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When it comes to how much credibility I think a publication has, it only takes one colossal lapse in journalistic integrity for me to lose all trust.

In general, I've usually found FastCompany to be a fairly decent publication.

While its articles are often laced with a little bit of kool aid, a sip of kool aid now and again never hurt anyone.

But FastCompany's latest cover story about hyped Silicon Valley startup Ning entitled "Ning's Infinite Ambition" by "investigative journalist" Adam L. Penenberg is little more than a fluff piece in the same mold as Sara Lacy's BusinessWeek article on Digg and Kevin Rose two years ago.

Ning is certainly a viable candidate for such a piece as it's one of Silicon Valley's hottest startups.

One co-founder, Marc Andreessen, helped begin Netscape and is Valley royalty. The other, Gina Bianchini, looks decent in a tank top. The pair recently closed a $60m round of funding at a pre-money valuation of $500m.

So what does Ning do? If you're a kool aid sipper, it is an incredible platform that gives everybody the ability to set up a fully-fledged social network. If you're a veteran of Bubble 1.0, Ning is Web 2.0's answer to eGroups.

Penenberg makes it clear that he's a kool aid sipper right from the start. He opens his article with the following paragraph:

"Here's something you probably don't know about the Internet: Simply by designing your product the right way, you can build a billion-dollar business from scratch. No advertising or marketing budget, no need for a sales force, and venture capitalists will kill for the chance to throw money at you."

He goes on to explain that the secret to building a billion-dollar business from scratch is a "viral expansion loop."

What's that? Penenberg reveals the amazing secret:

"It's a type of engineering alchemy that, done right, almost guarantees a self-replicating, borglike growth: One user becomes two, then four, eight, to a million and beyond. It's not unlike taking a penny and doubling it daily for 30 days. By the end of a week, you'd have 64 cents; within two weeks, $81.92; by day 30, about $5.4 million."

Of course, this engineering alchemy called a "viral expansion loop" is just a sophisticated phrase for "viral growth."

Predictably, Ning is, according to Penenberg, the perfect example of this engineering alchemy. After all, Ning's business model is based on "incorporating virality into the functionality of the product."

It's working wonders. Ning currently hosts 230,000 social networks and predicts that by 2010, "it will host some 4 million social networks, with tens of millions of members, serving up billions of page views daily."

Of course, despite Penenberg's talk of how "profound, powerful, and potentially profitable" companies like Ning are, there is no discussion of how many active social networks and members Ning has, nor is there any discussion of Ning's financials.

Most of the discussion isn't discussion at all - it's hype. Penenberg devotes a significant amount of the article to explaining the wonders of "viral expansion loops" as if nobody had ever heard of the concept of viral growth before.

And he, not surprisingly, can't help but detail the incredible valuations received by startups such as Facebook and Slide - companies that also thrive on "viral expansion loops."

Beyond simply providing hype in written form, Penenberg ventures into territory that I would opine calls into question the credibility of the entire article. When he starts talking about numbers, he seems to think that everything is infinite.

For instance, he projects that Facebook will have 200 million users by the end of the year without apparently taking into consideration that Facebook, like MySpace, will inevitably see slower growth as it acquires more of its potential market.

And he predicts that Ning will be "poised to claim a nice slice" of the $26.2 billion domestic online ad market with its "'billions' of predicted page views."

Of course, the notion that Ning is going to be a hot target for advertisers seems quite tenuous, especially when one considers that ad inventory on social networking services is heavily discounted due to monetization issues.

Ning isn't even considered a top-tier mainstream player and currently relies on nothing more than Google AdSense to serve the targeted ads that Penenberg finds so amazing.

When it comes to providing some balance, Penenberg essentially devotes a whopping two paragraphs to the task.

He quotes NYU professor Nicholas Economides, who reminds readers that "being big doesn't necessarily mean you will make a profit," and finally admits that other popular Web 2.0 services "may have huge paper valuations, but none has a revenue model embedded in its core business."

Unfortunately, Penenberg goes on to destroy whatever credibility he had left by informing readers that Ning is different:

"It displays the kinds of ads Web surfers are accustomed to seeing on blogs, news sites, all over the Internet, especially tailored to their particular social-net niche. Extreme skiers see ads targeted to extreme skiing, and so on. Right now, Google places Ning's ads, but eventually, Bianchini and Andreessen plan to serve their own. And even today, if you want to control the ads on your Ning network, you can pay as you go for the infrastructure -- for a monthly fee of $20. About 3% of group leaders chose this option. Either way, Ning makes out."

And he ends with this note:

"By the time Facebook -- or anyone else -- could do that, Ning may well have ridden its double viral loop to impregnability. Because once it hits critical mass, the road is paved."

"Then no one can stop it."

I'm skeptical about Ning and have previously voiced my opinions on why it isn't that special.

I still see it as little more than a Web 2.0 version of eGroups, which was purchased by Yahoo for more than $400 million in Yahoo stock at the height of Bubble 1.0.

