Jaron Lanier, an early Internet pioneer, talks with FT Business about the new digital economies, and why free information is not a good idea.

Mr. Lanier says he was one of the first in advocating digitizing the music industry and he used to argue that free music would enable artists to make money from live shows and merchandising.

He now says that this did not turn out well and that information should not be available for free because it doesn't create the basis for sustainable wealth creation. If people and governments, paid for information as they once used to pay, it would create sustainable businesses.

Foremski's Take: Good luck putting the Genie back into the bottle. Every industry undergoing transformation to a digital business is facing enormous disruption in transitioning to new business models. The music and the news media industries are the most visible examples but there's plenty more.

Digitization also means that businesses can cherry pick the lowest-risk highest margin businesses and give away information as a loss-leader.

Google does it all the time, other companies do it too, giving away content, apps, etc, that other businesses used to sell. 

Take a look at Craigslist, which cherry-picked free-classifieds and didn't have to produce the journalism that helped sell the classifieds ads. Craigslist only charges for job ads and its revenues were estimated to be $126m in 2012 and are expected to increase by  $27m to $153m in 2013.

It is clearing about $103m in profits -- not bad for a private firm employing just 35 people. But to make that money it has decimated the classified ads market. A market that was worth $19.6 billion in 2000 had fallen to $6bn in 2009. The value of all those free Craigslists ads is more than $13 billion a year.   Craigslist has likely destroyed more than $100bn of revenues over its long span. It's responsible for tens of thousands of lost jobs.

But it's not Craigslist's fault, it's simply the power of the Internet, a basket of virtually free, standardized technologies, which manages to devalue every business it touches (except healthcare).

If a product or service can be digitized it can be produced or offered, for nearly free. If a business makes money on something else it can easily support "almost-free" to the detriment of other "non-free" businesses in that market.

Stewart Brand, a Bay Area publisher and techno-optimist, coined the phrase "Information wants to be free" in 1985.

"Information can be free" -- is what he's actually saying. And because it can be offered for free  -- it often is. And software too, the open source movement is a perfect example of that trend.

Mr Lanier is right about the need for developing sustainable businesses and the inability of free information to provide a means of wealth creation, especially when the competitive strategy du jour is the simple bludgeon of scale, who has the biggest computer platform.

But developing sustainable economies won't be done by going backwards in time. We face a future that will be defined by the end of work - it can become a golden age or one of horrific consequences. We have no means of dealing with this type of future, we have nothing that has prepared us for it, we only know how to punish and ridicule those that don't work.

It would seem a better use of their time if futurists such as Mr. Lanier focused on the future, and less on going back to the past.

We need to figure out how we deal with the end of work -- it's the most important problem we face bar none.

We have hugely productive manufacturing and other technologies. It doesn't require all 7 billion of us to produce the things we need for a sustainable, healthy, vibrant society. Yet we will impose austerities and false shortages to create scarcities in a bid to monetize markets.

We have at our disposal immense, irrepressible technologies of mass abundance, yet we constantly seek to muzzle them.

It doesn't add up, it doesn't make sense, and it's because we don't have the language and the concepts to even begin to know how to talk about living in a world that celebrates the end of work, the fruits of thousands of years of progress.

Yet we insist that 7 billion people work, or else they are failures, failed societies, failed countries, failed economies. The Internet is helping to create a lot failed economies, it's what it does best.

We need a new way of understanding the future and coming to terms with it on its terms -- and not those from our past way of thinking.

Predicting the future is easy, figuring out how we live in it is much harder. 

- - -

Please see: The Internet Devalues Everything It Touches, Anything That Can Be Digitized -SVW

Early this week, Hamish McKenzie attended a memorial for Aaron Swartz, the young activist who committed suicide while being prosecuted for downloading millions of academic papers.

He writes:

Berin Szoka, the president of the group TechFreedom, offered some words that were uncomfortable for some. Speaking of the Internet activist's alleged crime of downloading millions of academic articles, Szoka stepped out of the night's orthodoxy of holding Swartz up as a hero.

