Magazine icon predicts dot-com resurgence

Red Herring co-founder Tony Perkins still has the fever for the Internet and journalism

Tony Perkins has been at the forefront of Silicon Valley’s technology industry for the past 15 years. Through his work at Silicon Valley Bank and as a co-founder of the now-defunct Red Herring magazine, Perkins has consistently ridden the crest of each technology wave that washed across the valley.

His current project is a dot-com startup he funded with $50,000 of his own money. Called AlwaysOn LLC, it is a Web-based hybrid of business reporting and online journals popularly called “blogs” that he predicts will turn traditional media on its ear.

Biz Ink reporter David Speakman recently spoke with Perkins at Buck’s Restaurant in Woodside about AlwaysOn, which he eagerly showed off from his wirelessly Apple PowerBook. Perkins also talked about the health and entrepreneurial spirit of Silicon Valley.

You’ve said before that the success of eBay Inc. inspired you to attempt to apply its model to media on the Internet to create AlwaysOn.

It’s really built upon two trends. One is a Web media trend, the other is a business trend. A couple of observations in the reality of the market really inspired me to get this thing going. From a Web consumer standpoint, the clear winner in the first chapter of the Internet was eBay.

What eBay did was create an arena and invite its customers to come play in that arena. But if you think about it, all the things that go on in the arena that are of value to the customer are produced by the customers themselves.

But how can you apply that model to news media?

I think that is an incredible business strategy. I think that quality is the ultimate unique quality of the Internet. In the first generation of the Internet, all of the media companies really viewed the Web as an additional way to broadcast something. What AlwaysOn is about is creating a two-way relationship. An overwhelming amount of our content is generated by responses from our users. It can be described as the “ebay-ization” of media.

What does that mean?

eBay is the first example of the second-generation media company. Whether it was lucky or however you describe it, eBay created a business model where, again, most of the content they offer customers is customer-generated.

I think all the rules and the ideas concerning media and journalism are going to be incredibly challenged. I don’t even know what media is anymore. When you go to the AlwaysOn site, about 70 percent of our content is created by our members.

Would you call the invention of weblogs, or blogging, a disruptive technology in the media landscape?

Open-source media is probably the best way to describe it. Today most media companies control 100 percent of their content; even the letters to the editor that they edit before they publish. Traditional media is hesitant in participating in audience-generated concepts. They are worried about losing control of their content.

I think the Internet and blogging software is going to blow all the rules of journalism apart and we’ll have to put them all back together and see what happens.

Isn’t that already happening? Your traditional magazine, Red Herring, is out of business.

There is a cycle. Personally, I get great enjoyment out of doing things that are new and cool and this is the most fun I’ve had.

How will interactive journalism and blogging affect traditional media giants?

I think they are going to have to give up editorial control, as radical as it sounds, and allow their viewers and subscribers to participate in it. No offense to our profession as journalists, but I think the established media companies will have to decide whether they want to tap into the collective intelligence of their customer and subscriber bases to become a facilitator and aggregator for the rest of their subscribers’ ideas or whether they are going to continue to take a puritanical view and say “this material must pass through the editorial screen, and we completely edit and control it.”

Dot-com content companies have a bad reputation. How will AlwaysOn succeed?

AlwaysOn is already profitable. We already have many sponsors through advertising. A lot of our content is free to us and the cost of maintaining and operating the site has gone down dramatically. I spent $150 on software licenses and operate the site for $400 a month. And it’s scalable. The fact that I can run a virtual company and have a copy editor in the Netherlands and another copy editor out in Sacramento and we can all just operate wherever we are and can produce this Web site means that I’m not spending on office space or an information technology department.

You’re a native of Silicon Valley and have had a career that has taken you through some steep highs and deep lows. What’s your take on the current state of the region?

I expect this is going to be one of the most interesting times ever. I’m finding today more interesting things than I’ve ever found in my career. I’ve always been fascinated by the entrepreneurial process here. I take pride in exporting entrepreneurial capitalism around the world. I think that innovation means good margins and good margins raise the standard of living. I think that for an entrepreneurial capitalist one plus one can equal three; so everybody can win.

I’m very proud of the fact that people come from all over the world to start companies here. As you know, a third of the companies founded in Silicon Valley are founded by either Chinese or Indian immigrants. I think that’s cool. I think the global Silicon Valley is the American dream.