Clearly, I don't expect everyone to be as skeptical as I am but even others have commented on how incredulously unbalanced FastCompany's article is.

Rafat Ali, editor of PaidContent, is someone that I usually find to be a level-headed reporter of news related to online content.

The fact that he called FastCompany's article "the biggest piece of Turducken shaped in the form of a cover story" says a lot.

One PaidContent commenter calls Penenberg's article "PR masquerading as journalism" and another states "Journalism it isn’t."

I've recently discussed ethics in the blogosphere and questioned the journalistic integrity of one prominent blogger. It would therefore be unfair not to criticize FastCompany for experiencing what I feel to be a damning lapse in journalistic integrity.

While I know of no evidence indicating that Adam L. Penenberg has a conflict of interest that would provide motivation to write a fluff piece for Ning, I have no qualms stating that his article is completely one-sided, poorly-researched and excessively laden with meaningless, extravagant statements.

It is therefore, in my opinion, of little value to FastCompany readers and had no business being published in the form it has been.

As Rafat Ali points out, one need only look at some of the words and phrases Penenberg chooses to see the red flags:

"viral expansion loop", "engineering alchemy", "self-replicating, borglike growth", "business accelerant", "automagically", "ever-expanding commercial universe", "grand visionary", "effervescent CEO", "serious money", "stackability", "cyber equivalent of introducing standard railroad gauge during the industrial revolution", "double viral loop", "phantasmagorical growth", "swells like a river fed from an ever-growing number of tributaries", "all but unstoppable", "ridden its double viral loop to impregnability".

Maybe Penenberg was infinitely excited. Maybe concepts like viral growth were new to him and he was infinitely inspired. Maybe he wanted to write an infinitely entertaining article.

Whatever the case, I think FastCompany was infinitely foolish for publishing such a fluffy piece.

While I am not a FastCompany subscriber and can't honestly say that it's a magazine I buy religiously, I have occasionally picked up a copy and have enjoyed reading some of its past articles.

After reading Penenberg's "article," I'll have to think twice about picking a copy up in the future.

Drama 2.0

Published 22 April, 2008 by Drama 2.0

237 more posts from this author

Comments (10)

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Sam B

Lot of gag-inducing buzzwords in there, but the bit that most got my goat wasn't a buzzword, it was "potentially profitable".

I would say that if you're making a loss because e.g. you've paid for an extravagant marketing campaign that you plan to cancel next year, or you're temporarily selling at a price which doesn't cover your overheads to build up a customer base, you're "potentially profitable". You've got your hand on a switch that you can flip when everything's plugged in. If you're burbling along on VC dollars waiting for the sudden flash of insight that will turn user numbers into revenue and finally into profit, you have not got potential profitability, you don't know where the switch is, what you've got is faith. Faith and 50p will buy you a packet of crisps.

over 8 years ago



So why are you still reading TechCrunch?

over 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

amartin: after watching the link below, how could I not continue to read TechCrunch?


over 8 years ago



Thanks for this, unfortunately I don't have sound on my computer so you'll have to tell me what he is saying that we don't already know about PR and how to offer a journalist/blogger an exclusive, a free trip, a free product, in return for favourable coverage.

I agree with what you're saying, but what's new? I don't think people are so naive as to not know the deals that the media enters into to get stories.

I read Rory Cellan Jones' piece about the blogosphere selling out, but he was saying they're just like us, not this is something new. In his article, he proves his point by protecting his friend's identity, giving his first name only, and by not naming the electronics company which paid bloggers to go to Vegas, presumably because he's in the same pocket he says the blogosphere has fallen into. He could prove me wrong by naming the electronics company: I'd like to know. Better would be for the blog to name the company, that would tell you who was the more trustworthy.

Can I ask, are you talking about the commercial part of the blogosphere which in my view is the derivative bit, much of it written in the hope of being bought by the mainstream media? That leaves personal weblogs as the disruptive bit. Search via Google News Blog search, avoiding blogs with 'authority' and you can find personal accounts produced at no cost by people closest to what you want to know and with no conflict of interest on just about anything.

over 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

amartin: it would be naive to claim that the mainstream news media is free of conflicts of interest but I also think the notion that bloggers are simply following in the footsteps of the mainstream news media is incorrect.

A few quick points:

1. As I noted before, the typical reporter is employed to report. It's a full-time job. Bloggers, on the other hand, may be "professionals" but unless they're working for somebody who is paying them a salary, I would argue that they're more easily influenced by money. After all, a technology reporter at the New York Times doesn't need an electronics company to pay his way to CES - his employer pays his way. While an electronics company may advertise with the New York Times, the chances that this will impact that journalist's reporting is miniscule compared to the chances had his trip had been paid for by the electronics company directly.

2. Mainstream news media outlets have editorial structures in place that can prevent and catch blatant conflicts of interest and that serve as a check and balance. While this doesn't mean that these structures are perfect and can't be corrupted, it's worth asking: what type of editorial standards are in place for blogs? For instance, does Michael Arrington (or a professional editor) review every post written by one of his authors before it's published? What oversight is there to ensure that disclosures are made when necessary, that any conflicts of interest are caught or avoided beforehand, that the information reported is accurate, etc.?

