Ed Johnson

The state of journalism is bad. Of course, Jonah Lehrer and Fareed Zakaria—high-profile writers at The New Yorker and Time, respectively—were recently exposed as frauds and plagiarists, but that’s not the worst of it. Not even close. The phone-tapping scandal that nearly imploded NewsCorp’s news division last year? Nope.

In fact, nothing illustrates the distressing state of affairs more clearly than the reaction to Judge William Alsup’s recent order that Google and Oracle turn over the names of the reporters and bloggers whom the two companies had paid for potentially positive coverage supporting their case in a high-stakes copyright lawsuit.

Wait, what reaction? Oh, you didn’t even hear about this?

Don’t worry, you didn’t somehow miss the stunned denunciations from the media elite. You didn’t miss the outraged editorials by the Poynter Institute and Columbia Journalism Review. Because they didn’t happen. Just as Sherlock Holmes gets his clue from the fact that the dog didn’t bark in “The Hound of the Baskervilles,” the lack of outcry is actually the sound of every insider in journalism tipping his or her hand. Reporters taking bribes from major tech companies in Silicon Valley? Old news!

The corruption is endemic. Take Michael Arrington, founder of TechCrunch.com, which sold to AOL for $25M in 2010; his bold editorial stand last year caused him to be ousted from the site he started. What was that stand? Simply that he was perfectly justified in simultaneously launching a side business called CrunchFund, which would invest venture capital in the very same startups his immensely powerful blog covered. It would be hard to imagine a clearer conflict of interest, but most of his peers eagerly took his side.

Some, like former TechCrunch editor and tech journalist Sarah Lacy, even followed his lead. This year, she founded PandoDaily, a new technology news blog. Investors include Marc Andreessen, Peter Thiel, Tony Hsieh and Chris Dixon. If those names sound familiar, it’s because they are the owners, founders or funders of the biggest companies in tech—outfits like Facebook, Zappos, PayPal, LinkedIn and Foursquare. Mr. Andreesen is also an investor in the news website Business Insider. (Full disclosure: The Observer Media Group is partially owned by Josh Kushner, a principal in the investment firm Thrive Capital, which funds a number of start-ups.)

What happens when the robber barons once again not only pull the strings of the industry, but also control the press that is supposed to cover it and hold them responsible?

At the end of the day, it’s these guys who are the real “customers” of the news outlets: not all of the readers out there, but the marketers, advertisers and investors to whom journalists are trying to a deliver product—that product being you and your attention.

So while the outcry over small ethical lapses like Mr. Lehrer supposedly “plagiarizing himself” or making up a few quotes sucks up all the oxygen, they are in some sense a distraction from the deeper systemic issues. The media focus on these token misdeeds is a way of convincing the public that the truth still matters—an effort to distract from the truly appalling economics of the news itself. It’s not enough that blogs and fledgling newspapers are putting themselves in an unethical position by taking money from the people they cover. In today’s world of page-view journalism—in which writers are compensated by how many times their posts are viewed—every article is in some sense a conflict of interest.

Think of BleacherReport, a consortium of sports blogs, that was just acquired by Turner Broadcasting for $180 million. BleacherReport, like many blog empires, pays its contributors in part based on page-views. (Meanwhile, some unpaid writers are compensated merely with “exposure.”) In other words, an incentive is created to write articles that get a lot of traffic, not articles that are necessarily “good” or, say, “true.” Intelligent readers are known to disdain the more craven methods sites use to drive traffic—particularly the breed of “entertaining slideshows” that Bleacher trumpets in its slogan—but publishers love the money it brings in from pay-per-impression advertisers. And the reason BleacherReport encourages its writers to chase this sort of page-view growth strategy is that its investors demand it.

This is what I mean when I say every article on these sites has a conflict of interest. The goal isn’t to do worthwhile journalism, it is to profit. BleacherReport, like nearly every site from Gawker to Business Insider to, yes, Observer.com, wants to show hockey-stick growth. Then, should they wish to, they can sell for a profit. Just business, of course. But it warps what they write about and how they write it.

But the media is happy to have readers focus on Mr. Leher and Mr. Zakaria, like they're the real problem.

I’ve been around the underworld of PR long enough to know that multibillion-dollar industries love to focus on isolated incidents as misdirection. It’s always about the rogue trader, the “unpreventable” disaster or the overzealous campaign flack.

The ensuing hand-wringing and self-flagellation generally prevents anyone from bothering to probe any deeper. To go back to the dog analogy, they’ll never bark at institutionalized backroom dealing or insidious incentives, because that’s what they’re comfortable with.

Recently, a writer for the Poynter Institute tried to dismiss some of my criticisms of the online-driven media cycle by asking his readers “Are you interested in hearing about the sausage [being made] from the guy who keeps dropping mouse feces into the grinder?”

Well ... I would hope so. Who better to tell you what's what?

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.