had no nostalgia for the products they had created. If a product stopped being profitable, they got rid of it. They got rid of buildings, they changed locations. The only continuity in their management career, and the reason they ended up on top, and are as famous as they are, is because they put their employees first.

HH: Interesting.

MM: They understood that the strength…in a world that’s constantly changing, in businesses that are endlessly metamorphosing, the only thing that counts are your people, and you’ve got to treat them well, and you’ve got to entrust them to do the right thing. And everything else is disposable. And what I noticed reading this story about Lileks and the Star Tribune was, and I’m an old newspaper man, 30 years writing for newspapers now, it’s that they’re still attached to the printing plant out back, to the trucks that deliver the newspapers, to the linoleum in the newsroom.

HH: Right, and to the fedora.

MM: Yeah, and they’ve been so profligate with talent. Every major newspaper I know of, have ever written for, they all offered golden parachutes to their veteran reporters in order to cut those costs, and by doing that, they lost all of their cultural continuity, they lost the institutional memory…

HH: Michael, can I keep you for one more segment?

MM: Yeah.

– – – –

HH: When we went to break, Michael, we were talking about, and you’re a newspaper guy, and I’ve never been an employee of a newspaper, though I’ve written for them for years, we both love newspapers, but boy, they are dinosaurs.

MM: They really are. And as I was saying before the break, they’re going into this vicious cycle where they’ve gotten rid of, they’ve clung onto the things that don’t matter, the building and the printing presses, and all that, and they’ve gotten rid of the thing that actually makes them competitive in the future, which is their talent, their people, the people that know how to report. They’ve gotten rid of their veteran reporters by giving them golden parachutes, and nobody wants to go work for a newspaper anymore, so they can’t recruit the young people. And as a result, they’re just getting dumber and dumber. And so we’re seeing more and more mistakes like this.

HH: You know, the best example of that I know, other than the Lileks fiasco, which has not yet played itself out, we have to wait and see what happens there, is Kevin Roderick of the Los Angeles Times, left the L.A. Times, took the buyout, and started L.A. Observed, which may be the single best city-specific blog in America. Though Kevin drives me crazy, occasionally, and we throw hammers at each other, I recognize his talent and his ability to weave a great story about Los Angeles. They could have done that on the L.A. Times’ dime, and then owned that traffic.

MM: Oh, absolutely, and that brings us to Lileks. I mean, as I was reading that story, you know, even if I wasn’t a huge fan of his, I realize the only thing I know about Minneapolis is his columns. And he has this enormous talent where…I mean, the hardest thing in the world to do is a column, and then on top of that, a thumb-suck column, and on top of that, a domestic thumb-suck column, and do that year in and year out? There’s only a few people in America that can do something like that.

HH: Can you explain for our audience, the technology savvy who don’t know journalism, what a thumb-suck column is?

MM: Well, there’s several kinds of columns. If you take a column like mine on ABC, I’m basically taking whatever’s in the news, and riffing off of that.

HH: Right.

MM: But to talk about your dog and your daughter, and going out for pizza.

HH: And Target and Chuck E. Cheese, right?

MM: Yeah, and make it interesting…

HH: And funny.

MM: And funny…is an astonishing talent. But just leave that aside. The only thing most people in America know about Minneapolis now is Lileks’ column. So he’s built this incredible multimedia franchise, which most newspapers would kill for, and what does the Star Tribune do? They demote him. And so I very, kind of semi-facetiously, but also with a certain amount of earnestness, said if that newspaper was smart, they would sell off their building and all of their capital plant, send the reporters home or to Starbucks to work, and take all the money they made, and buy editorial space on Lileks’ site.

HH: (laughing)

MM: And it would actually, probably, be a more effective business plan.

HH: Well, I do look at the, and the, the two which have made the transition in the easiest fashion., of course, charging $100 bucks a year to 760,000 plus people, and the making its advertising bones over there, and what they’ve done is they’ve thrown all of their talent onto the web.

MM: Yes.

HH: Is that what every newspaper should be doing, Michael Malone?

