Steep Fees to Use eBay Founder Omidyar's News Site: Not So Absurd

Pierre Omidyar, eBay's founder, unveiled on Apr. 22 his long-awaited online news project in Hawaii, and the blogosphere's reaction was understandably skeptical. The Hawaii-based billionaire's site, Honolulu Civil Beat, has a pay wall with a stiff $20 monthly charge to read articles and participate in the discussions.

That alone goes against the grain, but Omidyar's new model also will rely on paying participants to shape the content and coverage and help the "journalist-hosts" do a better job of tapping into institutional knowledge required for hard-core civic reporting.

On to Something?

The site's ultimate goal is to create a "civic square" for informed discussions and education on key local issues, such as education, government, and health. "In my experience, the best solutions come out of discussions that involve a diversity of points of view, conducted in a respectful and good-faith search for common ground and meaningful compromise," wrote Omidyar in an introduction letter on the site.

While skeptics abound, Omidyar may be on to something interesting.

First, a quick recap. Since retreating four years ago to a life of sun and fun in Honolulu, the eBay founder has been hardly resting on his laurels. The tech luminary has been busy running a California-based foundation and, more recently, founding his hybrid journalism startup focused on civic journalism, initially dubbed Peer News.

Good Timing?

Omidyar and fellow former eBay exec and Hawaii resident Randy Ching hired a handful of journalists to build out a next-generation news site led by former Denver Rocky Mountain News Editor John Temple. (Local lore has it that Omidyar helped code up the site in his favorite scripting language, Python.)

Skeptics say no one will pay such a princely sum (in Internet terms) to participate in a local journalism site, and a lack of participants could doom the online "civic square" to failure.

But Omidyar's new startup could be timing the bottom of the paid-content market perfectly. For starters, the subtle reeducation of Web users that not all content is free is well underway. The Financial Times, The Wall Street Journal, and The New York Times are all on paths to paid content in their online forms. Since these are "must read" publications that drive lots of other news coverage, it's hard to ignore this trend.

Yelp for News

Second, an interesting development: When blog empire Gawker Media made it more difficult to comment on its popular low-brow content sites, the number of comments initially fell -- but then swiftly climbed not only in number but in quality as commenters rose to the newly created competition for attention.

Gawker essentially made it much easier for regular, smart commenters to have their opinions listed among the top results, but harder for unregistered, irregular commenters to be seen. This fueled a competition with only psychic rewards.

It's entirely possible that the Hawaii news site will tap into the same vein as a place where its important to have one's voice heard so as to help set or drive a news agenda. Think of it as a Yelp for news stories combined with civic activism/lobbying -- the paid-advocacy types are going to join up and scream for sure.

News Business Weather Vane

Still, with a backer worth $4.5 billion and a small paid staff, burn rate at Honolulu Civil Beat is hardly a burning issue (although Omidyar has long insisted on profit being a critical part of any journalism venture he backs). And the generic URL (www.civilbeat.com) suggests Omidyar has bigger aspirations for the company should the Honolulu model take flight.

Whether the site flies or flops, however, is a likely weather vane for the future of highly reported content on the Internet and a good indicator of where the news business as a whole is headed in the post-print era.