Thursday, September 3, 2009

Social media, the Associated Press, and row boats

In the early 1800s most news came to America across the Atlantic aboard ships, and arrived weeks old. Old perhaps, but still valuable: news of wars, politics, and commerce commanded a price. Thus an enterprising newsman named Harry Blake, working for the Boston Courier, came up with a clever idea and began haunting the wharfs of Boston to scoop stories, eventually venturing out in a small boat to meet ships before they even berthed. Over time news organizations got competitive and began sending schooners as far as 200 miles out to sea to meet boats and get copies of newspapers and reports from sailors. By the late 1820s David Hale, who had recently taken over the failing New York-based Journal of Commerce, reinvented news gathering:

It will be a primary object to render the Journal a first rate commercial paper, worthy of the city. To this end an extensive correspondence will be maintained, the most ably conducted periodicals will be taken, and no pains nor expense will be spared to procure authentic reviews of the markets, prices current &c. It will be necessary to maintain a boat establishment for the collection of marine news; and this must be done at our individual cost, as the public and our establishment will be benefited by competition...

- Journal of Commerce, September 1, 1828

By setting out to sea Hale was able to gather information about European crop harvests, the prices of goods , the fortunes of nations, and a world of other information that could be traded on for profit. But he didn't stop there. In 1849 he pooled resources with several other newspapers and started running a boat and pony express network to quickly get news to New York from the inbound mail steamers that first docked in Halifax, Nova Scotia. This was the birth of the Associated Press.

Fast forward to 2009. RavenPack is a small New York-based company that “provides dynamically tagged news feeds and analytics that meet the accuracy and low latency requirements of today’s markets.” Translation: RavenPack's software automatically sifts through news to very quickly decide what a story is about, and whether it is positive or negative. “Very quickly” in this context means processing hundreds of stories a few thousandth of a second after their publication. RavenPack sells the system to financial companies who use it to help make trading decisions. The company claims that in 90 percent of cases the information they provide can be used to profitably decide which stocks to buy, sell or hold.

I'd argue there's very little difference between Harry Blake rowing across the Boston harbor and RavenPack racing through terabytes of data: they are both in pursuit of news, and they both understand the value of getting the scoop. From a strict news perspective, all that has changed is the technology, velocity and volume.

And when we think of social media, we should see it for what it is – an improvement over a row boat. Social media is just a new means of delivery.

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