"I cannot condone what Aaron did," Szoka started, about to launch into an argument about how Internet freedom should not be a partisan issue. He was cut off before he could go any further.

Foremski's Take: The future of Aaron Swartz has nothing to do with Aaron Swartz and has everything to do with agendas of digital libertarians and related activists.

I attended a recent memorial in San Francisco (above) and saw how many speakers spoke passionately for changes in the law, for changes in government policies, for many worthwhile causes, as if Mr. Swartz's death was an intentional sacrifice for a greater good.

I've had my run-ins online with those that claim to know what Aaron Swartz died for, and that seek to enroll him in their agendas.

It's not that I disagree with calls for overhauling laws, or freeing medical research data that was publicly funded. But that these calls for activism were lacking in volume and frequency when he was living.

At the recent memorial in San Francisco, I had an interesting conversation with John Gilmore, co-founder of the Electronic Frontier Foundation, about Mr Swartz's activism and the levels of support he was getting from the EFF, and other organizations and individuals.

I asked if it was his activism that led to his suicide? He said possibly it was "a lack of activism" in general around the issues and his impending trial. He wasn't able to get the attention he really needed for his activism to succeed.

Are the digital libertarians now hoisting his corpse onto their shoulders and wailing and flailing against "the Man" and calling his suicide a sacrifice for their agendas, when they could have done so much more to help him when he was alive?

Was it the lack of activism that pushed him to suicide? 

Where were those people that now loudly claim him for their own, when he needed them to be just as vocal in their support, on the eve of his trial and prosecution? 

I hadn't heard much about his work and the names of those that supported him, until his suicide. And I usually pay attention to these types of things. And the same is true for many others I've spoken with. Several speakers at the SF memorial admitted they had never met him.

Aaron Swartz left no explanation for his suicide. And it would seem that he has ceded control over how the world now views his life and death and the reasons for both. 

But that's not entirely true.

While we do not know his reasons for suicide, we do know that he did not want it to be used to further the causes he is now linked with. Because he could have easily combined the two in a last letter.

People should respect his decision to separate his death from his activism and not appropriate his last tragic act in life to bolster their causes -- no matter how progressive or just.

The lesson in Aaron Swartz's suicide is clear: Let's not wait to speak out on important issues, and let's help our lead activists in their times of greatest need -- when they are still living. 

Please see: Aaron Swartz Memorial in SF - Our First Digital Liberties Martyr? - SVW

When it comes to making industry predictions I always resolve not to make any, but as you can see, I have trouble keeping my new year's resolutions.

Two year's ago I made the same resolution and failed when I wrote: 2010 Prediction: The Media Tsunami Is Coming...

The media is dead, long live the media. We now have more media, in more formats, in more times of the day and night, from more people -- than at any other time in history. And we will get even more in 2010.

When I talk about media, I mean anything and all things that are published: news stories, magazine articles, TV, radio, video, music, advertising, photos, web pages, and of course social media. All of it, all the media that's fit to print and all that isn't. 

The low cost of the tools to make media content is a big driver, more important however, are the media hungry platforms that make it easy to publish anything and distribute it widely. One-click uploading to Youtube, or Facebook, or wherever, it's all very easy to create and publish media. A tsunami of media.

Tsunamis come in waves...

The horror of Japan's tsunami showed that it's not just one big wave but a series of large waves that collectively aggregate a force of unimaginable destruction. Similarly, the media tsunami that we are caught in, has several waves, some have yet to hit the shore.

The social media wave is one that is easy to see and it's still moving fast but there's another wave close behind.

The rise of corporate media...

As traditional media organizations struggle and mostly fail to deal with the massive changes disrupting their industry, corporations are rushing in to fill some of the empty spaces by creating their own media content. 

Every company is a media company -- not because they want to be but because they have to be. They have to be seen in the world or they cease to exist, which is why they are ramping up their output of corporate media. And we are just at the start of this trend.

I've worked with Intel on some of its internally sourced media projects; Cisco Systems with its "The Network" publication; and ambitious ventures such as Nissan Motors' TV news channel, are all examples of how corporations are becoming media companies.

They know the value of high quality media content about themselves and about their industries is essential to their bottom-lines.

Since the traditional sources of high quality media, the newspapers, trade publications, magazines,TV shows, etc, aren't producing enough of it, corporations have to produce it themselves.

This trend could be viewed as stop gap measure that buys time until traditional media businesses figure out their new business models, and start growing again. But it's not. There has been a fundamental shift in the business of all media that can't be turned back.

Unstoppable and inevitable...

The reason the rise in corporate media is unstoppable is because the disruption in the media industry is unstoppable.

When your industry is in the path of a disruptive technology huge numbers of businesses will not survive -- no matter what they do. This is why disruptive technologies are called disruptive and not because it's an edgy term.

Even if a company sees the train wreck well ahead on the track they are on,  it won't save them. I've seen it time and again during my 25 years in Silicon Valley, they will slam into that train wreck. The vast majority won't be able to down size, change tracks, or reform their business model in time. Disruptive technologies disrupt.

Making cars and making news programs...

Nissan Motor Company has built a full sized TV studio and has staffed it with top TV journalists from the BBC and elsewhere. It's producing high quality news shows that cover everything that is news, even if it's about Nissan or its competitors, even if it's the riots in China over the territorial dispute with Japan, where mobs were burning Japanese cars and attacking Japanese restaurants. If it's news it gets covered, no matter what it is, as any top news organization would do.

When I met Simon Sproule, Nissan's head of global marketing late last year, I asked him why not just sponsor a TV news show? Why go through the trouble of a very steep learning curve in figuring how to build, staff, and operate a TV news show?

His answer shocked me but it also confirmed that my seven year old analysis of the global media industry was spot on. He said he didn't trust that traditional media companies would succeed in figuring out the new business models.

It makes sense. Why should Nissan invest several years of its massive advertising spend with TV networks if they won't survive the disruption? Taking away Nissan's money will certainly hasten their decline but spending that money in the same places won't help either.

The risk for Nissan is that if it doesn't take action of some kind today, its investments of money and relationships with traditional media companies over the next few years will have been for nothing, and it'll be at square one trying to figure out what to do next. It's better to start now.

If the media companies manage to survive the disruption, Nissan can use them to sell cars; if not, then it has another way to sell cars, by producing high quality professional media itself.

Corporate media Pulitzers...

If Nissan is thinking that traditional media organizations won't survive then other large corporations must be thinking about this too. Will they follow Nissan's example? This is why I've asked the question: Is Corporate Media The New Funding Model For Serious Journalism? - SVW.

It might seem crazy to think of Nissan, Toyota, and Ford Motors competing for Pulitzer prizes for excellence in reporting but it could happen. Could we trust such media sources? Yes, why not? Nissan is already producing serious journalism, and what's to stop others doing it too? Since corporations are very serious about protecting their brands, they would be highly motivated to produce high quality journalism.

The rise of corporate media is unstoppable and inevitable, and it might just be essential to society. If we can't figure out a funding model for serious journalism we will be in serious trouble, special interest groups will have more power than ever before.

Content inflation....

The problem when there is more of any thing, is that the value of that thing is less. Lots of diamonds are valued less than less diamonds -- which is why De Beers tries to control supplies.

The value of a piece of content is determined by how much money can be earned from it, via selling ads, services, etc.

Producing more content creates opportunities for more revenues. 

In the print world producing more content is constrained by high costs of production and distribution but not in the online world. For each media company, the more media content it can produce, the more revenues it can capture. As revenues fall for each piece of content, more content must be produced to keep pace with revenue targets. More inventory results in less ad revenue earned per content item.

Content inflation is devaluing all content.

It's a race to produce ever more content. For example, reporters at popular online news web sites now have to produce five or more stories per day.

