captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. the attack on a gaza-bound aid ship drew more protest today as israel defended its naval blockade. >> ifill: i'm gwen ifill. on the newshour tonight, we examine today's developments including an escalating war of words between israel and the government of turkey. >> lehrer: then on the oil story, spencer michels has the latest on bp's efforts to contain the spill amid growing anger from local residents.

>> here in the fishing village, people are deeply disappointed that the latest attempt to stop the leak failed and they are junior afraid for the future. >> ifill: we weigh the prospects for bp's future after the oil giant suffered big losses on world markets. >> lehrer: then ray suarez reports on another of china's public health problems. the dramatic increase in obesity. >> suarez: rapidly rising incomes, less strenuous physical labor and lots of new foods have contributed to a fatter china. >> lehrer:. >> ifill: geoffrey brown looks back at 30 years of cable news and ahead to a changed media landscape as cnn turns 30. >> lehrer: that's all ahead on tonight's newshour. >> major fundor funding for the pbs newshour has been provided by. >> i want to know what the universe looked like, feels like. >> i can contribute to the world by pursuing my passion for science. >> it is really the key to the

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>> ifill: israel continued today to deitself against charges it mishandled a commando mission off the coast of gas a. the incident also led to the easing of gaza's isolation, at least for the moment. massive street rallies continued for a second straight day as governments around the world condemned israel's deadly raid on the flow philadelphia of ships headed toward its naval blockade around gaza. >> we want to send a powerful message to the arab regimes and the israeli alliance. the united states and to israel that our support for the palestinian resistance will not stop even if we die for it.

>> ifill: in turkey police scuffled with protesters outside the israeliy embassy. half of the activists on board the ships were turkish. that country unofficially supported the aid convoy. of the nine act i.v.f.s killed in the early morning raid, at least four were turkish nationals. prime minister addressed turkey's parliament today. >> this bloody massacre by israel on ships that were taking humanitarian aid to gaza deserves every kind of curse. this attack was obviously an attack on the international law, the conscience of humanity and world peace. it is not possible for an aggressive state that has openly conducted a massacre to face the international community without an expression of regret and answering for its deeds. >> ifill: turkey has been one of israel's few muslim majority allies. the raid has tested their alliance. margaret warner sat down today in washington with turkish foreign minister .

>> warner: how serious is this breach? >> this is very serious. it is very serious because, as i said, according to the law this ship in international sea belongs to the country of flag. it's a clear violation of turkish sovereignty. it is an attack against turkish citizens. we had difficult relations with soviet union during korld war but they didn't attack our citizens. in the last eight to seven years of turkish republic history, first time a state is attacking against our citizens. we cannot tolerate this. >> warner: is this breach do you think irreparable? is this a crisis in an otherwise fairly strong relationship though it's had some problems in the past year or something worse? >> it depends on israeli action. >> ifill: in jerusalem today israel's deputy foreign minister said the dispute between the two nations is not a final break.

>> we have tried and pleaded with everybody, including the turkish government, to try and stop this provocation. however, i think still the importance. relations between turkey and israel will necessitate a continuation of good and strong ties for the benefit of the entire region. >> ifill: but officials from the two nations have fundamentally different interpretations of what happened on board the flotilla's lead ship during the pre-dawn raid. dozens made their way home today, including this turkish woman and her young son. >> i was hiding in a room with my child. the gunshots were landing down right on top of the ceiling. we witnessed it all. gas bombs, sound bombs. i was just afraid for my child. i hope he is young enough to forget everything that has happened. but if the trip was organized in the future, i will not hesitate to take part in it with my child. >> ifill: overnight the united

nations' security council called for an impartial investigation and condemned the raid. >> we believe that an impartial investigation has to deal with all the issues that are involved in this incident. all of the acts of violence that have created this deadly incident. >> ifill: the final statement was less forceful than many had urged. palestine's observer at the u.n. was one of them. >> i think that you can assume that palestine and lebanon and turkey would have liked to see a stronger test and a attempt for a stronger text was tried. but we all know that the security council is composed of 15 members and an agreement was reached in spite of all these different interpretations to the text

that you have before you. >> ifill: this afternoon israeli ambassador to the u.n. told the newshour the investigation should look at actions on both sides. >> as you know at the u.n. every word counts . i think it was drafted this way because they have to look and it called for looking into all the acts in the events that led to really the very bad situation that evolved on the ship. so it's not only from the moment that our soldiers tried to intercept the ship but before that, all the things that led to what happened on the ship. the turks say they can interpret it in any way that they want. i think they were very disappointed because they wanted something much stronger in a resolution or a statement condemning israel. this is not the final outcome. >> ifill: u.s. officials have taken pains to walk a diplomatic fine line.

