neighborhood. "It's hard to build a company and maintain a positive outlook when you have crack dealers and cops with guns on your block."
Fortune's Dreyfuss fought to produce a site called Our World News, but gave up in 1997. "We had initial backing from Dow Jones and some operational financing from the Freedom Forum," says Dreyfuss. "But for 18 months we couldn't raise the money." He blames the peculiar business perspective of the Internet. "The fact that we showed how we could make money was a mistake," Dreyfuss says. "In an Internet business you're not supposed to make money. You're supposed to have traffic."
There is no national black newspaper in existence today, and once-powerful papers like the Chicago Defender, the Pittsburgh Courier and Rojas' Amsterdam News have seen their budgets and circulations steadily dwindle. Venerated magazines like Ebony and Essence (dossier) haven't grown for years, and there is no new significant competitor. But some bright spots are beginning to appear. Recently, traditional advertising agencies have become interested in pursuing African-American audiences. At the beginning of June, Paris-based Publicis bought a 49 percent stake in Burrell Communications Group (dossier), the largest U.S. agency in the African-American marketing sector, and Advertising Age reports that other agencies began negotiations for the second- and third-largest agencies. Young & Rubicam (dossier) is reportedly talking with UniWorld Group, the second-largest African-American agency, and True North Communications (TNO) is discussing a stake in Don Coleman Advertising, the third-largest.
In addition, the Forbes magazine group has had success recently with American Legacy, an African-American history magazine. Rodney J. Reynolds, its founder and publisher, was distributing the magazine through black churches before he arrived at a partnership agreement with Tim Forbes in 1994. He published his first quarterly issue with Forbes in February of 1995. "I'd struggled to publish independently for 15 years or so," says Reynolds. "One of the things I had to do to stay in publishing was establish a partnership that had the human and financial resources I needed." The magazine, with a paid circulation of 85,000 readers, has been profitable since 1996, and its advertising pages grew 42 percent between 1997 and 1998. Even success, however, brings its own issues. When appealing to an audience that has for years been shut out of mainstream media, publishers must consider cultural authenticity. "There's a growing fear that down the line when these enterprises begin to take in revenue, the management might change, the outlook would be different, and there will be no black voice," says Lloyd Grant, publisher of the KIP Business Report, a newsmagazine.
Omar Wasow, a partner with CommunityConnect and a founder of New York Online, a community site with a largely African-American audience, says it's a common concern. "In media there's an issue of representation," says Wasow. "The complexity and fullness of my humanity - will a nonblack institution get it?"
Venture capitalists argue that compromise is inevitable. "When people have social issues about money, it worries me," says Steven W. Bengston, director of emerging company services at Coopers & Lybrand. "It's hard to mix capitalism and socialism. You usually end up with lousy businesses." Reynolds found that having a mainstream media partner didn't compromise the cultural authenticity of his product. "It wasn't a concern,"
Reynolds insists, in large part because American Heritage, another Forbes publication, had an editorial mission closely aligned with what Reynolds envisioned for American Legacy. "We went into it truly as partners. Each partner has to have respect for the other's strengths and weaknesses, because at the end of the day we want to have a great product."
Rojas is in negotiations with Digital Melanin to work together in the future, and a few outside projects - like consulting work for Charles Schwab, which contacted him recently - are keeping him open for business. But he needs an investor. "We don't want to point fingers or say 'They're all a bunch
