Why Publishers Don’t See Google As A Friend

April 12, 2009
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The raging battle between publishers–particularly the newspapers–and Google has been so overplayed lately that I’m tempted to stop blogging about it until something actually happens beyond the war of words. Still, I recently read two paragraphs, in my view, neatly summarize the terms of conflict, and I felt compelled to share them.

The first is from Nick Carr, someone I rarely agree with but who in this case strikes me as spot-on:

What Google doesn’t mention is that the billions of clicks and the millions of ad dollars are so fragmented among so many thousands of sites that no one site earns enough to have a decent online business. Where the real money ends up is at the one point in the system where traffic is concentrated: the Google search engine. Google’s overriding interest is to (a) maximize the amount and velocity of the traffic flowing through the web and (b) ensure that as large a percentage of that traffic as possible goes through its search engine and is exposed to its ads.

The second is from Scott Karp, who actually cited the above paragraph in his own post:

Those who argue that Google is a friend to content owners because it sends them traffic overloo

The raging battle between publishers–particularly the newspapers–and Google has been so overplayed lately that I’m tempted to stop blogging about it until something actually happens beyond the war of words. Still, I recently read two paragraphs, in my view, neatly summarize the terms of conflict, and I felt compelled to share them.

The first is from Nick Carr, someone I rarely agree with but who in this case strikes me as spot-on:

What Google doesn’t mention is that the billions of clicks and the millions of ad dollars are so fragmented among so many thousands of sites that no one site earns enough to have a decent online business. Where the real money ends up is at the one point in the system where traffic is concentrated: the Google search engine. Google’s overriding interest is to (a) maximize the amount and velocity of the traffic flowing through the web and (b) ensure that as large a percentage of that traffic as possible goes through its search engine and is exposed to its ads.

The second is from Scott Karp, who actually cited the above paragraph in his own post:

Those who argue that Google is a friend to content owners because it sends them traffic overlook the basic law of supply and demand. The value of “traffic” is entirely relative. The more content there is on the web, the less value that content has — because of the surfeit of ad inventory and abundance of free alternatives to paid content — and thus the less value “traffic” has.

There is no doubt that Google is sending lots of traffic to publishers. The problem is that Google has also helped devalue that content, while at the same time taking a plum spot in the value chain. As I’ve said repeatedly,  publishers are complicit in their own malaise–in particular, they collectively made the choice to give Google so much leverage over them. Now, of course, they’re trying to renegotiate their relationship, the derision of the blogosphere notwithstanding.

But, as Carr points out (I’m agreeing with him again!):

When it comes to Google and other aggregators, newspapers face a sort of prisoners’ dilemma. If one of them escapes, their competitors will pick up the traffic they lose. But if all of them stay, none of them will ever get enough traffic to make sufficient money. So they all stay in the prison, occasionally yelling insults at their jailer through the bars on the door.

Critics like Jeff Jarvis contend that newspapers are trying to restore an economy of scarcity when they should be embracing an economy of abundance. But attention is a scarce resource, and nothing Google does can change that. Rather, Google played has brilliantly into this scarcity economy and seized consumers’ attention from the publishers, while pitting them against one another by facilitating their commoditization. Google may not be evil, but surely Machiavelli would be proud of this strategy.

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