More News Re: The Death of Newspapers

Knight Digital Media has posted piece on how a 1995 court case kept the newspaper industry from competing online.
An excerpt:

Perhaps the (relative) old-timers among us will remember Stratton Oakmont v. Prodigy. That 1995 case pitted a New York securities firm against the Prodigy online service. The plaintiffs argued that an anonymous poster on a Prodigy discussion forum defamed the firm and its president by claiming that they committed fraud during the IPO of another company.

Ultimately, a court held that because Prodigy had hired "board leaders" to monitor the forum, that made Prodigy the "publisher" of the information, and, thus, responsible for it. The court noted a distinction with a previous, similar case involving CompuServe: In that case, CompuServe did not hire anyone to monitor its forum, so it was simply a conduit, not responsible for what people posted. The lesson the newspaper industry took from the case? Forums and comments are okay... only if newspaper staff do not edit, or even read, them.

Stratton Oakmont v. Prodigy lasted just one year as precedent...but risk-averse newsroom and website managers weren't persuaded. They continued to insist that their papers could be held liable for any defamatory statements made by readers on their website if newspaper staffers engaged in or managed those discussions.

To find out how this paranoid lapse in litigious judgment played out, click here.

(All praise be to Journalista! for the link.)