MM: They should have done it a long time ago. They didn’t do it because they were afraid they’d lose their advertisers. And what they would not accept was that the advertisers, and the advertising agencies, are still evolving, and they’re very carefully inching their way forward, trying to understand how this web and blogosphere world works. But we’re starting to see the first major companies…look at Glenn Reynolds’ Instapundit, and his podcast. It’s sponsored by Volvo.

HH: Yup.

MM: We’re starting to see the big boys coming in and advertise in cyberspace.

HH: Yup.

MM: And newspapers should have been set up to grab that advertising when it transferred over.

HH: Is it too late?

MM: I think it’s too late for most papers.

HH: That’s interesting. So they really can’t, if they make a considered effort to go out and A) within their own ranks, find those who are savvy enough and understand it, and B) to draft in people who want to do this…for example, Homicide Blog at the Los Angeles Times, I did a panel with the author of that at the LA. Times Festival Of Books, they stumbled on this. She writes up every homicide in Los Angeles County. It’s fascinating, macabre but fascinating. It’s being replicated in major metro areas across the Unites States as they realize this is the kind of vertical deep silo reporting people want. Isn’t that still possible, time to get done?

MM: Oh, I think it is, but keep in mind, this is one of the lessons I’ve learned from covering technology all these years. When you have a technological revolution, only one or two of the old line companies ever manage to cross through to the other side. And the news zeitgeist is dominated by companies you’ve never heard of before. So I mean, if it came down to choosing between Pajamas Media, say, and the L.A. Times thirty years from now? Tough call.

HH: Would you be invested in newspaper companies right now?

MM: Well, they’re quite profitable still, but you know, profitability, being a Silicon Valley guy, I don’t trust profitability.

HH: Why not?

MM: Because industries, they often times become cash cows just before they die.

HH: Is that true? Give me an example of that, Michael Malone.

MM: Oh, almost every industry in tech history at some point, main frame computers, mini computers, they all had real good numbers.

HH: And then all of a sudden, boom?

MM: And then boom, they’re gone.

HH: Now that would require advertising…well, two things, subscribers to finally give up, that they’re not getting any value, and some people are just habit buyers, and they haven’t learned the new computer, typically, the demographic you least want, the sixty-plus demographic.

MM: Yeah.

HH: But then, advertisers really have to throw in. Do you think they’re going to?

MM: Advertisers have already begun to throw in. By the end of this decade, you’ll see a major migration by advertisers over to cyberspace. And as for people…you know, the counterargument I always get, I got this from The Guardian in the UK last November when I was at Oxford, they said well, but people always want to be able to open that morning paper, and smoke a cigarette and drink coffee. And I said yeah, you’ll always have those readers. The only competition you’re going to lose those people to is the graveyard.

HH: Yup.

MM: There’s nobody…go around and look at any 21 year old you know, and ask them if they read the newspaper.

HH: Did you take a paper in college?

MM: Yeah, actually, I did.

HH: So did I. I took the Globe.

MM: Yeah.

HH: And then in law school, I took the Detroit Free Press, which was an astonishingly bad paper, but I had to have a paper. I don’t touch a paper anymore, Michael. Do you?

MM: Well, and that’s what really set me off on this. A couple of years ago, I got into a lot of trouble, because I was maybe the first guy to actually come out and say newspapers are all going to die. And luckily, Rupert Murdoch came along two weeks later, and took all the flak from me with his speech. But what set me off was I realized I hadn’t read a newspaper in six months. So I called a buddy of mine who used to be a compatriot in the newsroom at the San Jose Mercury News, and he’s got two Pulitzer Prizes, and I said do you read the paper anymore? And he said no, I just go on the web.

HH: Yup.

MM: And I thought if two people, and I’m like a fourth generation person connected with newspapers, if we don’t read newspapers, why would anybody read newspapers?

HH: Exactly, and it’s the sound of doom approaching, and I think you’re absolutely right. I hope they throw their resources in. I’d like them to stay there. Then again, is doing very nicely, thank you. Michael Malone, a great pleasure to make your acquaintance. I look forward to many more on tech frontiers. And you’re really not concerned about Yellowstone?

MM: Not yet.

HH: I’m going to post on Yellowstone shortly. I urge you to go to I think you’re underestimating the importance of this story, and people are still in the park at this hour, in spite of my broadcast. Michael Malone, thank you. Bill and Dave is the book.

End of interview.


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