secretary of state hillary clinton said today that although the blockade is unsustainable, israel should be able to take part in the investigation into sunday's high seas stand-off. >> we support in the strongest terms the security council's call for a prompt , impartial, credible and transparent investigation. we support an israeli investigation that meets those criteria. we are open to different ways of assuring a credible investigation, including international participation. the situation from our perspective is very difficult and requires careful , thoughtful responses from all concerned. >> ifill: at the site of the conflict, israel carried out an air strike today in the gaza strip. israel said there were no casualties.

an islamic militant group said three of its members were killed. in a separate incident two militants were killed infiltrating israel from gaza. the israeli blockade of gaza has been in place since 2007 when the hamas movement came to power. israeli leaders say the blockade is needed to cut off the flow of weapons to hamas and that the act i.v.f.s aboard the flotilla were essentially a front group but the activists argued the embargo has only impoverished gaza's 1.5 million residents. today egypt opened at least one check point that had been blocked off and a spokesman for israeli prime minister benjamin netanyahu said israel would consider ways to ease rather than end the blockade. another ship now off the coast of italy is heading toward gaza and presumably another off-shore confrontation later this week. late today, president obama spoke to turkish prime minister in a phone call. a white house statement said mr. obama expressed condolences for the loss of lives and he promised support for a credible investigation

of the israeli raid. >> lehrer: now the other news of the day. here is hari sreenivasan in our news room. >> sreenivasan: al qaeda acknowledged today its number three leader has been killed. the group announced the death of mustaf a al yazid along with his wife and other relatives. it gave no details. u.s. and pakistani officials said it happened in north waziristan along the afghan- pakistani border. they said he was killed by a u.s. missile attack last month. iraq has moved one step closer today to a possible end of its election impasse. the country's supreme court ratified the results from last march. the secular alliance, led by former prime minister ayad allawi, won two more seats in parliament than the prime miles an hourster a.l. maliki and his coalition's total but no one claimed a majority and the parties remain at odds over how to form one. in afghanistan, elite government troops recaptured a remote district in the northeast, backed by u.s. helicopters. hundreds of taliban fighters had seized the district

district in a week's worth of fighting. the afghan government also defended a national peace conference that opens tomorrow. a spokesman dismissed criticism of the so-called peace jirga. >> i don't think there is logic in saying that this will be useless. of course this jirga is not... was not supposed to be a jirga between afghan government and its opposition. so the afghan government is not participating nor is the opposition participating. this is a jirga where the afghan people are participating to advise the government. >> sreenivasan: some 1600 delegates are expected to take part in the three-day meeting in kabul, but the taliban warned today the penalty for participating is death. the toll from tropical storm agatha rose today to 179 killed in central america. the weekend storm dumped heavy rain that left death and damage. the devastation was evident in a huge sink hole in guatemala city. it opened over the weekend,

reached nearly 100 feet deep and 65 feet across and swallowed an entire intersection and a clothing factory. some 125,000 people have been evacuated in guatemala. the u.s. supreme court placed new limits today on miranda rights. by 5-4, the justices said criminal suspects must tell police if they're invoking the right not to talk to authorities. the decision came in a case from michigan. a man convicted of murder claimed he had invoked his right to remain silent by remaining silent. wall street tumbled today after the failure to plug the oil well in the gulf of mexico. the continuing spill weighed down energy stocks and the broader market. the dow jones industrial average lost more than 112 points to close at 10,024. the nasdaq fell more than 34 points to close at 22222. former vice president al gore and his wife tipper put out the word today that they are separating. an email announcing the split was circulated among the couple ing friends. in it the gores said it was a mutual and mutually supportive

decision. the gores have been married for 40 years. those are some of the day's major stories. now back to jim. >> lehrer: still to come on the newshour tonight, battling the bulge in china and celebrating 30 at cnn but first our look at the impact. oil spill on the gulf waters and on bp. newshour correspondent spencer michels begins with a report from the louisiana coast. >> reporter: a diamond-tipped saw blade started the first of two major cuts today on the pipe that's been spewing oil for 43 days. and late this morning, a giant plume began gushing from disabled blow-out preventer where robot-craft had been doing the cutting. the intricate operation was performed a mile down by remote control. it was part of the latest effort by bp to stem the gusher that's blown at least 20 million gallons of oil into the gulf and possibly more than 40 million. the next move will be to lower

