Posted tagged ‘Google’

Why Google Should Buy the New York Times

June 23, 2008

Well, it seems like this is one of those persistent rumors, although tracking down an actual source of said rumor is difficult. Even Google’s C.E.O. was questioned about it:

[Question:] The New York Times is under pressure to sell. Blogs are abuzz with the idea that Google ought to buy it, because it’s in your interest to keep the quality of journalism high.

[Answer:] I’m not aware of a proposal for us to buy the New York Times, but I’d never rule anything out. So far, we’ve stayed away from buying content. One of the general rules we’ve had is “Don’t own the content; partner with your content company.” First, it’s not our area of expertise. But the more strategic answer is that we’d be picking winners. We’d be disenfranchising a potential new entrant. Our principle is providing all the world’s information.

(emphasis mine).

Now, a few good points are raised. Clearly, as we all realize, the fate of newspapers is a hot topic for debate, partially (mostly?) because it’s a media meta-issue. But, I would claim, there are reasons such a deal could make sense…

1. Google can begin to take a much more integrated path to advertising. Already Google has begun to integrate offline media into it’s suite of products it gives out to track a site’s effectiveness… Now, if Google had an outlet to cross sell print ads and help an end user optimize advertising campaigns across T.V., the Web, and print media … well, sounds like a game changer, no? After that all that’s left are integrating radio, billboards, and maybe skywriting …

2. The New York Times is currently a content creator that distributes its own content. But does it need to be? First of all, the NY Times owns lots of different properties, so their ability to distribute is beyond one print newspaper. Indeed The New York Times itself seems to have the right thoughts as far as leveraging it’s online presence. This seems to show in their results. For example, from their annual report

The Times Company was the 10th largest presence on the Web, with 48.7 million unique visitors in December 2007, up approximately 10% from December 2006. Last year the Company generated a total of $330 million in digital revenues, up 20%, or 22% excluding the additional week in 2006. Digital revenues now account for more than 10% of our total revenues compared with 8% in 2006.

(emphasis mine).

Think about how many companies are deciding, now, whether to put advertising dollars to work with the New York Times or with Google… eliminate the decision! Now some of the $42 billion in print advertising dollars doesn’t have to lose effectiveness as circulation drops, it merely becomes more mobile. The chunk that is going to the New York Times (which has approximately $3 billion in revenue) now goes to Google (and who wants to bet it also grows in size?). Furthermore, Google can easily take a great brand and content creation machine and de-couple it from its historical outlet, namely, dead trees. Dow Jones distributes its content, the one who shall not be named generates content for distribution, so why couldn’t Google open up distribution of the New York Times’ content? It could–as a matter of fact the New York Times does this already, with the New York Times Syndicate. I could find no evidence of the syndication effort contributing significantly to the bottom line in the NYT SEC filings nor in their annual report–seems like this effort could be strengthened as well.

3. The New York Times’ ability to distribute content is a great complement to what Google already offers. Have you ever read the New York Times’ own Open, a blog dedicated to coding done inside the Times? Clearly the Times has a massive infrastructure dedicated to personalization, pushing news out into the world, and solving a number of other technological hurdles. Could Google, perhaps, add a full suite of online publishing applications to it’s Google Apps product? I bet.

4. Google owning the New York Times is good for news and journalism. When you have a deep-pocketed owner whose content distribution business focuses on turning out a quality product, it’s better than having shareholders who focus on being profitable. The problem with a newspaper is that it’s business is the newspaper business–it’s not the core business of the New York Times to sell it’s content and drive up the circulation of the papers with which it competes for subscriptions. If Google, with it’s massive online businesses, can drive it’s profit up by 10% (for one year), when added to the annual profits of the New York Times itself, the acquisition has paid for itself (assuming no premium to the market price). This certainly seems doable, given Google’s phenominal growth so far–and once the synergies begin accelerating Google’s own growth, why tinker with the paper?

So, for all these reasons, it seems like Google can jump into the content creation business the right way. With acquiring a strong web presence, getting a “hook” into other advertising avenues on a massive scale, and even adding to their core competencies, Google is uniquely positioned to modernize how the market thinks about the value of newspaper companies. Indeed, in doing all of this, Google can even advance it’s “Do no evil” motto by supporting pure journalism. All-in-all, the combination of these things seems to be a good case to be made by Google for purchasing the New York Times.

The Post Pipeline: June 12th, 2008

June 12, 2008

Okay folks, I’m not dead. I moved, went for a reunion, and other assorted things. I said before that I wanted to start posting my post ideas… hopefully some of you will enjoy thinking about them while I do. So, without further adieu, the first “post pipeline”

1. Why facebook should buy Yelp — As I think about the problem with facebook monetizing it’s traffic, the issue seems pretty clear. There is no link between social networking and commerce… I’m your friend, great. Now, add something focused and with some commercial application, and you can sell ads better.