Back in the heyday of print journalism, ten years ago or so, newspaper reporters were expected to produce four or five news stories per week. At some of the large national magazines such as Businessweek, Newsweek, etc, journalists could make high six-figure salaries producing five or six feature articles a year. 

More media also means that we will see more low quality media being published, it's like the dirty black water that a tsunami grinds in its wake.

If you can produce higher quality media you'll be able to rise above the rest. There's a lot more high quality content being produced but so what? It still has to compete against more of all types of media, including more high quality content.

Some are focusing on producing "compelling" content, I see a lot of PR "gurus" espousing the need for compelling content, compelling story telling. It's true, compelling content is a good thing to have and we are seeing a lot more compelling content being produced. But so what? It still has to compete with more of everything.

The value of all media content as a whole: news media, corporate media, compelling or mundane media, photos, videos, social media, will continue to fall in 2013 and well into the rest of this decade. 

What will this mean?

- We can expect higher marketing costs for companies.

- Traditional PR will have less impact.

- Advertising will become even less effective.  

- And governments will have trouble communicating with their people.

These are just some of the things ahead for us. A cacophony of voices becoming ever more shrill and difficult to hear, the good and the bad, filtered and unfiltered, a mass of content, a media tsunami on an unprecedented scale.

The epicenter is here...

Silicon Valley is at the epicenter of this tsunami, it became a Media Valley years ago. Our top companies and startups are essentially media companies -- technology-enabled media companies. 

Google, for example, publishes pages of content with advertising. Facebook, Twitter, and multitudes  of startups are media companies.

Silicon Valley is the source of technologies disrupting the media sector, and the source for tools and services that companies are using to transform themselves into media companies. It's an incredible place to be right now because it's becoming a massive Gutenberg machine that's about to start cranking out new types of media in formats as yet unimagined. It's by far the most interesting place in tech, imho.

---

Check back for more on this topic here at Silicon Valley Watcher - reporting from the intersection of technology and media since 2004. 

The widespread belief is that the media has "reach." Trust me, they don't. Not anymore. It's become almost pathetic.

It hit me the other day when I snagged a profile for a client on a well-known website...

Dear God, I realized, my client has more readers than they do. The website needed us to attract an audience for them. They wanted the subject of the piece to send his readers over to them rather than the other way around.

It seems a bit strange that people in New York, the media capital of the world, have only just discovered "Pageview Journalism."

Popularity has been driving online journalism for sometime, I started writing about it more than 2 1/2 years ago in May 2010, noting that reporters are increasingly rewarded based on the traffic they bring, either through direct cash compensation, or by a boost up the editorial ladder, which is essentially the same thing.

Things were similar in the days of paper: writing scoops, provocative subjects, popular columns, etc. But reporters could get away with also writing stories about less well known subjects, ones that might not gain much attention, but the stories were important in highlighting emerging trends and personalities, because it was the overall number of readers that was counted.

In the move from paper to electron, the number of readers of a single article can be counted, and is counted. This means journalists are encouraged to focus on articles with subjects that will bring larger numbers of readers.

Why should a journalist focus on a small company, or unknown individual when the likely small size of the audience will bring the wrong type of attention from their boss?

The focus on Pageview Journalism is a product of the hard economic realities of the media industry. But its rise represents a capitulation of editorial direction and voice to the fickle whims of pop culture.

The result is what we have today: a bland me-too media landscape which publishes huge numbers of the same stories.

But this is not just about journalists feeling the pressure of popularity. What about PR companies? Why should I take a briefing from your client if I can't get the traffic?

Can PR companies drive traffic to a story that I write?

If they can they are golden. Reporters will take their calls over any others.

- - -

Please see:

MediaWatch: Journalists Won't Report News Unless It Can Drive Page Views - SVW

The Future Of Tech Journalism In A Post-Technology World - SVW

I've been warning people: "Special interest groups will gladly pay for the media they want you to read, but you won't pay for the media you need to read."

