EBay founder Pierre Omidyar launches online, subscription-based news service in Hawaii

EBay founder launches online Hawaii news service

HONOLULU — The entrepreneur who created a virtual marketplace that connects sellers and buyers worldwide is launching an online news site where people will pay to exchange ideas and discuss issues affecting their communities.

Pierre Omidyar, the founder and chairman of eBay Inc., is entering the news business with a new online service in Hawaii. By charging a $19.99-a-month membership, Omidyar hopes to accomplish what newspapers and other media organizations nationwide have long struggled with — having readers pay for content and making local news profitable.

“It’s really critical to help find a new way to do journalism that connects with ordinary citizens in a better way,” Omidyar said in an interview Tuesday. “I think that is what’s been lacking. Because the industry has been preoccupied with its own decline, it hasn’t had the opportunity to reinvent itself.

“As a new startup, we have the opportunity to reinvent that and bring journalism back into the center of conversation.”

Civilbeat.com went live Wednesday with the official launch scheduled for May 4. It promises to provide in-depth reporting and analysis, and be a civic plaza for island residents. “Reporter-hosts” will post articles, interact with readers, provide frequent updates and host discussions.

“Journalism plays a central role in the way democracy works, especially in this country. And our democracy doesn’t work when journalism doesn’t work,” Omidyar said. “As I saw the decline in the industry, I really became concerned especially with our local communities not just here in Hawaii, but nationwide.”

Omidyar decided more than two years ago to launch a news service to cover local civic affairs, including the state, city, education, land and money.

“It’s very important for me that we demonstrate that we can do this sustainably,” he said.

The site will feature a “topic page” for each issue. On the page, readers can find links to stories, history and background information.

The other unique aspect will be the discussion section. Unlike traditional newspaper online comment sections that are often marred by hateful, obscene, racist or mindless commentary posted by anonymous readers, Civil Beat members will be identified and no anonymous comments will be allowed.

“We’ll have a billing relationship with them and so we know who they are,” Omidyar said.

Gerald Kato, chair at the University of Hawaii School of Communications, said newspaper subscribers are coveted because they are considered to be older, wealthier and better educated. But many have been turned off by what Kato describes as “crazies,” who participate in unmoderated comment sections.

“They’re trying to flip that around. They want all these high-end people that would gravitate toward a newspaper, but want to filter out all the crazies,” Kato said. “The filtering mechanism would be, you pay to play.”

Omidyar said he’s hoping to encourage a “higher level of conversation.”

“I think the quality of conversation is going to be something which really creates a sense of value for people,” he said, especially for people who are concerned about issues in their community and want meaningful discussions and debate.

The unassuming Honolulu billionaire who wears blue jeans and flip-flops to work is bankrolling the operation, but declined to say how much he’s invested so far. He’s rented out a spacious, 4,000-square-foot office located a few miles east of downtown Honolulu and hired about a dozen people.

The editor is veteran newspaperman John Temple, who served as editor, president and publisher of the Rocky Mountain News, which ceased publications in February 2009.

Omidyar points out that unlike a newspaper, he has no printing presses, trucks, sales staff or other “legacy” obligations. He said having a membership payment provides instant feedback from the readers. He called traditional news organizations “advertising based,” with publishers answering to advertisers instead of the community.

“I think having a more direct business model will help us and I think it’s going to be part of the future for the industry as well,” he said.

Omidyar said he’s focused on Hawaii, where he lives, and not really looking to expand to other areas.

“In my wildest dreams, if we are very successful here, would we consider expanding to other regions? Sure. But are we spending any time thinking of that today? No. We’re not,” he said. “It’s 100 percent Hawaii and we’ve got to make it work here.”

Kato said Omidyar will need to produce a high-quality product to motivate people to pay the monthly fee.

“It’s not a matter of if you build it, they will come. You got to have some reason to come,” he said.

While having people ante $20 a month will be challenging, Kato isn’t willing to bet against Omidyar.

“Who would’ve thought eBay would work? It’s been wildly successful,” Kato said. “Finding people who would pay $20 a month to participate in an online forum, especially in this economy, I don’t know. I wish him luck.”

On the Net:

www.civilbeat.com/