a tight-fitting cap called the lower marine riser package and then begin siphoning the oil to the surface. bp's operation chief :. >> if all goes according to plan within 24 hours we could have this contained. this is being done in 5,000 feet of water and very small issues take a long time to fix. we've seen that all along. so i think over the next 24 to 48 hours we should have this system operating and we should have very little oil being spilled to the sea. we can't guarantee success. once again doing this without human beings on the sea bed is extraordinarily difficult. >> reporter: he said there were yet more contingency plans in place if this attempt also fails. the incident commander, coast guard admiraled that allen, briefed reporters separately as the obama administration moved to distance itself from the oil company. >> while we're frustrated and we're angry we have to keep our heads in the game. we have to keep our shoulder to the wheel, if you will, and the american public has got to

understand that we have to bring this thing through. we have to contain this well. we've got to work through the relief well as we move into august. >> reporter: earlier in the white house rose garden, president obama formally introduced the two chairmen of a new investigative board. former florida senator bob graham and former epa chief william riley will head the panel. >> i'm directing them to report back in six months with options for how we can prevent and mitigate the impact of any future spill that result from off-shore drilling. >> reporter: the president also discussed a separate investigation of possible criminal liability. to that end, u.s. attorney general eric holder was on the gulf coast today meeting with his state counterparts. >> we have already instructed all relevant parties to preserve any documents that may shed light on the facts surrounding this disaster. as our review expands in the days ahead, we will be meticulous. we will be comprehensive. and we will be aggressive. >> reporter: in towns all along the gulf coast even

where the oil hasn't come ashore yet, people have been following raptly the news of the oil spill. this is the town named after the pirate jean lafeet who helped andrew jackson in the war of 1812. in this town some people are angry. some people are just resigned. but they're all deeply worried about their futures. while the federal government has closed off more water to fishing, some areas like bayou remain open. on this humid morning, members of the smith family were after brim, a perch-like fish, well aware that even these waters could close soon. >> tof the politicians and spokemens are pointing fingers at each other and so forth. >> that won't get the problem solved. >> stop pointing the fingers at everyone. >> get to the big table and come to the solution and get this thing wrapped up. >> reporter: for 34 years joe has been running joe's landing,

a store and dock that is usually teeming with commercial and sports fishermen this time of year. but these days it's practically deserted. despite it all, he manages to keep up a sense of humor and a sense of understanding. what do you think about the way bp, the government, the other companies, the state have been handling this? >> i think they're doing the best job as they can. >> reporter: you've had some.... >> i wish they could do a quicker job. >> reporter: with the official job of hurricane season today, he can see even more trouble ahead. >> we're just hoping that they don't have no tidal surge and bring this sludge in our bathtubs. that's what we're worried about. >> reporter: louisiana with its countless waterways and its swamps is home to a unique way of life that residents here from city hall to the bayous are questioning whether they can afford to wait for things to get back to normal if they ever do. the corporate costs are also

climbing. bp said today it has now spent over a billion dollars and its stock value was hammered again today across markets here and in europe. bp's shares have now lost a third of their value since the spill began. >> lehrer: we look now at what the disaster could mean for the future of bp, financially and otherwise. robin west is founder and ceo of pfc energy, an energy consulting firm in washington. sidney finkelstein is a professor of strategy and leadership at the tuck school of business at dartmouth college. robin west, white house press secretary robert gibbs said today that bp has the financial resources to pay for whatever it takes to make this thing... put it back where it was to solve whatever this disaster has wrought. do you agree? >> well, i think there are two issues. one is how do you clean up the mess? then there are going to be all kinds of legal damages as well.

the number could be enormous. bp is a rich, powerful company. depending on the penalties. the penalties.... >> lehrer: like what? >> it could be in tens of billions of dollars. where bp can imagine $10 billion very easily but $50 billion is real money. >> lehrer: give us the financial picture of bp. >> well, bp is until recently was the largest company in terms of market capitalization in europe. they had cash flow north of $40 billion. it's a very, very strong company. it has assets all over the world. it's a world class company. but it's a real challenge if you have to pay out this amount of cash. one of the things to keep in mind though is that a lot of these settlements, a lot of the legal issues will take years to settle. the bill doesn't all come due on the first day. >> lehrer: as was reported today that bp has spent $1 billion thus far. put that in perspective.

