IP: Strained relations Business magazines struggle to maintain objectivity under pressure from their biggest tech advertisers

[David Farber <dave () farber net>]

www.sfgate.com
Strained relations
Business magazines struggle to maintain objectivity under pressure from 
their biggest tech advertisers
Dan Fost
Wednesday, January 16, 2002
©2002 San Francisco Chronicle
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/01/16/BU208934.DTL

When big tech companies feel the bite of recession, so do the big business 
magazines that depend on their ads.
And when big magazines publish tough stories about the tech companies' 
business, the companies often bite back.
Silicon Valley heavy hitters PeopleSoft and Sun Microsystems sank their 
teeth into Forbes and Fortune, respectively, in some cases threatening to 
pull their ads in protest of hard-hitting coverage, according to reliable 
sources.
"That's par for the course, not just in technology but in other fields as 
well," said Steven Cohn, editor in chief of Media Industry Newsletter, or 
MIN, which tracks the magazine trade. "It's felt much more in a tight 
economy than it is in better times."
And the economy is tight: According to MIN's count, Forbes ad pages were 
down 38.5 percent last year, while Fortune's were off 35.9 percent.
Neither Forbes, Fortune, PeopleSoft nor Sun would confirm that any ads were 
pulled. But sources say Sun, after several years of largely positive 
coverage in Fortune, was angry about a story -- touted on the Jan. 7 cover 
-- headlined "Sun on the Ropes." The story, by Fred Vogelstein, said Sun, 
coming off the worst year in its history, can't find a quick fix and will 
have to reinvent itself.
A source at Fortune said there were "ramifications" for the running the Sun 
story, indicating that Sun intented to pull future ads.
"There have been some changes which are quarterly that occur in our 
advertising department," said Sun spokeswoman Diane Carlini, but " I'm not 
aware of any protest coming from the company."
Similarly, PeopleSoft, the Pleasanton software giant, was treated to a 
favorable story in the Jan. 21 Forbes, in which writer Carleen Hawn praised 
Chief Executive Officer Craig Conway for his revival of the company. But 
the company was said to be irked at a sidebar by Elizabeth MacDonald, 
titled "PeopleShell?," that suggested the company "has a naughty little 
secret: a way of hiding R&D costs" to inflate profits.
A source at the magazine said PeopleSoft also is threatening to pull its 
ads because of the story.
PeopleSoft said it does not comment on its advertising strategy.
In case you didn't think the advertiser/publisher relationship was a timely 
issue, the Forbes and Fortune flaps follow close behind the recent furor 
over Time magazine's cover story on Apple Computer. Time gave cover 
treatment to a review of Apple's new iMac last week. And Apple, a major 
advertiser, gave Time exclusive access to the much-anticipated computer. 
Critics lambasted the arrangement.
At the same time, Forbes was taking criticism for a cover story of its own, 
on the software firm Siebel Systems. Rumor had it that Siebel had demanded 
a cover story, using its advertiser status as clout. Forbes denies any 
cracks in the church-state wall between advertising and editorial. A Siebel 
representative did not return calls on the matter.
Siebel Systems can't have too many complaints with its treatment in Forbes. 
Not only does the cover story, also by writer Hawn, give company founder 
and CEO Tom Siebel credit for seeing the looming recession, but it also 
makes him out to be the Nostradamus of the tech turnaround. The article 
closes: "Siebel knows: High tech is on a comeback. Remember you heard it 
here first."
Siebel has an ad in that issue of Forbes, and its placement is fortuitous, 
to say the least: Right next to the table of contents, where Tom Siebel 
himself is boasting, "We turned this Titanic around."
"It's a big, huge 'Oops,' " said Forbes spokeswoman Monie Begley. The issue 
was closing around the holidays, she said, and the person responsible for 
looking at the pages before they go to the printer missed the conflict. 
"It's not anything other than a human production error," Begley said.
Forbes Managing Editor Dennis Kneale was upset, but understanding. "I saw 
it and I just thought, 'Whoops,' " Kneale said.
Kneale wasn't as sanguine about the rumor that Forbes put Siebel on the 
cover because the company demanded it.
"That's silly," Kneale said, though he acknowledged that the rumor was 
making the rounds. "That's entirely untrue. If he'd have done that, that 
would have ensured that he'd never make it onto the cover."
Cohn, at the Media Industry Newsletter, noted that demands for magazine 
covers are more typical of movie stars seeking prominent play in People. 
"This is unusual in technology," he said.
But as CEOs become celebrities in their own right, cover demands are not 
unheard of.
"Magazines are a business," said Matthew T. Felling, media director of the 
Center for Media and Public Affairs, a nonprofit research organization. 
"The same profit-driven instinct that leads to favorable coverage of your 
advertisers is the one that decides upon the sexy stories that will make 
people buy your magazine.
"It's not as explicit as with some of the smaller industry trades, where 
their 'Products of the Year' list is identical to a list of their largest 
advertisers, but profit margins are shrinking and taking consciences with 
them. "
The deal for Time's Apple cover -- touting the new iMac as "Flat-out Cool!" 
-- was exposed when Time Canada put the cover on its Web site on Sunday 
night, and then had to pull it down to honor Apple's embargo. Many other 
tech pundits questioned the generally upbeat tone of writer Josh Quittner's 
story.
Quittner admits he was enthusiastic but contends he maintained adequate 
skepticism.
"I wouldn't change a word of it," Quittner said yesterday. "It was a hell 
of a lot of fun. . . . It reminded me of why I started to write about 
technology in the first place."
Quittner had nothing to do with arranging the exclusive. The story was 
assigned to him after Time closed the magazine he had been editing, On 
Technology.
"It was rejuvenating," Quittner said. "Maybe some of that tone -- my own 
personal excitement -- seeped into the piece. But it was honest. It wasn't 
because I thought Apple was a big advertiser. Why would I care? If you 
think this is the situation, figure out how much money Time gets from 
Microsoft or IBM as advertisers. Do you think Apple pays more than those 
guys? It's a canard."
Quittner said he's a victim of an attitude that runs deep among reporters: 
cynicism. "I could have said, 'This is crap. This is more of Steve Jobs 
pulling strings,' " he said. "That isn't what I felt. Nobody gives you a 
hard time when you pan something. When you endorse something, everybody 
jumps down your throat."
PRODUCT PLACEMENT: One of the covers that Forbes would rather forget 
featured Yahoo Chief Executive Tim Koogle on Dec. 11, 2000, touting Yahoo's 
"Killer Ad Machine" -- less than three months before Koogle himself had to 
step down from the Internet giant.
Yet the cover resurfaced in a strange place. In the movie "Shallow Hal," 
Jason Alexander announces he's off to the men's room, and he reaches for a 
magazine.
"The good news is, he grabs Forbes, not Fortune," said Forbes Managing 
Editor Dennis Kneale. "The bad news is, it's the Yahoo cover."
SEXCETERA: In writing last month about the San Francisco Bay Guardian 
dumping sex columnist Isadora Alman, I should have noted that the Guardian 
does have another sex columnist, Andrea Nemerson.
Nemerson joined the paper's Web site five years ago to write a younger, 
funnier sex advice column, and she moved into print two years ago.
Unlike Alman, she doesn't have professional degrees or national 
distribution. "For years, I've had to say, I'm the Bay Guardian sex 
columnist - - no, the other one," she said.
Now her column has moved up to take Alman's slot.
©2002 San Francisco Chronicle Page B - 1

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