Conflict of interest, Web 2.0-style

Update:

Bambi Francisco has decided to leave her job at Marketwatch and run Vator.tv full-time, which I think is the right move to make, and I wish her well. And Pete Cashmore notes that the whole conflict of interest brouhaha (or is it more of a kerfuffle?) has actually been pretty good marketing for Vator.

Original post:

When is a conflict of interest not a conflict of interest? When it involves a Web startup, apparently. Both the Wall Street Journal and ZDNet have written about Vator.tv, and how one of the key players behind the company — which does interviews with CEOs of various startups — is Bambi Francisco, the wonderfully-named tech writer for Marketwatch.com.

bambi.jpgThere are a couple of obvious problem with this, one of the first being that interviewing CEOs of startups is Bambi’s actual job, and now she is starting a company to do that separate from Marketwatch. But it gets worse: according to both the WSJ and ZDNet, Ms. Francisco owns a stake in Vator.tv, and her main partner and financial backer in the venture is none other than Peter Thiel, a cofounder of PayPal and now a venture capitalist. Bambi’s coverage at Marketwatch has also mentioned both Mr. Thiel and some of the various technology companies that he has invested in or advises.

Could this be any more clear-cut an example of conflict? I don’t see how. And yet, Marketwatch editor David Callaway tells ZDNet that:

“the rigid rules of the past may not always apply to new media. Is there a potential for a conflict in Bambi’s case? Yes. Do I think we can avoid it? Yes.”

Matt Marshall of VentureBeat seems to feel that Ms. Francisco has been wronged in some way by the coverage of this story, and that it is “a non-scandal,” and many may agree with him. I am not one of them. However, he also comes to what I think is the correct conclusion: Bambi has to leave Marketwatch (to avoid what he calls “complications,” and what I would call conflicts). Either that or she has to sever her financial relationship with Vator, or make Marketwatch a partner in the venture.

An internal memo from David Callaway to Marketwatch staff is here, but it doesn’t do much to clarify the situation (at least not to me). Let’s review one thing that Mr. Callaway seems to have missed: A conflict of interest doesn’t exist or not exist because *you* say it does — it’s something that your readers or viewers get to decide on. And in many cases, the appearance of a conflict is just as bad as having an actual conflict. Staci Kramer at PaidContent is right — making this about old vs. new media is a copout.

Robert: Disclose that bag of pretzels too

Well, Scoble has gone and done it again, it seems. He agreed to accept a speaking engagement from none other than PayPerPost, everyone’s favourite blogosphere whipping boy. At first, the deal was that they would pay him for appearing, as well as paying for his flight and accommodations, but John Furrier and PodTech apparently decided that wasn’t such a great idea — poor “optics,” as the political types like to say — and so he turned it down.

Duncan Riley says that Scoble “has balls” for doing the speech, but also that he has become “a paid shill” for the company, and that he has every right to “whore his presence.” I think we’re back to where we were just the other day when the latest PayPerPost brouhaha erupted (which I wrote about here). Everyone is being held up against an impossible standard, just because PayPerPost is seen as the blogosphere’s version of a “sidewalk hooker,” — as Scoble’s friend and co-author Shel Israel says in his disapproving comment.

Robert_Scoble.jpg So Scoble was going to get a fee for speaking at a blogging conference. Big deal. Speakers at conferences get paid all the time, and even if they don’t get an honorarium, they usually get free plane flights and hotel rooms and food. That’s how it works. Is this conference somehow different because PayPerPost is sponsoring it? Like Jason at Webomatica, I think more disclosure is definitely good, but I don’t see why he should be subjected to a public flogging. He’s not speaking at the Aryan Party’s annual meeting, for pete’s sake. Mike says he’s making a mistake.

PayPerPost may not be the model that I would like to see bloggers adopt, but it is one of the alternative for people who don’t get enough traffic to make their blog pay, and it has definitely gotten better since it launched. According to an email I got from CEO Ted Murphy, the company will soon be launching a new feature that would place a disclosure button (with a rollover ad included) at the bottom of any post sponsored by an advertiser, although it will be up to the advertiser to decide whether to use that feature.

Update:

Tony Hung has a long and thoughtful post on the subject of the “impossible standard” bloggers are being held to. And both Duncan Riley at 901am and Jim Kukral of Blogkits (which I use, in the interests of full disclosure) think that Ted Murphy of PayPerPost is a marketing genius.

PayPerPost: a Web 2.0 witch-hunt

I have a lot of respect for Jeff Jarvis. He’s been pushing the social-media thing longer than just about anyone, and he knows a lot about the media business. And I think Jason Calacanis is a smart guy too, although I know he gets on a lot of peoples’ nerves. But I don’t get why the mere mention of PayPerPost.com seems to drive both of them completely off the deep end (Scott Karp gets into it at The Blog Herald too). There’s a moralistic tone to the whole subject that I find odd.

In the latest installment of the saga, Jeff and some other smart people at the AlwaysOn conference slammed the company and its compensation model for bloggers, and then Ted Murphy — CEO of the company — stood up and took issue with some of what Jeff and the panel said. The company requires that bloggers disclose that they are being paid, he pointed out (although Jeff rightly noted that this came only after pressure from the blogosphere).

