Newspapers vs. search engines

The Tribune company’s soon-to-be owner, Sam Zell doesn’t like search engines. From the Washington Post:

In conversations before and after a speech Zell delivered Thursday night at Stanford Law School in Palo Alto, Calif., the billionaire said newspapers could not economically sustain the practice of allowing their articles, photos and other content to be used free by other Internet news aggregators.

“If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?” Zell said during the question period after his speech. “Not very.”

Never mind that Google News is a tiny percentage of Google’s overall traffic. Or that Google News has zero advertising.

Jason Calacanis writes on his blog: “If Sam Zell is the future of the newspaper industry then the newspaper industry is dead–you heard it here first.”

Like many things, this is a symbiotic relationship. Newspapers and Google benefit from each other’s existence. Over the course of a month, I probably visit several dozen newspaper Web sites that I wouldn’t otherwise visit because I can get to them through search.

San Francisco Chronicle columnist David Lazarus expressed opinions similar to Zell’s last month. Among his suggestions is the creation of a consortium to withhold content:

“The answer, I think, is that newspapers have to go further. They have to be prepared to charge for online access to their products just as they charge for print access.

But that won’t be easy.

“I would not want to be the first newspaper to decide to charge,” said Joel Brinkley, a journalism professor at Stanford University and former New York Times reporter. “Readers would run away. Advertisers would run away.”

I agree. For this to work, the entire industry would have to come together and unite in saying that the era of the free online lunch is over.

He also suggests that the newspaper industry lobby Congress for exemptions to antitrust law to allow this to happen. He wants the Drudge Report and Huffington Post to pay licensing fees.

One of the big fallacies of his argument is that he presumes that newspaper content is original. In reality, most papers (especially ones the size of the SF Chronicle) are re-packagers of information.

There is a lot of content in newspapers that comes from third parties: most national and international news stories, many columnists, many travel/auto/feature stories, stock quotes, weather forecasts, TV listings, comics, crossword puzzles. It used to be that the newspaper was the best, cheapest way to get that aggregation of data.

Not anymore.

The creators of a lot of that content have found that they can use the Internet to cut out the middleman.

I spent 5+ years in the online newspaper business. In the early days, we were innovative. At startribune.com, I built one of the first database publishing systems, online MLS listing services and entertainment guides.

Now, most newspaper sites have given up on innovation. washingtonpost.com is a key exception. Knowledge@Wharton has an an in-depth look at washingtonpost.com; well worth the read. As much as I hate the Web 2.0-kitchen sink approach of the new USA Today.com, I have to admire them for trying.

You can read more of my writing on the newspaper business and my prescriptions for change.

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About Rakesh Agrawal

Rakesh Agrawal is CEO of redesign | mobile. Previously, he launched local and mobile products for Microsoft and AOL. His personal blog is at http://blog.agrawals.org and tweets at @rakeshlobster.
This entry was posted in google, media, newspapers, publishing, web 2, web 2.0. Bookmark the permalink.

7 Responses to Newspapers vs. search engines

  1. Lucas says:

    Before dismissing him, consider for a moment that the billionaire has some experience and insight of value. I actually think Sam Zell has a point, and I’ve explained why on my blog.

    What David Lazarus advocates and what Zell supported have little in common. Lazarus misunderstands the economics of the local market. Any newspaper that tries to put up a paid wall will only invigorate new competitors who offer content for free.

    Zell proposes keeping access to the content free but making mass redistributors or the content nationally pay a licensing fee to do so. Two different economic markets.

    One clarification of your post:

    Google News does make money from posting the news. And it does advertise on articles.

    By driving up links to newspaper Web sites, loads of remnant inventory is created on those sites. Since local advertisers have no interest in these one-off page views, then Google convinces these sites to use Google AdSense for filling the remnant space. This isn’t coincidence. Google understands the effect of driving up remnant inventory with Google News.

    All multi-billion dollar companies are in it for the money, Google included. They’re not featuring Google News prominently just to be nice.

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  7. Drew says:

    “If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?” Zell said during the question period after his speech. “Not very.”

    Actually, newspapers already have the power to prevent Google from stealing their content. They choose not to mainly because the reality is that they know that Google sends them far more in search traffic than they could ever get without it.

    So basically, they want companies like Google to pay them extra money on TOP of already providing them, for free, huge chunks of their readership.

    I wonder what would happen if Google started charging newspapers money for showing even regular search results to their sites.

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