>> a billion dollars, they made $5 billion in the last quarter. >> lehrer: $5 billion the last quarter. >> they can manage a billion dollars very easily. as i say it's $20, $30 billion is a lot of money. $50 billion hurts the company. >> reporter: professor, what about reputation? what are the chances of looking at it i realize from afar but as an expert what do you think the chances of bp's reputation surviving this ? >> well, the reputation of bp has taken an extreme hit to be sure. all the oil industry for that matter. can they survive this? well, the truth is that the general public perception of big oil is not all that great to start with. in one way they don't have that far to fall. on the other hand, the reputation ebs stendz to all sorts of other stakeholders including debt holders, shareholders and customers and especially the government.

when you're seen as not being able to take care of your own house, the government is pretty quick to step in to come up with some solutions of its own. some of those could be costly. >> lehrer: are there any examples from past experiences like this that might be relevant to bp's situation? >> well, unfortunately there are plenty of other examples of corporate disasters and breakdowns . you can go to very famous business school case, the tylenol story and j and j and when tylenol had their capsules contaminated on the shelves j and j moved very quickly to remove everything. take the short-term financial hit is lesson number one. be willing to. it looks like bp has been so far. being willing to take that hit. on the other hand there's other examples. there was a company in japan called snow brands which is in the milk industry. they were the number one brand in the milk business in japan for decades.

they had contaminated milk products on their shelves. they kept it a little bit too long. in the end that reputation cost them the company. milk is is not the same as oil for sure. i think there will be a reputational hit and there are other examples. we should mention union carbide with the horrible ba poll disaster. thousands of people died. union carbide damaged to be sure but kept on going. but it does create some vulnerabilities in a lot of different ways not the least being your own position in the industry and whether you might become a takeover candidate yourself. >> lehrer: do you agree with that, robin west? within the industry there's a problem here too. >> i think so. i think that this has hurt the industry somewhat. i agree with professor finkelstein. one of the real risks is what we call license to operate which is the confidence of the public which permits you to go about your business. bp and all these oil companies, they operate all over the

world. it's not just the u.s. government. it's governments everywhere. they have to have their confidence. without that, they can't function. >> lehrer: what about the exxon and the exxon valdez oil spill. we all know about that but exxon is still in business now many years later. what is the difference? or how did they handle it and how were they able to survive it? >> exxon, the first thing, it was a terrible disaster in prince william sound but nothing like the mississippi delta which is arguably the greatest marine swan spawning ground in the world. a lot more people's lives were affected. this has gone on longer. exxon valdez was a tanker spill. all the oil just went out. but i that i the exxon regained the confidence of people because they have such strong operating standards. they have such a strong balance sheet. everybody in the industry knows that essentially they're a very well run company. >> lehrer: professor, there's also been suggestions that companies like bp have been compared to, say, the tobacco

companies. when tobacco became a no-no, they just changed their name. they're no longer the tobacco company. they're something else. is it possible that bp could be ... the name is the problem and one way to solve it is to change the name or change the structure in some way or to sell off assets, that sort of thing? >> well, changing the name is certainly a cynical ploy to be sure. to do with a reputation loss. as you say it's happened. i don't really think that's going to happen here. as we just heard, bp is a gigantic company. operations around the world. they're really big. they have very, very deep pockets. they're going to pay a big price. they're going to pay a reputational price. but to me the key is about culture. and integrating safety and safety is a top priority. remember bp was also the company that had that terrible explosion in texas city back in 2005 that killed people. their recent track record is

not all that great. i think one of the things we can see in terms of looking at other companies that have recovered from these situations at least a little bit, they really have emphasized safety. they built it into the culture. it doesn't just become a buzz word but something people talk about day after day after day and begin to believe in it. i think that will be essential for bp. much more important than changing the name. >> lehrer: robin west, what about the stock price? as we reported at the beginning here that it's down almost a quarter of its stock price, bp is. it lost 15%, another 15% today on the new york stock market. when does that become a problem? >> well, right now, there are those analysts who buy recommendations on bp stock. they believe that the underlying value is so enormous. it's a very.... >> lehrer: you mean this is oil in the ground, that sort of thing. >> they're still making a lot of money in the gulf of mexico aside from this.

they're making money all over the world. this is one of the big he have, richest companies in the world. i think professor finkelstein is right that in the long term i think increasingly what is going to happen is that companies that have big balance sheets and strong operating records are going to be the ones that are going to have this license to operate, to be able to have the support of the public and government. that's critical. i think bp is going to have to work hard to recover that reputation. >> lehrer: what is the spillover to the rest of the industry? >> i think it's very serious for the industry. i think that the industry ... there was what happened around the blow-out itself. then you have trying to stop the spill. and then you have the preparations or lack of preparations really for the clean-up. from the spill. i think that the spill clean-up is is the thing that i think a lot of people in the industry have been sobered. even companies that are extremely well run that as professor finkelstein says have a very, very strong culture, nobody really thought this was going to happen.

