Blodget returns to Wall Street
Three years ago, NPR’s Madeleine Brand introduced a segment with Henry Blodget with these words:
Let’s go now to someone who knows a little something about financial bubbles bursting: Henry Blodget. He had a front-row seat during the dot-com boom: he was a tech stock analyst at Merrill Lynch from 1999 to 2001. Well, now Merrill is gone, sold off to Bank of America over the weekend, and Henry Blodget is gone too, banned from Wall Street after being charged with fraud.
Well, if Henry Blodget was gone in 2008, he’s definitely back in 2011. And while he’s still banned from the securities industry, he’s not banned from Wall Street: in fact, he’s positively welcomed there. He rang the opening bell at the NYSE this morning, which, judging by the huge grin on his face, made him feel even better than getting a $7 million check a couple of weeks ago to expand Business Insider.
How did Blodget manage this turnaround? Well, he started a blog, Internet Outsider, which wonderfully still exists, although it hasn’t been updated in almost four years. Kevin Ryan, impressed with the blog, turned it into a fully-fledged business, called Silicon Alley Insider. And the rest, well, is history.
The move from an outsider-branded blog to an insider-branded for-profit site marked the point at which Blodget started to focus intently on creating a website which would be as addictive as possible for readers, and cause them to come back as often as possible, generating as much revenue for himself as he could muster. Giving your media business a name like Inside.com or Business Insider is one way of justifying high ad rates: the idea is to sell advertisers on the idea that your site is being written by and for high-value professionals. These names may or may not mean much to readers, but to advertisers, Business Insider is always going to be a more attractive buy than Internet Outsider.
Similarly, for all that Blodget reacted rather defensively to my post on his over-aggregation, I was mainly trying to be descriptive rather than prescriptive. Putting up a vast amount of content on a daily basis is pretty much a necessary precondition for being a successful website. As is making that content as sensational as possible, with screaming all-caps headlines, striking photographs of pretty girls, or anything else which makes people click. I work in Times Square: I see for myself every day how people flock to an overstimulative environment. And creating such an environment online is the secret not only of TBI’s success, but also that of HuffPo.
For that matter, it’s the secret of CNBC, too: lots of whizzing graphics and manufactured cacophony. Both TBI and CNBC feature a huge quantity of market reports with negative added value: they’re giving a running commentary on a volatile market, making their viewers nervous and giving them an ersatz need to know what’s going on now. And the fact is that traders love this stuff — I defy you to find a trading floor which doesn’t have a TV tuned to CNBC. And truth be told, at any given point in time, some computer on that floor is going to have a TBI tab open too.
TBI is also a breath of fresh air for anybody who wants to cut through the clutter of stodgy reporting and get to the heart of the matter quickly:
“On Wall Street, I’d consistently submit a report that would say, ‘This is going to be roadkill,’ and it would come back rewritten as ‘We see some weakness,’” Blodget says. “Now I can say, ‘It’s going to be roadkill.’ That’s very satisfying.”
TBI stories are short, they’re punchy, they say what they mean, and they have a distinctive, provocative, voice. They’re not always true — but traders don’t care so much about what’s true, they care only about what people are saying and thinking right now. Media stodginess is a luxury of monopolists: the minute that media outlets start to seriously compete with each other, they always become increasingly sensationalistic. And TBI is competing not only with dozens of other news websites, but also with all the other addictive content online, including Zynga and Facebook. Henry doesn’t have the luxury of writing carefully-considered pieces and letting them stand on their own merit. His role has two parts to it, and unless he can make his carnival-barker job work, he’s going to get fired from his business-analyst gig.
Blodget’s VIP status on the floor of the NYSE today shows how far he’s come from the dot-bust days of his disgrace. Wall Street doesn’t much care about that any more — and neither does it object to TBI’s sensationalistic tendencies. Wall Street has always been a place of short memories and short attention spans. And Blodget knows just how to appeal to that audience.