Feb 27, 2009 12:01 PM
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Wed Feb 10
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The news that Google is placing ads on Google News has sent a renewed wave of handwringing through the newspaper industry. How dare those Googlers make online news a profitable business!
Of course, Google is planning to keep most of that profit. If Larry and Sergey plan to share anything more than links with the newspapers whose headlines it displays in Google News, they haven't signaled their intentions.
Good on them! If the newspapers had ever been even a tenth as cynical, opportunistic, and clever about exploiting their product and finding new advertisers as Google has, they wouldn't be in this mess. Instead of condemning Google of "stealing" their content, newspapers should be grateful that someone's making a pie — of which they can now ask for their fair share.
For example: A search for Yahoo CEO Carol Bartz on Google contains an ad for a DVD of Bartz's speeches. Can you imagine a newspaper salesforce thinking to solicit that ad, let alone running it in a timely fashion? There's a host of potential advertisers like that whom the newspaper industry has never tapped.
We're no doubt going to hear a lot of newspaper grandees groan that, like Apple in the music industry, Google will capture most of the profits from the online sale of their product. Did it ever occur to them that Apple might be reaping more of those profits because consumers think the portable convenience of the iPod and the one-click simplicity of iTunes have more value than the time-filling music itself?
Unlike the record industry, though, which for a good couple of decades had an enormously successful distribution medium in the CD, the newspapers have never come up with an electronic version of the news that is at once profitable for them and popular with consumers. Their websites are at once too large to shut down and too small to sustain them. The only newspapers seriously considering pay-to-read schemes are also-ran operations like Newsday. The right answer is embracing new sources of traffic (and hence revenue) like Google News — not shutting them off.
A few publishers understand this — generally outcasts like Dean Singleton, who's widely hated by his employees for cutting costs, and who recently killed one of his own by having his scrappy Denver Post outlast the Rocky Mountain News, which printed its final edition today. "The Internet world is a very competitive world," Singleton told the Times. "We don't have to let them take our content. We let them do so because it drives traffic." He's right: If the newspapers withdraw their headlines from Google News, scrappy Internet publications will gleefully replace them. To newspaper publishers who grew up with virtual local monopolies, this thought just doesn't occur.
Publishers should be rejoicing that Google is trying to make money off their headlines. At least someone is.
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