people were just shocked this would happen. as a result the safety, the stand-by mechanisms, the skimers and the use of disperseants and everything like this, this is old technology. this is not... going into the deep water technology is some of the most advanced technology on earth at anything. it's like going to the moon. but that same level of technology has not been applied to spill clean-up. that's one of the areas that the whole industry has to focus on. >> lehrer: thank you both very much. >> ifill: now the second in our global health unit reports from china. tonight ray suarez looks at the growing problem of obesity. >> suarez: china's economy is getting bigger. an amazing 9 to 10 percent a year even during a worldwide recession. china's cities are getting bigger. vast department complexes rise

from land cleared for rebuilding. there's a constant hum of construction cranes and motion across the horizon. china's middle class is getting bigger. better educated. better paid. millions of new consumers flock to the new shopping centers, freed from the hard physical habor of their parents and grandparents. all that change has consequences. the chinese are getting bigger too. and fast. the new england journal of medicine reports that 19 million people in china are now obese . while the small percentage of overweight people here still falls well short of america's epidemic, china's rapid rate of increased obesity, 30 to 50% annually, that's six to ten million more each year has alarmed health officials. in the course of just a few decades, china has moved from being a society with a fear of

periodic famine to one with a rapidly rising rate of obesity is a serious public health threat. this doctor is a peed tricia who is studying this phenomenon. >> during the last 30 years of economic development, people's living standards have improved rapidly. their lifestyles have changed enormously. more money means more food. >> reporter: this doctor is trying to convince parents that giving their children more food just because they can afford more food will eventually become a health burden for that child. >> most obese children don't have an immediate health risk. but health problems such as high blood pressure, diabetes and cardiovascular diseases will occur in 20 or 30 years when they become adults because health problems don't appear until adulthood parents don't see the problem. they don't take action. in fact, the traditional thinking in china is that children need to be fat and

that means the child is healthy and strong. this concept of course is wrong. >> suarez: western fast food restaurants have become part of urban chinese culture. i want to know what everybody's favorite food is at mcdonald. >> hamburger. >> skok. ... coke. >> the kids these days, they can eat whatever they want. when i was young i was from a poor family. we did not have enough to eat. all we had were potatos. >> suarez: paul french is the author of a soon to be released book titled fat china. >> what we have here is a one child policy which is not enforced everywhere but is still the norm. so now we have a generation coming through that not only have no siblings but have no aunts and uncles. this has led to what we might term here as the six pocket syndrome which is where every child or little emperor as they're known here as two

parents and four grant parents. those four grandparents and two parents don't really have anything to spend their money on except that child. so they are lavishing that child. they are arguably spoiling that one child. of course after generations of not having enough, people don't want to say no to charn children. they want to let them enjoy the prosperity rather than the austerity that they knew in their childhood. >> suarez: according to the world health organization, between 5-10% of chinese youth are now obese. some of them make their way to the equivalent of a fat farm . here at the fat reduction hospital, patients areot only introduced to healthier foods and daily exercise , they're also given traditional chinese medical treatments like acupuncture. >> with acupuncture, we want

to control the appetite, the desire of eating so they won't feel very hungry. we use it to improve digestion and to break town the fat. >> reporter: this doctor is the hospital's chief executive. >> the appearance of the body is not important to us. our goal is to change their lifestyle, help them understand what to eat and whatnot to eat. >> reporter: the parents of 19-year-old paid for his visit to hospital. his goal is to lose 40 pounds. now in his fifth day he's already lost 15. >> i started gaining weight when i was eight years old. i never stopped gaining. i like to eat deep fried food. i can't control my appetite. >> suarez: as american-owned fast food joints pop up around the country

, they've been followed by another american cultural symbol: weight watchers. at weight watchers in shanghai, program director works with clients to limit the amount of food at meal time. >> unlike the western countries where people are very used to cups, spoons, teaspoons or tablespoons we don't have that. it's hard for people to find out how much they have eaten. >> suarez: chinese meals are often eaten from serving dishes in the middle of the table for all to share. people eat straight from the communal server until the food is gone. how would you know how much you've eaten? it's tougher to limit your portions. >> estimation we would ask them to put their foods... on the plate in front of them. s so that they could have a portion. they could get a sense of their portion before they eat it. that would also slow the

process down. so we're asking people to change their eating behavior a little bit, a tiny little bit. >> suarez: the dramatic increase in obesity here has been followed by a similar jump in the number of type 2 diabetics. in fact china is now home to the most cases of diabetes worldwide. experts worry about the implications that has on the country's fragile health care system. >> the problem with obesity is once people are fat, they are prone to certain diseases. those diseases will work themselves out in the health care system. it's the fragility of china's health care system that is the big worry. >> suarez: bigger portions of higher fat foods are not the only culprit. not long ago china's streets, even in the big cities, were full of bicyclists. now that people have money, cars and motor bikes have