Software engineers have a saying: GIGO, garbage in, garbage out.

If you start with garbage data you will get a garbage result. That's the future we are heading towards, a future where our media is corrupted with information that serves the goals of special interest groups.

Take a look at Australia where multi-billionaire mining magnate Gina Rinehart has been trying to acquire Fairfax Media, publisher of top newspapers, in a bid to counter anti-mining forces. We'll see more of that as newspapers and other traditional media continue to weaken.

Without our gatekeepers, able to spot corporate spin and BS, how will we make the right decisions about things such as the economy, environment, education, energy, ecology, elder healthcare...

And that's just the issues that begin with the letter 'e.'

Could corporate media be the answer to the funding problem for serious journalism?

My fellow panelists at the recent Holmes Report Global PR Summit were John Earnhardt, head of corporate communications at Cisco (Cisco is my original inspiration for 'every company is a media company'), Jesse Noyes from Eloqua, and Simon Sproule, head of global marketing at Nissan Motor Co., with Morgan McLintic from Lewis PR as the moderator.

Morgan had chosen the panelists well because Cisco and Nissan provided two contrasting models of corporate media producing great journalism.

Cisco has a large team of journalists producing articles about the tech industry for its online magazine "the network." John Earnhardt said that the reporters have just two rules to follow: "Don't write about competitors, and don't write anything that could harm Cisco."

At Nissan Motors, the company has built a full scale TV studio and produces a news program with veteran journalists from the BBC and elsewhere.

It produces news stories that sometimes feature its competitors, and it doesn't shy away from controversial subjects such as Chinese protestors smashing up Nissan cars and other Japanese cars, in response to the dispute over the nationality of remote islands in the South China Sea.

It's an extremely bold move for corporate media to engage in highly charged, highly controversial subjects. And because of that, Nissan represents the leading edge in the rise of corporate media.

Its news programs are designed to be indistinguishable in content and quality from that of traditional news organizations.

Mr Sproule admits it is hard work," We are building the plane as we are flying it."

I asked Mr Sproule, why does Nissan want to get into the business of serious news journalism? Why not sponsor an existing news show?

His answer was surprising. "I don't have the confidence that traditional news organizations will be able to survive the transition to the new business models. Why should I invest large amounts of money over the next few years in a failing enterprise?"

Taking Nissan marketing money away from traditional media will surely hasten that decline but I can understand his position.

Despite the steep learning curve, Nissan is pleased with the audience it is attracting and it plans to expand into sports coverage next year.

Ultimately, both Nissan and Cisco will be judged on how many cars or network equipment they sell. And here, there is a very important distinction to be made compared with traditional media.

Earlier this year when I asked John Earnhardt how's the traffic to Cisco's "the network" online magazine? He said it was good, but that he would be happy if it made a difference to just one person.

I was incredulous, one person? Yes, he said, if that person controls a $100 million budget and chooses Cisco then that will more than pay for the costs of its corporate media venture.

(Nissan says it measures its news program success in audiences of millions but it acknowledges it ultimately is judged by how many cars it sells.)

This made me realize that the business model for corporate media has a massive advantage over traditional media where success has to be measured in an audience reach of tens of millions.

Media is a loss leader, you need something else to sell. If all you have is media to sell, then you will have losses.

That's why traditional media has large losses, it has nothing else to sell.

We are moving into a world where corporate media is on the rise because of the decline in traditional media businesses.

Corporate media is dabbling in the production of serious journalism with an important advantage: it just needs to reach enough people that will buy its products, and that will more than cover its operating costs.

- How can traditional media businesses compete? How will they finance their operations from digital business models that require massive audiences to be viable?

- Can corporate media can generate serious journalism? Yes, we've seen it can. Corporations have valuable brands to protect, they will be highly motivated to produce high quality media.

- Could corporate media win a Pulitzer prize? Why not? I can easily imagine a world where corporations compete with each other to produce great investigative journalism.

