“There was no one who stood up and said if we invest in eBay life will be grand,” she says. “We looked at a million things. And no one could say this is going to be the one. And we just couldn’t spread ourselves. Could we have won at the roulette table that night? Maybe. But we didn’t. You don’t go back and say, if only. . . .”

The decision, she went on, reflected a broader sense of how the company regarded itself. “We had the impediment of who we were. We had our kind of talent and our kind of investors,” she said. “We weren’t hiring the best engineers. We were hiring people who could do great work in journalism and great sales people. You can’t change who you are.”

5. Babel

Kathy Yates, whose early discomfort with Bob Ingle had evolved into friendship, joined him at Knight Ridder’s digital division, and it was there, in 1997, that she first heard of a new book by a Harvard Business School professor that presented a sober and troubling assessment of the fate that awaited companies under assault from what he called “disruptive technology.”

In The Innovator’s Dilemma, Clayton Christensen wrote of two technological forces, the more gentle of which “sustained” well-run companies. Ingle, in fact, had witnessed the power of “sustaining technology” as a young man at The Miami Herald, where the conversion from hot to cold type made producing a newspaper quicker and cheaper. The Herald, like newspapers across the country, absorbed that innovation in a way that streamlined the operation of a well-run company in a chain of successful newspapers.

But “disruptive technology” possessed an altogether different power, one that could unmoor the best-run companies. Disruptive technology was difficult to confront because it functioned in a profoundly counterintuitive way. Unlike cold type, for instance, it did not enhance a product whose market—advertisers and readers—was established, familiar, and reliably profitable. Instead, it created new products that initially held little appeal to that existing market, either because the market was already happy with what it had, or because it was not ready for that innovation. In the 1980s, those newspaper companies that had experimented with electronic publishing discovered that their audiences still regarded the printed paper as the most efficient way to read and advertise.

It was a mistake, Christensen argued, to find fault with established companies not drawn to small, unprofitable corners of the market. Those companies had succeeded because they had developed their own “laws of nature”—an almost intuitive sense of how to make decisions, spend money, and, most important, maintain a good and reliable relationship with their customers. But these were the very qualities, he argued, that rendered them so vulnerable to disruptive technology.

Christensen, a devout Mormon, was staking out a position that bordered on business heresy. In the face of disruptive technology, he wrote, the wise course was not to react to the demands of existing customers. It was imperative to lower revenue expectations for the products spun off by those new technologies. And it was essential to accept the inevitability of failure. If sustaining technology brought reassurance, disruptive technology sowed doubt.

Yates had been with Knight Ridder long enough to recognize how much Christensen’s case mirrored what had taken place at her company. Knight Ridder, under Jim Batten, had ended the Viewtron experiment because the market was judged too small and the cost too high. But now Christensen was presenting an argument suggesting that, in essence, the company had had it all wrong—that because it had lost so much money it could not appreciate that Viewtron did, in fact, serve a market, albeit a small one that could, over time, develop into a far larger one, once the technology became cheaper, accessible, and efficient. Once the personal computer with a high-speed modem became a household fixture, the newspaper would cease being the best way to read, and more importantly, to search for jobs, employees, cars, and homes. That was the moment of disruption. And when it occurred, the companies that had been cultivating their shares of the emerging markets found themselves no longer at the periphery, but, like eBay, in a position to dominate a market that, not so long before, did not appear to exist.

As if by chance, Ingle had in 1990 come upon the very corrective in Mercury Center that Christensen would prescribe seven years later—a small, inexpensive laboratory for trying out those disruptive technologies, a place where modest successes could be celebrated and built upon, a “skunk works” operation that the company could keep running as it waited to see whether the new markets might emerge, or existing ones catch up.

Michael Shapiro is a contributing editor to CJR and teaches at Columbia's Graduate School of Journalism. His most recent book is Bottom of the Ninth: Branch Rickey, Casey Stengel, and the Daring Scheme to Save Baseball From Itself.