taken the place of bicycles. there are 20 million cars on the road. that number has tripled in just ten years. the tradition of morning exercise in the park still exists, but it's mostly china's older generation that can be found doing their daily routines that keep them moving, keep them limber. today people are doing more indoor work, sitting at computer screens or television sets. >> the great trend in china is urbanization. people are moving into the cities. they're moving away from the countryside. 10 to 12 million people a year. that's projected to go on for at least another decade. those people are coming into the cities. increasingly they're getting white collar office jobs and getting up in the morning, they're getting the subway to work and the elevate tore the office. they're siting in a cubicle all day. they're getting the elevator downstairs and the subway home and they're sitting in front of the television at night and ordering in food.

they're leading a much more sedentary lifestyle than they used to. many more people are driving around in cars where they used to ride by cycles. for children, sport is not a major part of the school curriculum because of the concentration on exams. in general from toddlers up to elderly people, people are nor sedentary in the cities than they used to be . >> suarez: fast-moving china will get first to wherever the developing world is going and won't be alone in a fatter future. the world health organization recently described the concerns over china and worldwide obesity rates as a problem of glob-esity. >> ifill: ray continues his series on china with a visit to the 2010 world expo in shanghai. >> lehrer: next a birthday for a television news pioneer amid a new era of change. geoffrey brown has our report. >> good evening. i'm david walker. >> i'm lois hart.

now here's the news. >> brown: ted turner was characteristically bold and brash when he launched the cable news network 30 years ago and predicted it would become, quote, the greatest achievement in the history of journalism. >> to provide information to people when it wasn't available before . to offer those who want it a choice. i dedicate the news channel for america. the cable news network. >> brown: the idea was simple but revolutionary. 24-hour news channel, a mix of live coverage of breaking stories and analysis and debate programs that would reach around the globe and compete for the three main networks. >> evening news with walter cronkite. >> good evening. president carter says.... >> brown: cnn struggled to gain credibility as a serious news source at first but its ability to jump on and stick with big stories helped make its mark. one was the 1986 challenger disaster.

>> this morning it looked as though they wouldn't be able to get off. >> brown: a year later round-the -clock coverage of a toddler who fell into a well in texas turned baby jessica into a national drama. >> you could hear the applause >> brown: in 1991, cnn reporters continued to broadcast live from baghdad as bombs fell during the first gulf war. >> one u.s. military officer said this is a test of wills. >> brown: the on-the-ground first and longest approach has continued to define cnn through the years but now at 30 it finds itself struggling anew under the hugely changed cable news world that's moved away from non-partisan reporting and toward sharp opinion. dominated by major personalities at rivals fox news and ms-nbc that have overtaken cnn in the rate ratings especially in some of the lucrative prime time

hours. that's turned the network's birthday into a moment of big questions about its future programming and how to best define itself going forward. to some perspective then and now. matea gold covers the television industry for the los angeles times. bob furnad was in top management at cnn for 18 years, including stints as head of political coverage and executive vice president. he retired in 2001 as president of cnn's headline news, and now teaches broadcast journalism at the university of georgia. bob, start by taking us back in time. you came in early on. what were you all trying to do? did anyone have a clue as to how to do it or what might come of it? >> we were trying to stay on the air for 24 hours. i don't think had quite figured out how to do that. we brought a lot of comment tateors in, folks who could supposedly put things into perspective but actually were there to help us fill time. when we didn't have material to fill time, we were

obviously more free to go live with events because we didn't have many commercials to lose. it was a learning time. it was a learning time for everybody. we were staffed primarily by young, inexperienced people that were running the cameras poorly, that were editing the tapes sometimes poorly. so it was a challenge to get on and stay on. >> brown: what do you see as the key to building that audience and then building the brand eventually? when did you know it was working? >> well, i think we knew the effect of our presence in 1987. your set-up piece mentioned when jessica, the little baby jessica was in the well in texas. it was during prime time, during the evening hours. the broadcast networks went p went quickly with a bulletin to say this story was going on. then they went back to their normal programming. people switched to cnn. we saw a gigantic climb in our ratings. people saw us stay with the story and learned when there was a big story cnn would stay

when the broadcast nets would leave and go back to programming. that was the big turning point for us. the major turning point was the gulf war one when we had three reporters, a presence in baghdad and the other networks did not. >> brown: matea gold, cnn helped create cable news. it helped define the kinds of storys that bob was just talking about. but now it's a quite different world, isn't it? how do you define the big change we're in right now? >> in so many ways cnn invented the concept of 24-hour news. that's been aped and imitated all over the world. now it's something that permeates i think our daily existence. you no longer need to turn to cnn to get that. really, the network is really reaching its 30th birthday at sort of an awkward time. it's seen a big fall-off in its ratings since the heights of the 2008 election. that's something they're struggle to go cope with right now and figure out what do they do next. >> brown: give us a little perspective on that.

