New ethics for the new economy?

Technology journalists aren't supposed to own stock in the companies they cover. But to participate in the high-flying tech sector, some are writing a new definition of "conflict of interest."

By Janelle Brown

Aug 6, 1999 | Full disclosure: Two weeks ago, I watched MP3.com go public and it pained me. It was one of the hottest IPOs of the year, from a company I'd been following for more than a year, and I couldn't buy even one share of the stock. Why? Because I abide by that holy grail of journalism, the church-and-state law of my profession: Avoid conflict of interest. Personally, I don't believe that ownership of MP3.com stock would prevent me from writing scathing reports about the company or affect my reporting on other technology companies, but that argument just doesn't float in journalism. Just look at what happened to Chris Nolan.

The former Silicon Valley gossip queen for the San Jose Mercury News has been sent into exile, stripped of her popular "Talk is Cheap" column and moved to the newspaper's outlying Peninsula Bureau. Her cardinal sin: accepting discounted friends-and-family stock from the CEO of AutoWeb and selling it for a tidy profit of $9,000. The CEO is an old friend of hers, she says, and she had never mentioned AutoWeb in her column; still, she is paying dearly for that $9,000. Her editors, who failed to advise her against accepting the stock when she asked for their guidance, have also been reprimanded.

Nolan's predicament has the technology journalism industry abuzz -- and not just about whether it was right or wrong for her to accept the stock. Like Nolan, many people in technology journalism have poked a finger into the entrepreneurial pie -- some own technology stocks or Internet-oriented mutual funds; others have moonlighted for tech companies, as consultants or writers of technical "white papers"; a few sit on the boards of tech companies, or of their own start-ups.

Journalism, after all, is not where the big money is, and many technology writers would like to afford a life not too different from the lives of the entrepreneurs and technologists they write about. Some have begun to ask themselves if journalists must be barred from the profits the rest of society is making by investing in tech stocks. What if, they ask, the stocks are only tangentially related to their reporter's turf of Silicon Valley? As tech journalists dabble in entrepreneurship and investing, some are reinterpreting the traditional rules governing conflict of interest. What was once a matter of black-and-white ethics has lately turned a murky shade of gray.

Next Page: If journalistic ethics are so important, why are they so poorly defined?

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