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"I always date the beginning of our decline as a firm to a retreat . . . When English first took over," the e-mail began. That would be Kevin English, Clarke's predecessor. Cramer once sang English's praises as "the greybeard every Net company needs," but English left quietly last November. These days, Cramer calls Clarke "the best thing that ever happened" to The Street.
In the e-mail, Cramer blamed English and Dave Kansas, editor in chief of The Street, for hanging on to a print model at a time when they needed "to think like t.v." That meant hiring a daytime and nighttime producer who would "make sure the site was current and uptodate" and would "be an intermediary between ad sales and edit."
But English and Kansas nixed the idea, Cramer wrote, creating "what we have now: a newsroom that is expensive and doesn't produce pageviews." The solution: make the company's new chief operating officer a "producer/director" who could "take back that newsroom." Cramer's candidate: Roone Arledge, the retired head of ABC News.
Take the e-mail with a grain of salt: That's what most folks at The Street did when they read it. Some staffers laughed; others were relieved to hear someone finally talking about The Street's fate without the sugarcoating. But not everyone was amused.
"I made a mistake," Cramer told the Voice last week. He was "mortified" to learn of his boo-boo, he says, and wishes he hadn't spoken of "taking back" the newsroom, because they're doing a "fabulous" job. While Cramer is keen on keeping the site up-to-date, he realizes that "if you send an unvarnished memo you run the risk of hurting people's feelings," and that's "not the best way to build a coalition." He promises to be "more restrained" in the future.
Those are abject words from Jim Cramer, who by day is a hedge fund manager and tireless self-promoter. He founded The Street in 1996 with New Republic publisher Marty Peretz, and is now a Street columnist and board member. The way he usually talks, he makes it sound like he runs The Street and it's a hot stock to buy.
In fact, the company continues to lose money with the subscription model Cramer once staked his name on. Its stock leaped to $71.25 on the day it went public last year, but is now hovering at $5, which is barely more than the 52-week low. Overhead is high, and the company is rumored to be on the block. In response, management announced a plan last January to split into free and paid sites, posting breaking news for free at TheStreet.com while offering commentary from Cramer and others by subscription at RealMoney.com.
Page hits are rising. But it didn't help the company's public image this past spring when Cramer went on The Street's Fox TV show and encouraged viewers to buy stock in The Street. Fox cracked down, saying that even with full disclosure, Cramer should not be promoting stock that he owns or manages. Kansas agreed, and The Street canceled the show.
So what does Kansas think of Cramer's latest jive? He laughs it off, calling his product "high quality" and his page views "strong." "We're very active in updating the markets coverage and corporate coverage between 8 a.m. and 6 p.m.," Kansas says, but admits they could do better. Clarke says the site aims to generate 75 percent of revenue from ads under the new model, and "you need page views to drive that."
Clarke and Kansas both reject the idea of a COO who functions as an "intermediary" between business and edit. Kansas says, "We are going to write without fear or favor about things that we think are important, and if someone wants to change that, it's not something that I would accept."
Cramer denies trying to compromise edit's integrity: "I have never picked up the phone and said, 'Dave, I want you to do a story about this.' " If he had been caught sending an e-mail that said "I own Nokia and I want you to change the Nokia coverage," Cramer says, "then you could send me to the journalism jail!"
Should Kansas be worried about his job? Absolutely not, everyone insists. Kansas: "I feel very confident that the person I work for is happy with the job I'm doing." Clarke: "As long as I'm CEO, Dave is secure." Cramer: "I'm a writer. Kansas is my boss. I hope Kansas doesn't fire me."
Larry Kramer is CEO of CBS MarketWatch.com, a free site that competes with The Street. He says The Street does "good journalism, so they're feeling beat-up because they haven't gotten rewarded on that." But he says there are only two viable models for financial news: Bloomberg data, which professionals will pay anything for, and "real-time news," which everyone else wants for free. Kramer says The Street will have to make a "huge effort" to generate mass-market appeal, and "culturally, I don't know if the staff is suited to that."