Stratfor Staggers?

Last Friday, Stratfor closed its high-profile Washington, D.C., bureau, about a month after switching to a paid-subscription model. "These are cost-control measures," said Stratfor founder George Friedman. "We've cut some people who were too expensive and inessential." He estimated that the bureau cost "well into five figures" per month.

President and CEO Don Kuykendall says new consulting contracts required Stratfor to put resources into its analysis group. These pending contracts, he said, include one with "one of the five largest U.S. corporations in the world." There are no plans to alter the Web site operations.

Washington bureau members included bureau chief Bryan Bender (who came from Jane's Intelligence Review), Mike Towle (formerly of Knight Ridder), Ed Ossley (formerly of the Seattle Post-Intelligencer), and Therese Schlacter. Stratfor spokespeople said that some might be offered positions in Austin, but discussions are continuing "on a case by case basis," says Friedman. He added that Jack Sweeney, Latin American expert, has been retained as a Stratfor analyst. Some reorganization in the Austin office is planned, but spokespeople did not give any details.

The cuts came for what Friedman cited as "cultural differences." "While we appreciate the skills of journalism, the heart of Stratfor is its intelligence and analytic skills," Friedman says. By training, journalists aim for brevity that "misleads the public by boiling [certain stories] down to 600 words." At a certain point, "it doesn't boil down." Another issue was the journalists' "world-view," he said: "They like to deal with the story today. We should be looking ahead. By the time The New York Times has it on the front page, we should have been there a year ago." Richard Parker, Stratfor's executive editor and chief operating officer (and formerly a Knight-Ridder reporter), says that "lots of companies hire journalists for those skill sets, and I think there are lessons to be learned from large, successful competitors who have managed to hybridize their workforce." Parker, based in Austin, has been offered a position as strategic planner.

In Washington, D.C., Robert Steele, the president of OSS.net, a Stratfor competitor, had already heard about the closing. He asked me, "Why does it surprise you that a bullshit outfit fails?"