I’ve been writing here that what lacks most in Eastern European online media is easy access to capital. Lots of young journalists are eager to benefit from the web’s low barriers to entry to take over a traditional media landscape run by corrupt curmudgeons. All they need is cash.

With this in mind, I visited last week Hürriyet, a Turkish newspaper behemoth that invested $500m in Eastern Europe in 2007. I had an interview in Istanbul with Aslı Yıldırım, manager in Business Development and with Suzi Apalaçi Dayan, head of investor relations, at Hurriyet, a newspaper part of the Doğan Media Group (DMG).

The Doğan group is a Turkish mix between Exxon and News Corp run by Aydın Doğan, described in this article from the Economist (non-gated version here). Its market power is such that it spills over to its neighbors, from Bulgaria to Russia.

Trader Media East: “The best way to grow”

Hürriyet being a (partly) public company, it must please shareholders. There’s just one way to do this: growth prospects. As traditional media starts to saturate in Turkey, Hürriyet has to look online and abroad for growth.

Trader Media East seemed like the perfect prey. A classifieds company active both online and in high-growth post-socialist markets such as Russia, Croatia and Ukraine, it was a perfect match for Hürriyet, which now owns a 67.3% controlling share of the company which moved its headquarters to Istanbul, so as to facilitate integration with the Turkish group.

Aydın Doğan: Why invest in news anyway?

Online sales represented 6% of TME’s total revenues in 2007. Small by western accounts, this is big in markets where online ads make up less than 1% of the market, such as Ukraine. The union between TME and Hürriyet has so far worked: TME continued to grow its sales in the 3^rd quarter of 2008 despite the recessions looming in every country it operates in. On the other hand, Hürriyet offers advice on crisis management, since Turkey’s experience on that matter makes Russia look like a strong economy.

That’s all fine, but you still need some articles to print alongside your ads, don’t you? That’s the beauty of TME. It succeeded in distributing classifieds-only papers in Eastern Europe and it is now helping out Doğan Media in implementing this formula at home.

In other words, no need for journalistic content. When I asked if Hürriyet had once thought about the possibility to invest in journalism in Eastern Europe, Aslı and Suzi answered that it was “not easy to start from scratch”. A PR way of saying that investing in news was never on the agenda. The business situation there is simply too unstable to think of taking long-term positions in local companies.

Apart from Kanal D, a general-interest channel which launched a Romanian version in 2007, Doğan Media made very little investment to develop content production in post-socialist Europe.

Hasty retreat on the Eastern front

Poland’s Agora retreated from full-fledged editorial projects in Ukraine and is now focusing on small-scale, side projects such as blog networks. Doğan Media laughs at the idea of investing in news. News Corp. decided to leave Central and Eastern Europe.

If companies dedicated to making money out of content leave, the market will be left to local barons who treat media assets as a PR arm. The online market remains almost untouched – for now. But all the people I’ve met were sure that as online grows in influence, traditional political and economic forces will try to control it.

Although the nature of the network makes it harder to control and easier for newcomers to build their niche audience, internet still needs funding and some market stability to reach out to the masses. (Try to think of the Huffington Post if it received no VC funding and if access to the website was regularly blocked).

Unless international media groups step into the game and start funding or buying online ventures, internet will cease to be the safe haven for freedom of expression it represents today in the countries of Central and Eastern Europe where the rule of law is shakiest.