Media: How to create a website and get ahead in journalism

The lure of big money has got journalists racing to join the high- risk world of the Internet.
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The Independent Culture
Suddenly, the Internet has become the sexiest place for a media executive to work. Stephen Grabiner, the former boss of ONdigital, is settling into his third week as new- media expert at Apax partners venture capital house. Mark Booth, until recently chief executive of BSkyB, is now busy at eVentures, trying to spend pounds 300m of Rupert Murdoch's money on new Internet businesses.

The switch of the two men from traditional media to the Internet is a recent, high-profile example of a much bigger phenomenon. A wave of clever journalists and broadcasters, wanting to make serious money, are leaving their jobs and starting Internet businesses.

A few weeks ago Tim Jackson, until recently a mere hack with a column on the Financial Times, made the headlines as his Internet start-up, QXL, was valued at a whopping pounds 500m plus. Mr Jackson himself could soon be worth more than pounds 50m.

QXL is a UK version of America's eBay online auction site. Like other UK Internet businesses, it loses money and is not original. But none of that matters in the current frenetic climate - the point was that, as a journalist, Mr Jackson was quick to spot an opportunity and act on it.

Other "old media" journalists are rushing to the Net, and making their mark. Lastminute.com is one of the Net's most trendy sites - and has a former Carlton employee as one of its founders. Martha Lane Fox, 26, left her job in network development to start the website which is the stylish place to go for last-minute airline tickets, gifts, holidays or presents.

A distinguishing feature of Lastminute.com is its individual and witty editorial voice. Lane Fox says: "It is my voice. My character and the character of the people here comes out. It started when I wrote our weekly e-mail, just as if I were writing to friends."

Lastminute.com's individual tone gives the site a quality that every Internet business is seeking - "stickiness", the buzz word for high numbers of repeat visitors. It is stickiness which makes a site valuable, but it is not necessarily easily achieved - hence a high demand for journalists who can provide sharp editing and a distinctive voice for a site. "Net businesses are going to have to recruit a lot of writers - and they will come from traditional media. It's one of the biggest issues," says Vic Morris, a partner at Atlas venture capital house. It's no coincidence, he says, that journalists have set up successful Net ventures.

One such, Nick Denton, has spent most of his journalistic life at the Financial Times, as a foreign correspondent in Budapest and a technology writer in London. Eighteen months ago he caught "the Silicon valley bug" and left to set up his own Internet venture, Moreover.com.

His business provides a news service to other websites, and Denton has already raised well over $1m to develop it. Next month he will leave London to set up a headquarters in California. But, he says, the UK provides an excellent editorial base: "the editorial staff are really good here, and there is a big time-zone advantage over America."

Denton reckons that people with a media background are going to be in great demand. "We are really talking about a media takeover of the world," he says. "The media are taking over retail, taking over banking. Websites need to be written and designed as if they are newspapers."

He also acknowledges that the recognition that the Net might be the most attractive place in journalism has come late. "When I left the FT people were saying: `What are you on, you must be crazy, leaving an established brand name' - but in the past few months there has been 180 degree change," he says.

That change of mood about the Internet may help the recruitment officers at TheStreet.com - the online financial and business newspaper. Floated at more than a billion dollars in the US, it has come to London to set up a European office and needs to sign up around 20 British journalists - fast.

The reason for the sudden dash of Grabiner, Booth and others to the Net is, say City analysts, easily explained. Investment in the UK Internet business is booming. It is high risk, but companies are ready to back four or five Internet start-ups in the hope that one of them will be a massive success. Broadcasting and traditional media talent, they say, is merely following the money.

The frenzy of activity began with the recent announcement of the flotation of Dixon's Internet service provider (ISP), Freeserve, which, with a million and a half subscribers, is valued at pounds 1.5bn. Its accounts have figures that old media businesses, newspapers and television companies, can only dream of - the massive value is backed by a mere pounds 2.7m of revenues and losses of pounds 1m.

The Freeserve flotation has acted as a starting gun. In its wake will come a whole range of new UK-based Internet flotations and investments, mirroring the wild rush of funds that have made Yahoo! and Amazon.co into multi-billion dollar businesses in California - based on value, that is. Profits do not yet exist on the Net!

Journalists and broadcasters have joined the throng of young entrepreneurs who have a business-plan in their back pockets, and are chasing the cash that is on offer. They are not the only ones - graduates of business schools are using their MBAs these days not to join Britain's big companies, but instead to launch their own Internet start-ups.

Graduates want equity rather than high salaries, and big management consultancies are reporting unprecedented difficulties in recruiting new staff. "The Internet is a whole parallel economy," says a City analyst, "which is growing at an astounding rate. US advertising revenues on the Net last year grew at more than 100 per cent, for instance, against 8 per cent for television and 6 for newspapers. Of course there will be a shake out - the bubble will burst. But in the meantime, if you've got an entrepreneurial spirit, it's the place to be."

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