in the last couple of weeks you had a lot of turn-around or drama, i guess, in their prime time schedule. campbell brown announcing she's leaving. the stories about larry king not pulling in the numbers he did before. that's the immediate issue i guess, right? is deal ing with that prime time programming. >> you know, it's interesting. so far this year the networks' prime time ratings are off by 40% which is really dramatic especially compared to that of its competitors. the challenge for cnn was really underscored when campbell brown asked to be released from her contract. she released really a remarkable statement saying plainly not enough people are interested in the show that i'm putting on. i think that kind of summed up the challenge cnn faces. it still has that brand and that identity of the place that people turn to for breaking news. but when that news subsides it doesn't offer the kind of really polarizing opinionated provocative host that you can

find on fox news and ms-nbc in prime time. the question they're wrestling with right now internally is what do they do? they are not going to abandon that dedication to, as they put it, non-partisan journalism, but i think they are looking at ways to bring in sharper viewpoints and try to feed some of that appetite that viewers have at that hour. >> brown: bob, put that in the larger perspective, this issue of sticking to a middle ground type of straightforward journalism versus the partisan journalism that is around them. this is a big issue for all of us in news, television and otherwise. how do you see what's going on? >> this is... this has been very well put by your guest from the l.a. times. this is a real problem for cnn. i don't think that the solution is to go one way or the other. the solution is to stay where we are, stay in the middle of the road. but the network needs to create some appointment viewing in programs during

prime time that are not clones of what the others are doing. they've taken one-hour programs and made excellent news/interview programs out of them. but by 8:00 at night, people have gotten their fill of news. clearly that's not what they're looking for. i think there are some other opportunities but clearly the direction which they've gone has not been ... not worked right now. larry king has gotten older on the air. he's had the oldest demographics for years on the air. that's not good for cnn. the advertisers want younger demographics. >> brown: matea, fill in the rest of the picture for cnn how does all this affect their financial situation, their ability to keep what they've done so well for so long. the bureaus going, the reporting going to be able to run and stay on the ground for the storys that do break? >> you know, ironically cnn is is on track to have a record profit growth this year that will be after six years of

double digit profit growth. this is something that cnn executives continuously emphasize and are frankly quite frustrated by the focus on prime time ratings. prime time advertising makes up less than 10% of the overall revenues for the company. they say you know what? this is not make or break for us. we have a business model that allows us to thrive. they rely a lot on cable subscriptions both domestically and internationally. so they are actually still a very robust news organization at a time when we've seen deep, deep cuts to other news organizations. i think for.... >> brown: go ahead. >> jeffrey, that's a good point but one thing that matea mentioned was that part of the revenue stream comes from the cable operators. that means that cnn has got to ask for top dollar for a news network from the cable operators. if the ratings are low, if the audience can't watching, cnn's bargaining power with the cable operators declines. >> brown: you've both said that... go ahead, matea.

>> i was just going to say it's also just an image problem. i think that aside from the financial bottom line right now cnn has been battered really with story after story about its prime time woes. even though that's just a fraction of their, you know, schedule across the board, that has created a perception that the network is no longer as vibrant and as essential as it used to be. that's something that deeply troubles people inside the network. >> brown: but that's the case even though, bob, you've both said that it still has this global presence. it still has the brand name. how much influence does it still have these days? >> cnn has great influence. it's still watched in the power rooms around the world. in the state department. the pentagon. it's still being counted on for information. it is still an electronic wire service for the world. it's got an imminence news- gathering operation. it's got over 600 affiliates in this country alone to give

it material plus all the foreign bureaus and links us with other countries who don't have bureaus. cnn has an enormous news- gathering power. the fact that the material can't get to an audience is troublesome. >> brown: we'll have to leave it there. and watch. bob furnad and matea gold, thank you both very much. >> thank you for having me. >> you're welcome. >> ifill: finally tonight, the internet and democracy. does the web help people to be better informed and to be better citizens? or can an on-line free-for-all actually be a threat to democracy? those questions were at the heart of a recent debate presented by the university of virginia's miller center. arguing that the internet promotes democracy were jimmy wales founder of wikipedia and mike a sifrip founder of the personal democracy forum internet site. arguing that the internet

