Building an Online News Empire, One City at a Time

Hearst made a lot of headlines this week when it transformed the Seattle Post-Intelligencer from a daily newspaper into a news website that will attempt to cover a major city with a score of professional journalists -- and turn a profit in the bargain.

But the new seattlepi.com won't be nearly such a novelty if and when a new start-up conceived by a team of digital-news veterans gets up and running. The company is (tentatively) called Prism; the people behind it are Merrill Brown, the founding editor in chief of MSNBC.com and current chairman of citizen-journalism initiative NowPublic.com; MarketWatch founder Larry Kramer; Greg Swanson, co-founder of Itz Publishing, which helps publishers maximize online audience and ad revenue; and media consultant Arnon Mishkin. They are in discussions with a range of potential backers now and hope to have funding secured by the end of the year.

The mission of Prism, according to Brown, is "to develop a platform that would make it easy for a potential publisher in a large market to launch a website," one that would, through a mix of original content and aggregation, offer a news product similar in scope of coverage to a daily paper. And do it, of course, with a minimum of labor.

"The innovation here is demonstrating that the answer to the current problem is not to figure out necessarily how to finance big newsrooms and companies with hundreds of people," says Brown, who has consulted for "most of the big brand-name news companies" at one time or another. "We'll prove that 15 smart, web-savvy people going into a large market can create a site of real value and scale."

While Brown says he and his partners would like to own and operate a couple such sites, the larger goal of Prism is to create a franchise model that partners can use to start their own. Who are the potential franchisees? He cites "civic leaders around the country who are concerned about the civic impact of not having a daily newspaper" and former journalists or publishing executives who've been forced out of work by the industry's contraction. "We've been asked to partner in doing this with local daily newspapers, but we're not inclined do do this within a given newspaper's market," he adds.

The proper business model for online news has been a subject of intense, obsessive discussion lately. Some sites, such as voiceofsandiego.org and MinnPost.com, have gone the not-for-profit route, while former employees of the now-defunct Rocky Mountain News are trying to round up 50,000 subscribers for the launch of a for-profit site, the In Denver Times.

Prism's sites will rely entirely on advertising revenues, most of it from local advertisers, and they will be run very much on a for-profit basis, says Brown. "We think not-for-profit is the wrong way to go because it doesn't build a sustainable business model."

As it happened, Brown was in Seattle when I spoke to him, watching, at very close range, the birthing pains of the all-digital Post-Intelligencer. Brown said he wished the site well but had his doubts. "They're trying to recreate the old culture and turn it into something new. Whether that's possible within the legacy and culture of a traditional newspaper is unclear."