2. Why Google should buy the New York Times — This has been rumored, but I came up with it on my own, I promise. Firstly, Google can monetize traffic more effectively. Second, the times has built a very sophisticated content management system. Google can leverage that.

3. A surprise multi-part series. This will essentiall break down something very complex, piece by piece. I hope this will be a great addition to the regular posts I write.

4. The role of ego in finance — This is an important trait that allows bigger, better, and innovative things. It’s an important thing, so it should be discussed. Obviously, there are perils.

5. A series where I argue two sides of one issue. Been batting this one around for a while. So far, the title I have selected is “Devil’s J.D./M.B.A.” … play on advocate and brings business into it. Please help with the title… please!

6. A post on Sovereign Wealth Funds — I’m skeptical this one will materialize. It’s interesting to think about some things relating to SWFs, but this keeps dragging on. We’ll see…

Some interesting things:

A. Consumerist — Go there right now. It’s simply amazing. The personal empowerment and the blunt forced instruments afforded to a consumer looking to help themselves (executive info, B.B.B., consumer protection laws and rights, etc.) are extremely interesting as they have that human drama element and have a “big guy” versus the “little guy.”

B. Concept for Mobile FireFox – Simple and amazingly powerful. Very intuitive. iPhone, are you listening?

Feel the Excitement!

May 16, 2008

Ok, I can prove the 3G Apple iPhone is coming. Here’s how:

First, we look Google trends from 2006, leading up to the actual introduction of the iPhone…

Google Trends data for iPhone in 2006

And now, mentions of the “3G iPhone” over the past twelve months …

3G iPhone mentions and searches from Google Trends

And, just to get a baseline, recent mentions are larger in magnitude (the huge red spike is obviously the actual iPhone introduction) …

See? What more does one need? The move up is even stronger than it was before the first iPhone was inntroduced.

Oh, and there’s plenty of other clues as well…

Confessions of an Internet Denizen (An open letter to Google.)

April 17, 2008

Dear Google,

I think you’re super. You have some incredible applications that you provide for free and that I enjoy very much. You’re not evil. You even love clouds, just like me! We’ve built up enough of a relationship where we can be honest with each other, right? Well, here goes…. I’m not really searching for anything. Yep, it’s true. Let me explain.

When I go to you, Google, I’m not really looking for something. Nope, it’s a myth. At least, I’m not looking in the same sense I’m looking for that missing sock or where I ate dinner that one night–I’m looking for the answer to my question. Certainly it’s been a long enough time that you can stop telling me which pages are most relevant to me, and actually just answer my question. The true power of processing billions web pages should be that you can learn from their content, not just retrieve links in short order.

Think about this, Google, “Why do people go to Wikipedia?” Well, people go there  because they have a singularity of purpose. It’s simple. There is a fact they are “looking up”… very different. When I want to know, “How do I get Windows to stop spitting out a certain error message?” I don’t want to see every instance of someone else asking the same question. Google, I think you should strive to become, not a hub, but an authority.

Perhaps this explains why Yahoo! Answers is so successful. The “money line” even is right in the post I just linked to:

According to [a] Harris survey … 81 percent [of respondents said] that they would look to the Internet for answers if the service was free and 77 percent saying that they would look to the Internet if they knew they would receive instantaneous responses.

See Google? Web 2.0 has focused on turning the Web, one of the front-lines of the internet, into a more social experience. Technology took interactivity to new heights and allowed usable applications to be Web-based. Collaboration and a new experience colored the past five or so years. Web 3.0 is already on the horizon. Taking free-form web content and giving it some kind of structure to make processing easier is the next stage.

Ok, now, I know what you’re thinking, Google. You’re thinking, “Ha! And kill my ad business? If I tell people what they want to know then why would they ever click on a link someone pays to put there?” Well, Google, good point. However, you’re thinking about this all wrong. First, you can still put ads on a site that delivers more specific information (also see Yahoo! Answers). Second, think in two dimensions! If your market share takes a massive leap (by both grabbing a larger percentage of searches and by increasing the usefulness, and thus overall volume, of searches), which an innovative and technically difficult product like I’m describing will certainly facilitate, then you will clearly be able to monetize more traffic.

Google, the natural course of innovation has been showed to you by the ebb and flow of what has taken hold on the Web. Now, all the pieces are aligned. The next step is using the Web as a huge knowledge base. Everyone else is focused on revenue and advertising dollars as the drivers to innovation for search engines. Once the next product comes online, the next evolution in how people use the Web, the competition, still trying to figure out how to perfect the old concept will be left in the dust. Just a thought.

Sincerely,

Dear John Thain


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