Ethan Hill
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Henry Blodget is a man who will be neither easily riled nor insulted. When, in March, he learned that a blog had labeled a section of The Business Insider, the gossipy financial website he founded three years ago, "The Hooters of the Internet," Blodget waited a couple hours before tweeting: "The Hooters of the Internet. I like that." In May, Blodget predicted on his website that within just a few years, The Huffington Post will take in over $100 million in advertising revenue—more than triple the $30 million the site says it will bring in in 2010—and that by 2015 or so, it would be generating more from advertising than The New York Times. In an endnote, he disclosed that Kenneth Lerer, a co-founder of The Huffington Post, is also an investor in The Business Insider, or TBI as it is known by its readers. "Thank you for the disclosure," someone called The Truth typed in the piece's comments section. "Unfortunately, it invalidates everything you write. You're a mouthpiece." It took Blodget less than a minute to post his response: "Thank you!," he wrote, like a fraternity pledge embracing his hazing.
When you have been vilified as publicly and intensely and for as long as Henry Blodget, you will by necessity grow the skin of a pachyderm. For the past eight years, Blodget has lived his life as a fast-typing symbol of Wall Street malfeasance: In 2002, then-New York Attorney General Eliot Spitzer accused Blodget, who was Merrill Lynch's star Internet analyst at the time, of publishing buy and sell ratings on stocks based on how much investment banking business Merrill had gotten, or hoped to get, from any given company, as opposed to the companies' underlying value. Since then, Blodget's life has been filled with ironies. The technological revolution that he championed—the Internet—triggered his downfall after Spitzer released a damning series of internal e-mails Blodget had written. He helped create one of the most spendthrift industries in history, despite his being a known penny-pincher. And not long after Blodget sought his redemption by becoming a member of the media, his old nemesis, Spitzer, tried a similar trick with plans to host a new show on CNN. Now Blodget finds himself the proprietor of a website that often makes the editorial practices of other gossip outlets look fusty and conservative by comparison.
He is betting that he knows what the future of business news looks like. If he fails, many will celebrate. But if he succeeds, it's inevitable that critics will charge—as some have already—that Henry Blodget is once again asking for trouble.
In 2008, less than a year after Blodget launched The Business Insider, Spitzer resigned over a prostitution scandal, which people imagined would be a cause for celebration for Blodget. He says he took no joy in his old adversary's fall. "I was absolutely shocked," he says. "I really thought he was on course to being President of the United States. And I was sort of feeling, O.K., I'm a step along the way up there for him. Right after it happened, I got a bunch of e-mails from friends saying, 'Wow, what goes around comes around. Amazing!' And then I got one saying, 'Well, don't think this lets you off the hook, you scumbag. He was just boning whores! That's nothing compared to what you did.' "
Blodget—being a man who puts far more value on new opportunity than old-world concepts like vendetta—tapped out an e-mail the following year to Spitzer inviting him to talk about the financial crisis on his Yahoo (YHOO) Tech Ticker online financial talk show. "Our guest today is the former Governor of New York and the man who destroyed my Wall Street career," Blodget said on the show, smiling as Spitzer chuckled. His friendly overture impressed Spitzer, who now gushes about Blodget like an old drinking buddy. "Listen, I think Henry's great," Spitzer tells me. "And the issues that led to the analyst case are not of such moral dimensions that these were people who were, you know, out killing babies."
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