Would Google Buy NYT?

John Ellis makes the case for Google (GOOG) to buy the New York Times (NYT). In a nutshell:

What’s in it for Google? Well, for one thing, it’s cheap. Sell off the New England properties and the real cost is $3 billion. That’s not much money to buy one of the premier brands of the information age. It also comes with some excellent real estate, which further reduces the risk. And happily enough, it will probably get cheaper in the coming months. So the price is definitely right.

Second, Google is embarking on an ambitious mobile platform. It is buying wireless spectrum and will soon introduce Google Mobile. In so doing, it is entering into an arena where the established players have hired (almost) every lobbyist and (almost) every law firm with expertise in telecommunications in Washington, DC and in virtually every state capital. Owning the New York Times would level that playing field in one fell swoop. Owning major media outlets is a strategy that has worked very well for General Electric, Disney, News Corp., Time Warner and others in their dealing with the federal government and with state governments. There’s every reason to believe it would be helpful to Google.

Third, there’s all that content. Google is a company that could actually make money repurposing the cultural and culinary coverage, to pick just two categories, of the New York Times, across both its Internet and mobile platforms. An acquisition of The New York Times would greatly enhance the richness and reach of Google News. And should Google choose to invest in expanded news and cultural coverage, it could greatly enhance the richness and reach of The New York Times.

Finally, a Google acquisition of the New York Times would allow Kleiner Perkins (which would likely be assigned the task of finding new management for the paper) to attract people of great talent to a fascinating and challenging project: the reinvention of a great newspaper across multiple platforms and within a variety of applications. Even if the project failed, the knowledge gained from the undertaking would make Google a better, smarter, more deft information age company.

Not gonna happen. Google is a technology company. Yahoo! (YHOO) - more of a media company - balked at the concept of buying the Wall Street Journal (DJ) a few years ago, a purchase that would have surely cemented Yahoo!’s place at the top of the perch in finance and business online.

Instead, Yahoo!’s on-again, off-again experimentation with content never produced an acquisition of WSJ parent Dow Jones.

So, does Yahoo!’s past actions suggest Google’s future actions? No, not at all. But while Yahoo! has in fact become a media company with technology roots, Google’s DNA and modus operandi is all about technology.

Technologists and their financiers don’t feel comfortable around content.

Google views itself as an enabler of content, whatever that means. Owning some content would run counter to their mission to organize all of the world wide web’s, I think. I could be wrong, eventually, if they continue to rack up earnings and fail to issue a dividend, there aren’t enough technology companies for them to acquire (proverbially speaking).

I personally think that content is king, and as distribution continues to fragment and become a commodity, content’s value will continue to rise.

It is perhaps for this reason that after a 2007 year that saw VCs invest heavily in video file sharing social networks and video ad networks, you are seeing former media executives (and not VCs) line up and raise hundreds of millions - if not billions - to scoop up content assets. VCs who buy content are exceptions, not the rule. It’s a shame, and their loss. I think their hellbent focus on tech explains their lousy investment record…

Media executives - not devoid of fault either - at least recognize that in an information age, those who own the content will end up building most value. Digital media is awfully like software: all incremental units of consumption are equal to profit, because distribution bears little cost.

It’s only a matter of time for content to rise in value. If the New York Times and Dow Jones of the world would have embraced the digitization of their content from the early days, they would have positioned themselves to be the ones buying the Googles of the world.

But the fear of a digital reality caused them to turtle and demonstrate the bunker mentality that today has tied up most print companies in the ropes.