Clearly, it would be preferable if we our serious journalism originated from an independent third party but that's not looking like an option. Traditional media organizations continue to struggle to transition to the digital economy.

Cisco, Nissan, and a few others, like Intel, could very well be the early prototypes for the future of high quality journalism, and provide an extremely valuable service to society.

My fellow panelists were John Earnhardt from Cisco (Cisco is my original inspiration for 'every company is a media company'), Jesse Noyes from Eloqua, and Simon Sproule from Nissan Motor Co.

Morgan McLintic from Lewis PR was excellent as the moderator and we didn't waste time getting deep into discussion.

What made it especially wonderful was that the conversation escaped the podium. The audience waited a respectful ten minutes then dived in without waiting for question time. I love when that happens.

The artificial division of the podium dissolved away and audience and panel plunged into an incredibly engaged discussion about the future of media and who will fund it. It became a society of peers, not podiums, and one of the most spirited debates I've ever encountered at a conference.

It generated some very interesting ideas which I'll share in the next posts.

First things first, we all agreed that the term "Brand Journalism" doesn't need to exist, a simpler term is "Corporate Media."

No one tried to defend the term "Brand Journalism," including, surprisingly, Morgan McLintic, our fearless moderator and the inspiration for the panel subject: Are PR People Ready to Become Brand Journalists?

Jesse Noyes from Eloqua, said it well: "I hate the term brand journalism because it is provocative for no good reason."

I agree. It confuses and distracts. It does nothing to educate people on a very important trend sweeping through the business world: the corporation's role as a mass media publisher.

The rise of corporate media is just in its infancy and there's many more important subjects to discuss, which is exactly what we did.

It was all part of Morgan's cunning plan for a lively debate, and it worked.

Some of the subjects that came up:

- Who will fund journalism? We are entering a world where special interest groups will gladly pay for the media they want you to read, but you won't pay for the media you need to read.

How will we pay for the quality journalism we need? If we have junk media we will make junk decisions about important issues. Garbage in, garbage out.

Could corporate media become the new business model for producing the media we need?

You might be surprised at how such a scenario might actually work and work well. I'll explain in my next posts.

- - -

Please see: Can PR People Become Brand Journalists? What Is It? - SVW

- - -

Thanks to Lewis PR, and Holmes Report for the opportunity to take part in the first Global PR Summit conference. It had a great turnout, even though hurricane Sandy stopped about a quarter of the attendees from reaching Miami.

Jon Iwata from IBM was excellent, and so were several of the other speakers.

[Meet IBM's Jon Iwata: "Most Forward Thinking" Communications Professional... - SVW]

Although there were the usual self-promotional panels and sessions, the conference was balanced by many positive factors.

I'd gladly go again but I would probably skip the SABRE awards dinner. Fifty awards plus videos during dinner is a horrible torture. It would have been unbearable if not for the pleasurable company of every one on the Hill & Knowlton table.

(I heard that we got off lightly, Holmes Report sometimes puts on 150 award dinners!)

Also, it was great to see Sean Garrett, the former head of communications at Twitter, taking part in our panel discussions.

And it was good to catch up with Aarti Shah, former Bay Area Bureau Chief for PR Week, and now at March Communications.

More from the conference later this week.

I know nothing about the subject but no one else does either because it's a made up term that is in the early stages of being defined. Nothing wrong in that, I do it all the time but I try to think of concepts that make sense and this one doesn't make any sense at all.

Flacks that want to be hacks...

"Brand Journalism" is hot in the PR community and I can see why. PR people are hoping that they can re-brand themselves as Brand Journalists and the world will be a better place for it, and they'll feel better too.

"Hi, I'm a brand journalist, what do you do?"

But it makes little sense. Take a look at this potential introduction:

"Hi, I'm a journalist from the Wall Street Journal"

"Hi, I'm a journalist from Hugo Boss."

It sounds ridiculous.

