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May 2, 2000
New Rules For New Media
By Anna Maria Virzi

--Call it a classic case of convergence in the Internet era. Powerful Media, a news site covering entertainment and media, received an investment from a New York City consulting firm that runs new media conferences.

Powerful Media's, to be launched by former executives of New York magazine, Brill's Content (would have thought they at least would know better) and Spin, plans to compete with Variety, Billboard and other magazines.

Executives from Jupiter Communications (nasdaq: JPTR), a company with annual revenue of $38.1 million, say they will share content and collaborate on building communities with Powerful Media. This spring, for example, Powerful Media's Kurt Anderson, author of Turn of the Century and co-founder of Spy magazine, was a panelist at Jupiter's Consumer Online Forum in New York.

So what's the big deal? Despite changing rules, many media executives today still cringe at the thought of losing their independence to outside interests such as advertisers, investors or business partners. Just imagine the outcry if The New York Times shared a not-yet-published business story about computers with IBM, a big advertiser.

As business relationships evolve, both new and old media companies are encountering new conflicts. The Industry Standard, a news magazine covering the Internet economy, for example, received $30 million from a group of investors, including Flatiron Partners, an investor in many Silicon Alley companies. Can the magazine's coverage of those Internet companies be influenced in any way?

"How independent can you be? A lot of this is about the appearance of independence," says Sreenath Sreenivasan, professor of new media at Columbia University's Graduate School of Journalism, while discussing Powerful Media's partnership with Jupiter Communications. Executives from Powerful Media were not available to discuss their company's plans.

But Sreenivasan's concern is not new. Media critics watched carefully when General Electric (nyse: GE) acquired NBC, Time Warner (nyse: TWX) bought CNN, and Disney (nyse: DIS) picked up ABC. "To be fair," says Sreenivasan, "some of these publications go out of their way to explain the conflict [and] identify the parental control."

"The Internet makes for strange bedfellows," admits Deanna Brown, CEO of Powerful Media and former president of Brillís Content. She insists that the news staff of 70 reporters and editors will remain independent of any strategic partnerships. "Thatís true of old media and new media." | stuff | quotes: