Why Google Likes to Use the Newspaper Bailout Card

 |  Includes: GHC, GOOG, MNI, NYT
by: Ashkan Karbasfrooshan

Google’s (NASDAQ:GOOG) (and Craigslist’s) assault on the newspapers’ monopolistic revenue streams can be described as nothing less than a barrage of whacks by a multitude of sticks. Sure, it’s not that Google and Craigslist should be blamed for newspapers accelerated slide into obsolescence - they really only have themselves to blame for that - but the fact that Google and Craigslist have developed such profitable - and more efficient - ventures doesn’t help.

If that market assault represents the stick, then the lure that one day Google might buy newspapers - only to say it won’t - is no doubt the carrot, so to speak.

While newspaper executives like to occasionally get up and say some rather novel things about the way online media, publishing and advertising works, and in fact, threaten Google with lawsuits, they do love to think that Google.com is in fact Google.org and will one day buy them out or offer their wretched industry some kind of remedy.

Memo to newspaper executives and owner families: stop dreaming.

I just finished reading biographies on Rupert Murdoch and William Hearst, two of the more formidable entrepreneurs and businessmen in the history of media and publishing, and allow me to paraphrase Warren Buffett:

If Mr Guttenberg had come up with the internet instead of movable type back in the late 15th century and for 400 years we had used the internet for news and all types of entertainment and all kinds of everything else and I came along one day and said I have got this wonderful idea we are going to chop down some trees up in Canada and ship them to a paper mill which will cost us a fortune to run through and deliver newsprint and then we’ll ship that down to some newspaper and we’ll have a whole bunch of people staying up all night writing up things and then we’ll send a bunch of kids out the next day all over town delivering this thing and we are going to really wipe out the internet with this… it ain’t going to happen.

In other words, if Messers Murdoch and Hearst wanted to started a successful publishing venture today, they would be venturing into print, would they? So why on earth would Google - who wants nothing of content let alone print content - do something so backwards.

Google is wisely using this trump card as a “step off” measure so that newspaper executives don’t push their friends in politics to harm Google at newspapers’ expense.