AOL Buyout Buzz Leaves Reporters Relying on Close Sources

When rumors spread last week that several Internet heavyweights were after America Online, newspapers nationwide jumped on the news. Yet after much work, they still found themselves with little more than analyst speculations and company background.

But at least one reporter discovered more than surface information, thanks to strong source building.

The Philadelphia Inquirer's Tony Gnoffo took advantage of a key relationship with a source and, as a result, was able to produce a next-day piece that dug into the talks. Gnoffo explained to readers in a bit more depth why AOL, previously a sinking ship, was suddenly a hot commodity for high-flying companies like Yahoo!, Microsoft, Google and Comcast.

Gnoffo covers telecommunications for The Inquirer and, because Comcast is based in Philadelphia, spends about 80 percent to 90 percent of his time reporting on the company. As a result, he has developed several go-to sources for information on Comcast and induced one to talk after he ran into spokesperson roadblocks when news of AOL's talks with Google and Comcast broke on Oct. 12.

Gnoffo also picked up a more thorough understanding about the talks by speaking off the record with officials and by contacting analysts for their opinions. His editors then agreed to run his story with information from his confidential source.

They agreed because "this source was a very good source," whom he trusted, Gnoffo says.

Gnoffo thinks he was able to get the source to comment because he feverishly covers Comcast.

It's difficult to compete with papers such as The New York Times and The Wall Street Journal on news involving the investment banking community, he says. Developing and utilizing local sources is one way to be competitive.

That remains the challenge for business reporters today. A week later, the public still knows little more about the AOL talks than it did on Oct. 12. Now reporters who don't cover the companies or investment banking community exclusively will have to decide how to best allocate their time to the story.

Gnoffo has a tentative plan.

"I'm not chasing after it every day," he says. "This is going to take a few weeks.

"They're still at the talking point stage. It's not as important to my readers who's in front [to buy AOL]," he adds. "I'm interested in it as far as Comcast is interested in it. If they do make a deal, then my level of interest will be intensified."  

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism