Thursday, April 16, 2009

Don’t blame Google for newspaper woes

Newspaper people are wasting time and wasting their breath in blaming Google for the failure of their products to thrive in the digital universe.

They need to look to themselves – not Google, Yahoo or some other third-party savior – to begin strengthening their franchises and building up their businesses on the Internet.

The airwaves have been clogged in the last couple of weeks with newspaper people alternatively blaming Google for the industry’s problems or begging Google to come to their aid.

Google isn’t responsible for saving the newspaper industry or journalism. Publishers and editors are.

As a rationally managed corporation, Google will do only the things that advance its best interests. The company isn’t going to start paying for newspaper content or sharing its revenues with publishers unless it is required to do so to grow its business, defend its franchise or comply with some as-yet-unenacted law.

For the record, newspapers actually had a head start over Google. But Google “got” the web. And newspapers didn’t. That’s not Google’s fault.

Before you blame Google, consider:

:: Several newspapers launched their first websites by the time Larry Page and Sergey Brin met at Stanford University in 1995 and started noodling on a research project called BackRub.

:: Two or three years before the first public peek of the still-nascent Google in 1998, the ill-fated and short-lived New Century Network had a plan to aggregate the content from 140 newspapers in searchable format for the web. The plan, which included the idea of inserting ads in selected markets at the push of a button, died when NCN succumbed to industry infighting.

:: It was not until October, 2000 – a good five years after most newspapers were up and running on the web – that Google figured out how to make money off its spectacularly growing traffic by selling keyword advertising.

As Google and many other savvy online publishers learned how to capitalize on the openness and interactivity of the Internet, newspaper publishers stubbornly spent the last 1½ decades trying to sustain their once-enviable print business model in the face of overwhelming evidence that everything was changing: technology, consumer patterns and advertiser behavior.

For an excellent example of the sort of opportunities missed by the industry, look no further than this tale of how the Boston Globe blew the chance in 1995 to buy a significant share of Monster.Com for a comparatively modest $1 million.

Or, ask yourself why Dow Jones, the publisher of the Wall Street Journal, never started its own online stock site. Instead, Dow Jones waited until 2004 and spent $520 million to buy MarketWatch, faithfully printing stock listings in the newspaper all the while.

Today, print advertising has fallen off a cliff because consumers find it faster, easier, more timely and more fun to get their news online. Advertisers increasingly are gravitating to online media instead of print, because it is cheaper, highly targetable and the results can be readily measured and analyzed.

None of this is Google’s fault. Blaming Google won’t help.

31 Comments:

Blogger Working said...

I don't blame Google. But it's long past time for content creators of all kinds to challenge the legitimacy of a business model in which their content is used to draw an audience for somebody else's ads.

No, it's not "stealing content" and yes, content producers get traffic from click-throughs. But look at it this way: Company A creates a product and gives it away for free, counting on revenue from advertisers to pay the rent. Company B comes along, points a sign at Company A, and then starts competing with Company A for the same advertisers.

Except that when Company B posts an ad near its sign pointing to Company A, Company B keeps the revenue. And since Company B has no overhead, its ads are cheaper than Company A -- and Company A has to lower prices to compete.

This is the basic model of all search and aggregation sites. It's not "wrong," it's not "stealing," there's no "blame" here.

But is it really a wonder that when Company A starts to struggle, it starts to take a long hard look at Company B?

8:08 PM  
Anonymous Walter Dnes said...

> Today, print advertising has
> fallen off a cliff because
> consumers find it faster, easier,
> more timely and more fun to get
> their news online.

And advertising, too. Advertising is especially important, because it keeps newspapers alive. I live in Toronto. In "the good ole days", when I was househunting for a condo, I'd have to buy super-thick Friday and Saturday newspapers, and spend hours plowing through pages of "Condominiums For Sale" ads, mostly on locations I wasn't interested in, and condos with "features" I didn't need.

In 2007, my most recent move, I made use of the Canadian MLS website. I was able to restrict searches to the part of town I was interested in, the price range I wanted, and the number of bedrooms, etc, that I wanted. A typical search was 15 seconds, and it returned a couple of dozen hits. I was able to spend 10 or 15 minutes a day, every day, searching for my dream home. I ended up giving the real-estate agent some leads.

I'm sure that job-seekers go through something similar.

I am *NEVER* going back to doing it via newspapers. Nothing personal, but newspapers just don't measure up to web-based queries. Newspapers are like horse-and-buggy versus the web being a station wagon, on a 500 mile journey. the old way is soooo painful. And the new way is a lot easier, even with dialup.

9:29 PM  
Blogger Herbert Barry Woodrose said...

This is great work as usual.

I have to add - this doesn't even address a far stickier point that no one is touching because we don't like what it might mean about our entire system - regardless of whether we can really magically advertise away all our problems, does the public have a basic right to know what is happening to them, and who is doing it? The model today says, emphatically, "NO." Even though the AP is heavily publicly subsidized, we have no 'right' to that content. Even though a startling amount of the APs content is repackaged material, often not properly credited to original source, we don't have a 'right' to that content. A lot of us are getting a little sick of living in a Roman style system where the Crier stands on a box and informs us what we have left, what is ours and what we have basic rights to, from all the wealth we create in this country.

10:52 PM  
Blogger Amy Segreti said...

I completely agree. I think it took newspapers a long time to "get" the Web partly because some people truly believed a lot of it wasn't going to signify much change in the world of news. It just wasn't going to matter; the Web would be a separate world, and it would thrive or it wouldn't. But I can understand that viewpoint and can also understand how it is completely ridiculous.

I worked at a newspaper where we would never consider posting articles online before they were printed. Never. That's how it was. Now? As soon as pieces are written, they are published online. The morning newspaper contains almost everything you've already read and maybe even blogged about the night before. And in the rush to be the first to publish a story, newspapers helped to make themselves less important.

Amy Segreti
lightonbrokenglass.blogspot.com

11:03 PM  
Anonymous Anonymous said...

>> [Working] And since Company B has no overhead, its ads are cheaper than Company A -- and Company A has to lower prices to compete. <<

I would accept this argument, if you could somehow prove, that the lowering of prices were due to Google, and if Google didn't exist (hypothetically), the newspapers would survive on the net.

I personally doubt that, and the ad prices on the web were always relatively low, they were not lowered because of Google.

1:36 AM  
Anonymous Anonymous said...

Herewith the nut of the issue. Newspapers don't "create" a product and never did, no mater how hard the industry wishes it to be so.

The "product" - news - is nothing more than undistributed information. Information has been shared among human animals since the cave men. Drawings on cave walls, stone tablets, papyrus scrolls, semaphores, smoke signals and the telegraph have all been used to distribute information.

And newspapers.

Newspapers are merely one format among many that the human race has used to share information. And like the semaphore, it's time has come and gone.

Walter Abbott

2:11 AM  
Blogger timlloyd said...

Thanks for having the courage to say what needs to be said.
I bet the newspapers are happy for their journalists to use Google when researching stories? I know I have done the same.

2:16 AM  
Anonymous Anonymous said...

Hear! Hear!

Newspapers had better start putting some serious money into improving the functionality of their web sites. Making them fast and easy.

But they also need to overcome all of their biases - trying to encourage more clicks, trying to set up their sites so that more clicks are required, ...

Our newspaper web site makes the central and fatal mistake of not trying to create an easy, fun and fast web-browsing experience. All of the goals are to do something else. The site is slow, cumbersome and extremely confusing to navigate. I hear it from EVERYBODY in the community.

We also are hamstrung by our corporate parents who have "given" us a system (Saxotech) that is really hard to configure, but that does tie in with our print system fairly well. Our corporate parent has also crushed many of our attempts to improve our web site by going around its core limitations. We develop cool new site features on other platforms and then can't get the final approval to put them live.

Our tiny Web team is getting demoralized and is sitting on their hands at the moment waiting for a Saxotech upgrade whose functionality our corporate parent isn't even clear on. When are we getting it? This year? Maybe? Until then, they aren't trying to improve the site. They don't have approval to do so.

How is that for damning??? Are you listening, Ottaway???

I also have to agree with the commenters who are pushing for more deep data on a community. That is key.

5:38 AM  
Anonymous Anonymous said...

Hear! Hear!

Our newspaper makes the central and fatal mistake of not trying to make our web site easy, fun and fast to browse. They focus on setting it up so that it encourages click throughs. They have a host of other goals, none of which is to serve the reader. The result? A slow, cumbersome and highly confusing site to navigate.

Every person in the community that mentions the Web site tells me so.

We also are hamstrung by our corporate parent. They have "given" us a content management system (Saxotech) that is hard to work with online. It does tie in fairly well with our print production system, funneling stories to our Web site, but we can't do much with them once they arrive. Our home page and many other key pages have a structure we can't really change. And they are not good.

Worse, our tiny Web team has been developing several highly sought features on other platforms to run on our site, and just as we are ready to hit the final live button, our corporate parent takes away our permission to do so.

So now we are awaiting a Saxotech upgrade. Until it arrives we can't basically do anything to improve the site. The Web team is demoralized.

Even more damning, the corporate parent admits they don't even know the functionality of the upgrade yet!! When will it arrive? This year? Maybe? Until then we are hamstrung. Our site is a convoluted disaster. Are you listening, Ottaway Newspapers?

I'd also like to say that those pushing for deep community data are absolutely correct. That is key to offering something other sites can not. We can do this easily. Really.

5:49 AM  
Anonymous Dave D. said...

...Looking for the " whodunit" in the media murder mystery is a lost cause. It doesn't matter. Popular, valued, rare and precious newsfolks find now that they aren't any of those things. Folks who love information and hate the press are where to seek salvation in the news business. Until you can tap into the folks who USED to buy and read newspapers you won't find a way out of the brambles. The newspaper business is dead and everyone here knows it. Trying to create a frankenstein from the patched parts is painful to watch and a waste of effort.

6:15 AM  
Blogger Working said...

"... prove, that the lowering of prices were due to Google, and if Google didn't exist (hypothetically), the newspapers would survive on the net."

I never said that Google alone caused the lowering of prices, or that if Google didn't exist the problem would be solved.

My point was that ALL aggregators and search engines -- Google being the biggest -- compete with online news sites for advertisers. More places to advertise means lower rates for ads.

Which, as I said, is not evidence of wrongdoing. But again, these sites use other peoples' content -- in links or in excerpts -- to draw eyeballs to those ads. You go to Google to find other content, not to look at Google content. And on your way to that content, Google shows you ads.

Mutter is right that it does no good to "blame" Google (or similar sites). My point was that it nevertheless is not outrageous for content producers facing financial hardship to explore ways they can recoup some revenue from the sites that use their content to draw ad dollars.

Will it work? No idea. But it's more complicated that "Stop blaming Google for your woes."

8:36 AM  
Blogger Kang (not the one from The Simpsons) said...

Working said, "when Company B posts an ad near its sign pointing to Company A, Company B keeps the revenue."

Bad analogy. More like: when companies a through z produce something, then company 27 comes along, sees people trying to figure out which of the 26 companies has what they want, asks each customer what it wants, then points it to the ones that have it, and then keeps a fee for that while each receiving company also receives a fee from the customer's visit, albeit smaller than the one that company 27 got.

Google makes its money because people decided the search/filter is what had the most value because it points them at only the content they want.

10:01 AM  
Anonymous CT Moore said...

I agree with you that publishers (and editors) need to be held responsible for saving the newspapers they run. After all, newspapers are primarily in the business of providing authoritative information so that they can sell ads. As long as there’s still a demand for said “authoritative” information, newspapers don't have to change their product, per se, but rather their business/revenue model. They have to become less of newspapers and more of news organizations.

And the thing about new/social media is that they offer the potential to sell ads better than we've ever been able to. And that’s where their revenue model has to change, in the delivery of advertising.

They have to start phasing out (or at least stop relying on) print editions, and start thinking of ways to use technology to better deliver both their content and the ads that they sell alongside it.

And this isn't rocket science, either. It’s something that A-list bloggers and affiliate marketers have been doing on a much smaller level for sometime. All newspapers have to do, then, is scale out a revenue model that’s already established and proven.

11:09 AM  
Anonymous Bob P. said...

It’s disingenuous to say, “oh, the aggregators are just helping readers find what they want and pointing them in the right direction.” It’s not that simple. There’s a big fuzzy gray area here, which I think is what papers are so irked by.

The thing about aggregators like HuffPost (which I’ll admit I visit often): More often than not I DO NOT click through to the originating source. I read the summary HuffPost supplies in the “quickread” box. It’s a bit like a jumpline in the paper. People will read to the jump and quit -- unless they are extremely interested. Lots of people surely just read the “quickread” box to get a sense of the headline and then stop. The quickread box comes with an ad. Is the revenue from this ad going to HuffPost or to the news organization that originally published the article? I could be wrong, but I’m guessing HuffPost collects the revenue.
So HuffPost is drawing readers using the work of others and then selling and ad because those readers come to them.
Under fair use law, I guess this is all fine. And is there value in the “aggregation” process (what we used to call “editing”?) Of course there is. Still, there’s something vaguely unethical about this business model -- as “Working” pointed out in earlier comments.
Sure just complaining and pointing fingers is no good. Yes, newspapers were asleep at the wheel for far too long.
Now this new initiative by Steven Brill and others to create some kind of universal pay system for news makes me wonder. They’ve retained attorney David Bois. Do you retain a guy like this just for advice? You have to think this group is prepared to take a hard stand and perhaps take some of this to court, to challenge some of the aggregation practices that have emerged. Maybe this is a sign of desperation? I don't know. But the search/content thing is not so black-and-white. There a gray area and there is some unfairness in there.

2:53 PM  
Anonymous T Heller said...

"look no further than this tale of how the Boston Globe blew the chance in 1995 to buy a significant share of Monster.Com for a comparatively modest $1 million."

Who knows? -- that might have been the last we'd have heard of Monster.com. Someone else would have seized that space after the Globe drained it of its creativity and its founder left.

6:01 PM  
Anonymous Bob Dunn said...

Thank you, Newsosaur - this one is right on the money.

I have to laugh at "Working" and the other obviously still clueless newspaper execs who are so puffed up and entitled that they forget all the times they stole (and continue to steal) their story ideas from smaller community newspapers and (doh!) bloggers on the Internet.

Bitch about Google at your peril - if you ever figure out how to track traffic arriving at your poorly designed web sites from Google News, it's possible you'll learn the truth: You get a lot more value in the form of web site traffic from Google than Google gets from you in the form of news content written by your reporter-slaves.

And if those content slaves are any good, they'll band together with five or six equally talented writers/reporters and become your competition tomorrow.

Meanwhile, with a tweak here and there in its member contracts, the AP could have (and should have had years ago) the best news aggragation site in the universe - and they could command top ad rates because they could attract lots-o-eyeballs.

Instead, the average civilian reader will find that their site sucks and there's absolutely no reason to visit - despite the fact the AP supposedly has the keys to some of the best reporting and news photos anywhere.

At some point, a collection of people who purposely refuse to even try to get it deserve to fail.

6:54 PM  
Blogger Steve Ross said...

When it came to the web, newspapers did EVERYTHING wrong -- they would not match dot.com salaries. They set up their web operations as separate companies away from the newsroooms -- and made sure they weren't unionized. They proved over and over that they valued sharp writing more than sharp reporting and data-gathering.

They thus gave up much of their natural advantage over the bright kids working at home.

But even after all of that, the dailies had on average a 20% profit margin on operations as late as 3Q2007.

7:25 PM  
Anonymous Anonymous said...

Amy Segreti wrote

I worked at a newspaper where we would never consider posting articles online before they were printed. Never. That's how it was. Now? As soon as pieces are written, they are published online. The morning newspaper contains almost everything you've already read and maybe even blogged about the night before. And in the rush to be the first to publish a story, newspapers helped to make themselves less important.

Let us seriously take a look at that, especially

The morning newspaper contains almost everything you've already read and maybe even blogged about the night before.

And then we wonder why people are no longer buying morning newspapers.

4:49 AM  
Blogger Kang (not the one from The Simpsons) said...

Bob P., how is what HuffPost is doing any different than the local AM radio station reading the news out of the paper? Which the newspaper traditionally has only fought when it was done without attribution? Which the HuffPost is not doing? There is long historical basis for newspapers to lose any fight to gain more than attribution for a short summary of what they report.

5:46 AM  
Anonymous Sandra Persmen said...

Never mind your graphs and charts.

Want to know what's happening to journalism? Watch Bolder, our Wonder Lab, trot down the driveway each morning to get the NYTimes.

He used to dance around, flip it into his mouth, and run back.

Now the paper's so skinny it just slips out.

But he's a hunter, if not much else. Eventually he bites down hard enough to hold it.

Clearly, he's as disgusted with its shrinking size as readers are.

9:17 AM  
Blogger Lex said...

Good post.

Enough said.

Time to stop the whining and blaming.

Amen.

Lex Wadelski
Austin, Texas

10:26 AM  
Anonymous Bob P. said...

Kang: You're right. It's not any different in principle than the morning DJs reading the headlines from the paper. This very thing was happening at a paper I worked for a long time ago. Eventually the publisher got so irritated he called the owner of the radio station -- or maybe he cornered him in the bar at the local country club -- and asked him to tell his DJs to at least say "the Daily Times reported ..." Yeah, this was back when papers were still making pretty good money, so it wasn't a financial thing as much as it was an ego thing. He just wanted credit. Things are different now in that papers are more desperate because they're not making so much money. So yeah, there is a long history of this kind of thing. But that doesn't make it right.

Yes, I still work at a paper -- no I'm not an executive, just a rank-and-file cog in the machine. I agree newspapers have completely screwed up with regard to the Net. Papers never really grasped it. They still don't to a large extent. Still, that's no excuse to ... I won't say "steal" ... let's say "appropriate" their work. Because they are clueless with regard to the digital world doesn't mean they don't still sometimes do good journalism.

I just think this is a bit like raiding grandma's bank account while she's in the nursing home descending into dementia. "Oh, she doesn't need the money, she'll never miss it and she'd not long for the world anyway. Who cares?" Doesn't make it right. I do realize in matters of business and with lots of money at stake, ethics are far from people's minds. I don't expect anything to change. Just thought I'd bring it up -- to say that the newspapers, clueless as they may be about many things, do have a point when they say their reporting is subsidizing other ventures.

8:42 PM  
Anonymous Anonymous said...

I'm a former journalist. I remember when the Canadian paper I worked at decided to put all their news on the web right away on the theory that radio or TVs stations would pick up the stories and people would read the good ones the next day in the paper. Only problem is they didn't have to wait until the next day. They could read them right away. So why buy the paper? I used to buy two papers a day, now I buy one on weekends.

Also, I'm now running a business that does some classified advertising . . . or used to. I now do it on web sites at a much cheaper cost, and I get better results.

10:07 PM  
Blogger John Fensterwald said...

"Blame" is provocative, effective in stirring debate, as Alan Mutter often does. But blame doesn't move the discussion forward.
There's no question that the big newspaper corporations blew it. Couldn't figure out the Internet and many still don't.
So what is Google's responsibility, as a corporate citizen and company dependent on someone else's news copy? Doing no evil in this case means not standing by idly, shrugging, as reporting withers as newspapers go through massive layoffs.
There are some terrific alternative regional and community news sites waiting to be launched. Finding talented journalists is the least of the problems. Some foundations are willing to put up initial money, but not unless there is a prospect for breaking even down the line. Can Google help or partner with these emerging community news sites to use search technology and develop ad programs to make money at the local level? No doubt it could -- and should. Start with your own backyard in Silicon Valley, Eric Schmidt, and watch online community journalism explode.

1:29 AM  
Anonymous Anonymous said...

Who really benefits from search-initiated news access? The other day, I entered the search keywords "Yankee Stadium + New York Times" into Google. What came back was a long list of sites, some linking to the nytimes.com, and some not.

What was more interesting is that there were NO keyword ads on the Google results page. So in essence, Google provided a free valued service to me and received no revenue for it. Of course, if I did click through to one of the New York Times stories, the article was festooned with banner and display ads, presumably generating revenue for the Times.

It strikes me that the assumption that Google is disproprotionately benefitting from its ability to link to newspaper articles doesn't give a complete or accurate picture.

The far bigger reality here is that by searching for news on Yankee Stadium, Google returns thousands of choices, only some of which come point to the New York Times. And that genie is not going back in the bottle.

5:24 AM  
Anonymous Anonymous said...

I work for a large newspaper corporation and have worked in the advertising side of the business for over 20 years. I (along with my company)also agree with these views.

One way to look at this situation is to think about basing our business model on what our customers' needs are. Our customers are advertisers and readers. What are they looking for? Our readers obviously are looking for their news online and our customers are trying to reach more of their market. They recognize more people are going online. It's not about us. It's about them. This is the way to be successful and we all know it's about the money.

I heard a perspective that makes a lot of sense: Why do we charge for subscriptions? It's not for the revenue. That's almost inconsequential. It's so that we could have audited circulation for our advertisers. When we run ads online, it is trackable. If we don't provide our news content online for free, someone else will.

Are we a "news" company or a "paper" company?

9:14 AM  
Anonymous Anonymous said...

Even those who blame Google will have to face the fact that there will be less advertising to go around, because there are so many places on the Web to advertise and because advertisers can use free, targeted e-mail instead of Web or print ads.

Journalists need to fact the fact that many people want entertainment more than news. So how can journalists convince people to pay for information about their municipality, county, state, country and world?

Often in journalism, the news isn't of widespread appeal. We aren't talking about the search results from "Yankee Stadium" here, we're talking about the search results for "Podunk municipal budget." How much will an advertiser pay to be on view next to that search, and will the amount be significant enough to support the cost of journalism if the search engine shares the revenue? Unlikely.

There are lots of businesses that use other property to make a profit. Credit reporting agencies get income by aggregating facts about consumers (and plenty of consumers resent the fact they're making money from "personal" data). Catalog sales operations that sell products they don't produce also aggregate product information and make money when the products sell for full price.

The best way to make money from content may be to provide it through some bundled service -- news used to be bundled with ads on paper. Now maybe it should be bundled with cell phone apps, subscription entertainment, customized search delivery or some other as-yet undiscovered package that customers will pay for and read or listen to often enough to be informed.

The question is, will consumers consume advertising to support journalism or will they pay for services that include journalism when they aren't actually interested in following what the school board or the county planning commission are doing?

Audience indifference is the other big problem that newspapers haven't overcome, and it is more of a threat than Google.

5:14 PM  
Anonymous Toronto Realtor said...

Nicely said, I must absolutely agree with you, newspapers need to stop bragging about this topic and need to realize they're the ones that made the mistake of not trying to explore the possibilities of the web. Google just took the chance and succeeded, good job.

Take care, Elli

4:01 AM  
Anonymous Anonymous said...

Anonymous

Ottaway is listening and rumor has it that they are working directly with SAXOTECH to host with them and get on the latest version. A few months I hear. We've had good luck with SAXO's new API and scripting engine that pretty much let's us do as we want building around their core. SAXO moved their hosting from Virginia to Atlanta and our sites are very quick.
But, back on topic. Google doesn't have our local content. They are frothing at the mouths for it, but it is ours and we are using is for all it's worth. I see the day when we are pulling our content off the web to print and send to some subscribers.

6:33 AM  
Blogger nicko said...

perhaps newspapers did do 'everything wrong' when it came to the web, but one must realise they based their assumptions on some 300+ years of newspaper experience in which advertising and classifieds provided a very comfortable revenue stream to support the industry for so long.

in today's online news world, the start-up costs for a website are minimal, the content with which to aggregate is plentiful, and the consumer no longer has the time, or the will, to engage with the news in the same way they have for the past three centuries.

from this perspective i don't think the newspaper industry, or rather, the 'old heads' that control the industry, will change. they are too stuck in their ways. more likely will be that once the current generation of editors and publishers retires (or is replaced), a new breed of news person will step in who understands the online news business and who aren't so nostalgic and sentimental towards paper based news.

if anything, the current 'crisis' in news is based in the unwillingness of old habits to die.

whilst change is never easy, neither is a slow and painful (and very public) death.

9:41 AM  
Blogger Arek said...

Well said Alan,

I took alternative approach but came to exactly the same conclusion. The key issue is that newspapers lost the ability to control the supply of textual and graphic content to a specific geographic location as well as the exclusivity of access to the audience in that location, and hence the monopoly of setting the price of advertising!

Newspaper publishers’ response is to raise paywalls but the strategy for all media portals should be to get more people in rather than locking their content behind pay walls, as volume of traffic is more valuable commodity than whatever can be generated from access fees (for full analysis please see my recent post: The real cause of newspaper troubles).

And one final comment. Just think how good the media publishing business must have been before the Internet. Their current online media ventures are generating revenue that would be envy for any online business. Yet, they still complain it is not enough to compensate for what they have lost in newspaper business!

1:13 AM  

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