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Then Jeff makes fun of the fact that Murphy has a TV crew following him, and compares him to the ill-fated Bubble 1.0 company that was the subject of the movie Startup, something that is echoed by Valleywag. And Jason Calacanis says the PayPerPost “scam” and “train wreck” is coming off the rails and that the “most hated company” on the Web is doomed.

I thought PayPerPost was bad too (although I didn’t call it a “cancer” like some people), because it didn’t require bloggers to disclose that they were being compensated. But now it does, even if that disclosure comes in the form of an overall policy, rather than something that is declared on a per-post basis. And there are plenty of other ways for bloggers to be compensated and become conflicted. What makes Ted Murphy into Satan all of a sudden?

Jeff’s post in particular has a real lecturing tone to it that I find irritating. He holds PayPerPost up to public ridicule, accuses them of giving parents the tools to exploit their children (like parents haven’t been doing that for centuries anyway — and check the comment on Jeff’s blog from the mother he mentions in his post), and then makes fun of the CEO for promoting his company.

Is the startup reality show idea stupid? No doubt. But no stupider than lots of other things. For more on this topic, check out WinExtra’s blog and ZDNet’s Larry Dignan’s balanced take, as well as a nicely-written rant from Jeneane Sessum at Allied, and another over at The Last Podcast.

Scoble says he’s biased — does it matter?

It started with Robert Scoble of Podtech complaining that Engadget didn’t link to his Intel video (which I wrote about here, complete with comments from Scoble), but it has turned into a discussion about whether that video was compromised by the fact that Intel is a sponsor of Podtech. As Scoble clarified in the comments on my post — and in the comments on his post — Intel paid for one of the other videos on the site, but not for his. However, Intel is a prominent sponsor.

So is that a conflict of interest, or is it just the old “this is new media, we play by different rules” thing all over again? Is Scoble a reporter, or is he something else? And given the tangled conflicts over the Intel video, how should we look at Scoble when he flies around with John Edwards as part of his pre-election campaign?

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In his discussion with commenters — one of the main benefits of Robert’s blog, as far as I’m concerned — Scoble admits that the site could have disclosed its ties to Intel more prominently, and that he has effectively been “used” by CEOs in the same way Intel used him. Then he admits that he could be perceived by some as being biased in doing the Intel video because he is biased:

Did I say my work is unbiased? I think the whole point of what I’ve been doing here for six years is telling you I +am+ biased.

Would Intel invite me back if I just made it look bad? Probably not. But that’s not what I do. If I think something is really bad I just don’t go.

This is an important thing to remember. What Scoble is saying is that he doesn’t want to be seen as a journalist, in the sense of being unbiased or objective. The bottom line, I think, is that Scoble is someone who is enthusiastic about technology and about technology companies. And there’s nothing wrong with that — provided everyone knows what that means.

In another comment at Scoble’s blog, Matt Kelly of Podtech News says that he was invited to the Auto Show by General Motors, who paid for his flights and his hotels and meals. It’s obvious that he sees nothing wrong with that — which I would argue is part of the problem. Car magazines might do that, but that’s why they aren’t considered “real” journalism.

No, Mike — TechCrunch is not different

As my Toronto blogging friend Tony Hung writes here, Mike Arrington is venting some anger over the shots that he and TechCrunch have been taking over issues of conflict and impartiality, with a long post about how he feels like he is under attack. The first thing I would tell Mike is that he should be glad he’s coming under fire, particularly if it’s coming from the traditional media — it means he is successful enough to be making people worried (Jeneane is afraid he is channeling Dave Winer).

At one point, Mike says that TechCrunch is “a new kind of publication” and that it doesn’t “fit into a neat little box like traditional media, who refrain from financial conflicts of interest with their readers and feel that they are therefore above reproach.” He says that his site is different because it’s “all about insider information and conflicts of interest. The only way I get access to the information I do is because these entrepreneurs and venture capitalists are my friends.”

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I would certainly agree that TechCrunch is different, but not in those ways. Traditional journalism is full of columnists, commentators and beat reporters who are every bit as close to their sources, friendly with them and conflicted by those relationships as Mike. As Mitch Ratcliffe notes at ZDNet, there are lots of other online journalists in the same boat too. Nothing that TechCrunch is going through is different in that sense from dozens of investment newsletters.

As with any type of publication — online or off — the relationship with readers is by far the most important thing, since that is the foundation on which the rest of the business (if it is a business) is built. Most of Mike’s readers know that he hangs around with VCs and startups and the like, and that many of them have likely become friends. Provided he discloses obvious conflicts when they arise, most people are probably going to be perfectly happy with that.

As many people have argued before and likely will after me, journalistic objectivity is pretty much a fiction — or at least an unattainable goal in most cases. What journalists and bloggers should strive for if they want to be taken seriously is fairness, balance and honesty. All else is secondary. As my friend Scott Karp said recently, trust is the only asset we have.