Bubble wrath. (Letters).

Phillip J. Longman ("Bad Press," October) makes any number of thought-provoking points in his recent broadside at the failings of business journalism. But he is wrong to suggest that Fortune's coverage of AOL Time Warner has been tempered by the fact that we're AOL Time Warner employees. If he'd been willing to look at what we'd actually written, he would have found that shortly after the merger of AOL and Time Warner was announced, Fortune's Carol Loomis wrote a tough-minded--and quite prescient--story questioning the growth assumptions the merger was based on. Long before it became a public issue, Fortune wrote a story raising questions about some of AOL's accounting practices. We were the first to ask whether former CEO Gerald Levin left voluntarily, or was pushed by the board. And so on. We've also, in that time, written stories praising one aspect or another of the company's strategies--when we've felt praise was truly merited. The point is, AOL Time Warner is an important company for our readers to know about, and we work hard at covering it without fear or favor.

JOSEPH NOCERA
Executive Editor, Fortune

While I agree with much of what Longman had to say, I take issue with his snide characterization of the Industry Standard as a place "where reporters once took time off from chronicling the achievements of dot-com heroes to enjoy in-house massages and open-bar parties graced by belly dancers." Sure, the Standard benefitted from the once-frenzied advertising spending in the Internet sector. But to suggest that the quality of the journalism was anything less than fair, balanced, and skeptical would be inaccurate. Our editorial staff prided itself on taking the skeptical view. Even as Wall Street was cheering the sector on in 1998, 1999, and early 2000, we continually warned about the dangers posed by the euphoric optimism public and private investors were displaying about the future of the Internet business. Consider the following excerpt from the magazine: "Now, no one has more faith in the future of the Internet Economy than we do. But investors' voracious appetite for new Net companies is unsettling. How many online drugstores do we need? How many free ISPs? How many business-to-business auctions? While we admire the entrepreneurial spirit of all those startups, it's hard not to suspect that things will end badly."

ERIC J. SAVITZ
former Executive Editor, The Industry
Standard

Longman writes that "Business Week ... in the late 1990s proclaimed an end to the business cycle." As far as I know, Business Week did not write that business cycles were dead, or anything remotely like that. Quite the contrary--we regularly reminded readers that a technology-driven economy was vulnerable to sharp downturns. In a March 1997 cover story, we wrote that "with high tech having grown so big, the economy is now vulnerable to a high-tech slowdown in a way that was never true before." In August 1998, we published a story headlined, "Yes, Virginia, There Will Be Recessions." In February 1999, we wrote that "investment-led expansions that occur when new technologies are emerging will inevitably come to an end--often in ugly ways." And in February 2000, before the stock market peaked, we published a piece which said that "sooner, rather than later, the New Economy boom is likely to be followed by a New Economy bust--a recession and stock market decline that could be much deeper than most people expect."

MICHAEL J. MANDEL
Chief Economist, Business Week

Phillip J. Longman replies: To Joe Nocera, a business journalist I consider among the best in the business, I say don't be so sensitive. I didn't accuse Fortune of going light on its coverage of AOL Time Warner; I suggested it couldn't have been much fun having to endure the built-in conflict of interest involved in covering your own employer. To Michael J. Mandel, whose work I also greatly admire, I say, sure, Business Week published articles in which there were warnings about the end of the boom. You can even take credit for having co-written the March 1997 story you cited, which warned of a high-tech bubble. But I believe the magazine's tone was set by its editor in chief, who by 1998 was gloating in an editorial about how early Business Week had popularized the New Economy theory, and how he was happy to see Alan Greenspan coming around to "our view." The editorial accompanied Mandel's double-issue cover story on the future of the economy entitled: "You Ain't Seen Nothing Yet."