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Zell-shock! How could new “genius” Tribune owner know so little? 4/6/07

Posted by Steve Boriss in Tribune, Zell.

It is a quote that makes him seem so stunningly ignorant, I am going to assume it was taken out of context. Speaking at Stanford, Sam Zell, the purported financial genius who holds the fate of Los Angeles Times and Chicago Tribune employees in his hands is reported to have said, “If all the newspapers in America did not allow Google to steal their content for nothing, what would Google do, and how profitable would Google be?” Oh, my. Where to begin? News is not fundamental to Google’s business – in fact, Google News is probably not profitable at all. And, only a miniscule amount of Google Search’s content is news. Google’s business model for attracting advertisers is just about the opposite that of news outlets. Google does not provide content of broad interest, like news, to provide advertisers with large audiences, it provides content of narrow interest driven by users’ search terms, to deliver small, optimized audiences. Moreover, newspapers don’t really own much content that requires stealing. As soon as any party breaks a story, it can be more or less repeated by anyone else without the need to pay the news-breaker. And, just about everything available in newspapers is available from someplace else — other media outlets, PR firms, newsmakers’ offices,… even from the AP wire service, which adds insult to injury by collecting membership fees from these papers.


1. Lucas Grindley - 4/7/07

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.

With results from the inevitable court battles, there is no future for any company that makes money off of other people’s content.

One clarification of your post:

Google News does make money from posting the news. It drives up links to newspaper Web sites, creating loads of remnant inventory on those sites. Since local advertisers have no interest in these one-off page views, then Google convinces these to use Google ads to fill the remnant space. This isn’t coincidence. Google understands the effect of driving up remnant inventory with Google News.

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