poses a threat to democracy were farhad manjoo, a slate magazine columnist and author of true enough: living in a post fact society. and andrew keen, a silicon valley entrepreneur and author of the cult of the amateur. newshour economics correspondent paul solman was the moderator. >> reporter: does the internet encourage people who would not otherwise find each other no matter how kooky their ideas might be to do so to be reinforced in those ideas and make them more as opposed to less narrow minded? >> the mistake is to separate the internet from the general culture. there's clearly a general culture problem with the echo chamber. there's clearly more and more of a failure in america of people of different political persuasions to respectfully and creatively talk about issues. that's both in mainstream media and on the internet. i think the internet

is a reflection of an increasingly fragmented world, an increasingly ironically given we're supposed to be living in this social media age, an increasingly lonely, fragmented, isolated age in which we sit in front of our computers. we have less and less physical contact with everybody else. we are more and more convinced of our own ideas. >> i really want to point folks to a new study done by the university of chicago that actually looked at about 1500 news sites and the traffic to those sites based on data that various tracking agencies like com-score pulled. for these researchers. what they found is that visitors to extreme conservatives sight silts like rush limbaugh dot-com are more likely to have visited a ... and visitors to extreme liberal sights like think

progress or move on dot-org are more likely to have visited fox news than a typical on-line news reader. in fact there are two types of things going on here. the low news user online, the grazer, the person who just checks the news, they mainly go to a few big fairly centrist sites like cnn.com, usa today, yahoo news that are more or less in the middle and they're just for people who are just checking whatever the top headlines are for the day. and then the political junkies who everybody thinks are in these horrible silos where they only talk to themselves and reinforce the worst worst extremes are actually all over the place. they're not just at fox news. they're at fox, at the "new york times" and everywhere else. >> certainly you can silo yourself but i don't think that's ever been untrue. so , know, what effect is it having overall? i don't think we really know yet. i believe it's really more, you know, as micah was saying

that people go to certain sites. maybe you're right. they go to the opposing site just to see what those idiots are saying. >> and to say things to those idiots. >> but then that's not siloing anymore, right? it may be a different problem but it's not siloing. >> you're right. this chicago study is one study that suggested that perhaps people aren't siloing themselves. there have been others that suggested that maybe the ... maybe people who read blogs are siloing themselves. there was a study about four years ago, three or four years ago that suggested that blogs on the right were linking mainly to other right wing blogs and vice versa with the left. even if people aren't siloing themselvess on line, what we're seeing more and more is that the extreme points of views that we're getting from... that couldn't have been introduced in to national discussion in the past are being introduced now by this sort of

entry mechanism. people put it on blogs and then it gets picked up by cable news and then it becomes a national discussion. >> one of the reasons they're coming together online is precisely they turn on the television and they see, wow there's an idiot screaming at another idiot. i don't care. it's time to go actually understand the issue. i think all of these things are really important. of course i think we can't neglect that there are bad things on the internet. there's bad information and misinformation. there's a lot of noise. but we have to always remember to look at the net effect. we can't just look at one bad thing or another bad thing. we have to say summed up altogether in total is this phenomenon as a whole good or bad for democracy? i say having people talking to each other about real issues is always good for democracy. >> ifill: to watch the full debate check your local public television listings. >> lehrer: again the major developments of this day, israel faced continuing criticism over monday's raid on an aid ship that turned deadly.

robot submersibles began major cuts on that leaking oil pipe on the floor of the gulf of mexico while attorney general eric holder announced a criminal ve into the oil spill. al qaeda acknowledged that its number three leader was killed last month in pakistan. hari sreenivasan in our news room previews what's there. >> sreenivasan: on the rundown we've posted more of margaret's interview s with the turkish foreign minister and the israeli ambassador to the u.n. about the raid on the ship bound for gaza. white house reporter talks about how the obama administration is juggling crises at home and abroad. ray adds more to his reporting on obesity in china. you can ask questions in our forum on the causes and implications of the problem worldwide. and on art beat, geoffrey brown interviews a guggenheim museum curator about the life and legacy of sculptor louise bourgeois who died yesterday. all that and more is on our website newshour.pbs.org. gwen?

>> ifill: that's the news hour for tonight. i'm gwen ifill. >> lehrer: i'm jim lehrer. we'll see you online and again here tomorrow evening. thank you and good night. >> major funding for the pbs newshour has been provided by: chevron. this is the power of human energy. pacific life. the power to help you succeed. intel. sponsors of tomorrow.

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