3. Most mainstream news outlets have official policies that outline their editorial standards. These address issues such as conflicts of interest. For instance, you can read the BBC's Editorial Guidelines at:


How many blogs have written editorial standards?

4. In general, there are widely-held beliefs on what's acceptable and not acceptable amongst mainstream news outlets. You don't have to wonder if the Washington Post is going to be okay with the possibility of a quid pro quo conflict of interest while the Los Angeles Times isn't; there are well-established ethical standards. Blogs, on the other hand, are a hodgepodge. Some disclose possible conflicts, some don't, there's no agreement on what constitutes a conflict and how it should be disclosed, etc.

For all of these reasons, I can still trust mainstream news more than I trust blogosphere news. That's not to say that it is flawless and doesn't have BS, but when flaws and BS are present, they're a lot more sophisticated and subtle than some of the blatant crap that goes on all the time in the blogosphere.

As a side note, when you state that Rory is "presumably...in the same pocket he says the blogosphere has fallen into" I think you go too far. Where's the evidence? In this case, given the context of the article, I don't see why he needed to disclose his friend's name or the name of the electronics company. It would have added little to the article and if he had some vested interest, he wouldn't have mentioned anything at all.

over 8 years ago



Unfortunately for the BBC, guidelines did very little to prevent a few of its journalists loosing our trust by behaving unethically. Whether it's blogs or mainstream media, you're dealing with people, which is why I trust Google's News search more as a source than any human one. Codes of ethics are big in America, like flag waving, and they make me suspicious. They make me think, why is this person waving a code of ethics, is it because they're not ethical? I almost prefer someone like Michael Arrington who never said he wasn't an investor in what he writes about. You do realise you're writing a blog, you are a blogger like Michael Arrington?

Your argument is that if I meet a blogger and he lives in London, then all bloggers live in London. Isn't the quality of reporting best judged on its individual merits, and not on whether it is written by a blogger or a mainstream journalist? Once you start generalising, it's so easy to be proved wrong. Cellan-Jones kept the name of the electronics company secret for a reason. Saying he didn't need to disclose it is like saying you didn't need to name Capazoo, or Wal-Mart didn't need to be named when it was caught fake reporting. It may be that when Cellan-Jones wrote his article he just hadn't checked the information so didn't include it. But in a discussion about trustworthiness, the most trust worthy would be the person who did check, and who did name it.

over 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

amartin: I've enjoyed our discussion here but it's clear we hold different opinions on some of these matters and this will be my final comment for now.

As I stated:

"Mainstream news media outlets have editorial structures in place that can prevent and catch blatant conflicts of interest and that serve as a check and balance. While this doesn't mean that these structures are perfect and can't be corrupted, it's worth asking: what type of editorial standards are in place for blogs?"

I have not argued that mainstream news outlets like the BBC are infallible but the establishment of official, written standards is an important first step in preventing unethical behavior and taking action if/when it occurs. If you haven't even decided what your official standards are, it's hard to set boundaries and the blogosphere is conflicted over what it is and what standards it should hold itself to, if any.

I think you actually have my argument backwards: if I meet a blogger and he says he lives in London, I can't really be sure that he lives in London. Because there are no widely-held standards in the blogosphere as to what constitutes a conflict of interest, what disclosures are reasonably expected, what type of accuracy and fact-checking is demanded, etc., I have no idea what the "quality" of reporting at each individual blog is. It varies from blog to blog and the standards that one blogger sets for himself may be significantly different from the standards that another sets for himself. As such, I can have no obvious expectations when reading a blog. I can, on the other hand, have reasonable expectations when reading a newspaper or watching a television newscast because I know that most newspapers and television networks have similar editorial structures and policies.

If you want to argue that observing the fact that there are widely-held editorial and ethical standards in the mainstream news media is merely a generalization on my part, I think you're on the wrong side of the argument and we'll have to agree to disagree.


1. How exactly do you trust Google News? It simply aggregates articles from sources like the BBC.

2. With all due respect, I'm a blogger but I'm not like Michael Arrington. First, while I have been able to earn income from blogging, it is not my occupation and I do it primarily for personal enjoyment. Second, I don't have any grandiose ideas about destroying newspapers and television networks and putting "real" journalists out out business. While I do make every effort to check facts, report accurately, etc., I don't consider myself a professional "journalist" per se in that I'm not running around trying to get scoops and break news. The vast majority of my (serious) posts are commentaries and opinion pieces. I think I do a good job providing sources for facts/claims and delineating where these end and my analyses and opinions begin.

over 8 years ago



I agree you're a blogger worth reading, unlike this reporter


over 8 years ago


Goran Kaplovic

Well, Facebook has 250 Million already, so your wrong there.  Otherwise nice article..  Check out http://arg.umentum.com/  I think it has the potential to be the first to consolidate the underrated web forum sector.

over 7 years ago



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over 3 years ago

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