Google Realizes Its Future Doesn't Include Print Media

Google (GOOG) is making an about face. After a recent bid to begin selling print ads along with its online advertising, it has announced that it is leaving the print business to focus on its core strengths. We are generally in favor of companies trying new things and experimenting with expansion ideas, but this attempt was stupid on its face. The access to information that Google has helped foster on the internet has condemned America's newspaper industry to death row. Why in the world Google thought it should try to make a go in the very media that it was in the process of replacing is beyond us.

In a January 20th announcement, Google said that it will cease selling print ads at the end of February. The company admitted that the effort never really gained any traction and did not meet company goals. That outcome should have been obvious even before the decision to enter the business. In a recent post we talked about the eminent demise of the New York Times and cited the proliferation of the internet as the go to source for information as the proximate cause of that decline. It was Google's success in its core business that doomed this late attempt to expand into print.

Google has been a pioneer and likely will continue to innovate. We'll forgive it for a bad decision this time. Meanwhile, though the company is laying off 100 workers as the recession forces the company to take a hard look at its expenses. The San Francisco Chronicle reported last week that Google earns 97% of its total revenue through advertising. CNN Money advises that a report from search engine marketing giant Efficient Frontier shows an 8% decline in overall search engine spending during the final three months of 2008 versus the same period in 2007. That trend is not likely to reverse itself for the next two quarters, placing Google's income under some strain. Although still expected to run a substantial profit for 2009, most experts have slashed expectations for the Google's profit outlook for the coming year.

Disclosure: No position.