Will the Hugo Boss journalist announce a new line with a fair and balanced perspective, with comments from Zegna, Ralph Lauren, etc?

Or will the result of brand journalism read like a press release or an advertorial?

I have little confidence in PR people becoming 'brand journalists' for the simple fact that PR is not journalism.

There's no such thing as brand journalism, or innovation journalism, or anything-else journalism. Journalism is journalism. When you see it you'll know it.

Back in 2004 when I became the first journalist to leave a major newspaper, the Financial Times to become a full time "journalist blogger" there was a lot of confusion over the difference between blogger and journalist. I've spoken at many conferences and over the years a common question was, "Are bloggers journalists?" and, "Should journalists be licensed to practice their profession?"

My answer has always been that journalism is what journalists do, when you see the result you know it. Some bloggers are journalists but they don't need a license to type. The only definition that matters is this: If someone produces journalism and does it consistently then that person is a journalist.

When you see journalism you know it for what it is. When you see a press release you don't see journalism. PR is not brand journalism we already have a term for it why invent another?

A Pulitzer for Brand Journalism...

If Hugo Boss journalists or Versace hacks, produce an investigative series into child labor in the clothing industry, or something like that, I'll eat a Hugo Boss pocket square. And the Pulitzer committee will give them a prize.

My problem is with the term not with the changes in PR and communications. I prefer words to be used accurately while many in PR tend to use words to promote and market.

I prefer the term corporate media. Corporate media spans the entire spectrum of publishing by a corporation. It can include material that is journalistic in its construct and intent. For example, large companies such as Cisco, IBM, and Intel employ people who used to be senior journalists and veteran broadcasters, to produce corporate media but is that journalism?

If corporations want to produce journalism they have to approach this goal in a different way. I think corporate media could win a Pulitzer prize if done right. And I believe it will happen -- I'd like to help make that happen.

But trying to rebrand PR work as "brand journalism" is not the way forward.

EC=MC - Every Company Is A Media Company

I was the first to talk about how every company is a media company - a concept understood far better today than 7 years ago. I'm glad more people understand this today and it seems that "brand journalism" is born out of that, and a desire to try to figure out what does it mean for a company to be a media company, which is exactly the right thing to do because it moves the conversation to the next stage.

A company that understands the concept that it is a media company, even if it makes diapers or energy drinks, has taken an important step forward. But that's just the start. The next stage is: How do we become a media company?

If you want to do journalism you have to instill and insist on journalistic principles being integrated into the culture of the company. And you have to have media professionals for this equation to work.

However, the conversation about 'every company is a media company' is exclusively being led by PR and marketing people. There are no media professionals involved. Which is why I must commend Morgan McLintic at Lewis PR, for inviting me onto the panel about brand journalism. Lewis PR is among the very few that understand the need to bring media professionals into this important conversation. And to do so as equals.

Many companies tell me they are bringing in journalists into their media ventures. I'm glad that they are doing that, however, if they work for communications and marketing heads, they are employees and will do as they are told. Marketing and PR will not able to resist tampering with the product.

That's one of many things that needs to change in the 'every company is a media company' story and how it moves to the next stage: execution.

I'll report more on this topic following my panel later this afternoon, with my host and moderator Morgan McLintic from Lewis PR, John Earnhardt from Cisco (my original inspiration for 'every company is a media company', Jesse Noyes from Eloqua, and Simon Sproule from Nissan Motor Co. [Nissan is producing a general news program]. Reserve your seats it should be a good one:

GPRS 2012 | Are PR People Ready to Become Brand Journalists?

(Sol Tzvi, founder of Genieo, based in Israel.)

Silicon Valley is running hard to maintain its position as the global innovation engine, against competition with dozens of fast growing innovation centers around the world.

Which is why it's puzzling that Silicon Valley has such a large gender gap in key sectors such as angels, VCs, entrepreneurs, engineers, and in senior executive roles.

Why isn't Silicon Valley using all of its people?

Successful startups are businesses that quickly figure out how to make products and services far more productive, for far less money, they spot arbitrage opportunities in huge industries and markets, they make use of the best resources available to them -- tools, capital, business know-how, skilled staff. So why so few women?

The recent Kleiner Perkins Caufield & Byers sex discrimination suit has focused attention on the shockingly small number of women in the VC community. That's also true for many other sectors in Silicon Valley.

Some of the larger companies such as Intel, Hewlett-Packard, Google, Yahoo!, have had programs for many years that focus on hiring more women. And they are active supporters of organizations such as the Anita Borg Institute, named after one of the top US women computer researchers.

Ms Borg, who died in 2003, was a tireless campaigner for increasing the number of women in tech professions. In her acceptance speech at the 2002 Heinz Foundation Awards, she said:

...women are not full partners in driving the creation of the new technology that will define their lives. This is not good for women and not good for the world.

Adriana Gascoigne and her colleagues at Girls in Tech are also working hard to build up the number of women in Silicon Valley and other innovation centers.

And while the involvement of large companies in supporting the Anita Borg Institute, and other women's organizations is commendable, a long-established culture of male dominance is difficult to change within large, older organizations, even fairly recent corporate cultures such as Google's, are from another time. It's best to get it right at the start, which is why gender inequality within startups is something that deserves close monitoring and comment.

Not just unfair...

The small number of women in important roles in Silicon Valley is not just an issue of fairness and justice. It's also an issue of extremely poor management of resources.

Startups constantly say that they focus on their people first. VCs say they invest in people first, and that the makeup of the founding team is their most important consideration. So why are these teams so lopsided, so mono-gender? Mono-anything is rarely good.

If we agree that diversity in startup teams is important, because businesses need teams that have to figure out how to build and survive within a much larger culture -- a culture that's formed by hundreds of millions of people, as in the case of Internet businesses -- then the lack of women insiders, able to impart their insights, abilities, and their energies, is a serious mistake. Such mono-gender, low diversity startups, are born flawed.

Teams of innovators that show a greater mix of backgrounds, genders, and ethnicities will surely have a far better chance of success than those that don't. If I were a VC I would be paying extra attention to diversity because I want to reduce my risks, I want my investments to be successful

Yet that's not happening. Most of the startups I meet with are all founded by men, and women are rare co-founders.

This shows that Silicon Valley isn't making the best use of its resources, and it is the most valuable resource of all: people.

It's as if our startups are trying to compete with one arm tied behind their back, and their investors are actively supporting this handicap. Why this is the case I don't know and it doesn't matter. The future will be different than the present and the teams that adapt the quickest will be the winners.

The situation has to change, and it will change, simply because it makes no rational or economic sense. Once VCs realize the importance of diversity in improving the chance of startup success, things will change quickly.

Lots of capable female business leaders

I get to meet many impressive women founders, such as Heddi Cundle (below) at myTab.co, the travel services site, which I advise from time to time, but there's not enough of them.

I've met very impressive founders of startups based abroad, such as Sol Tzvi, (top of article ) founder of Genieo; and in the UK, Wendy Tan White, who's startup Moonfruit was recently acquired by Yell Group for $28 million.

Maybe other countries are jumping ahead of us. Maybe it's Silicon Valley that's living in the past instead of inventing the future.

There are scores of women that can help build successful businesses but they aren't getting the chance -- and scores of startups that are the poorer for it.

Silicon Valley should use its global leadership position to show how to build the most diverse, and the most successful entrepreneurial teams. You can be sure that the rest of the world will follow, and quickly.

Social and civil change could propagate across the globe at viral speeds. This is not rhetoric, we've seen the changes in the Middle East and how quickly they can spread, even within highly conservative, traditional cultures.

Gender inequality is something that Silicon Valley can do something about -- and make money, because its startups will become more successful.

If Silicon Valley won't do it, then the rest of the world will move on -- and do it first. First mover is a powerful position to be in.

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The Search For Silicon Valley's Women... - SVW