Hey Google — stop linking to us
Sam Zell — the so-called “vulture capital” investor whose nickname is “The Grave Dancer” — knows a lot about real estate, but does he know anything about newspapers and/or the Internet? Hard to say. But his first statement about the latter, in a story in the Washington Post, doesn’t exactly fill me with confidence. In fact, I think it shows he has a lot left to learn.
Sam has apparently decided to parrot the line taken by a Belgian copyright agency and by the World Newspaper Association, among others, who argue that Google News is “stealing” content from newspapers such as the Chicago Tribune (which Zell just acquired), and needs to be stopped. This simply isn’t true, as I have argued before, including here and here. On the contrary, newspapers get a tremendous benefit from being indexed by Google News, just as websites get a tremendous benefit from being indexed by Google’s search.
In the Q&A session after a speech, Zell drops this incredible bomb:
“If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?” Zell said during the question period after his speech. “Not very.”
Either Zell is trying to be deliberately provocative, or he’s a complete ignoramus. Number one, Google makes virtually nothing from Google News — since the search engine doesn’t sell advertising on any of its news content pages — and number two, even if all the newspaper content from all the major newspapers were removed from the search engine, Google would no doubt still be happily making billions of dollars.
Nice to see that Jason Calacanis agrees with me. He has a rant about Zell here.
Note:
In other Google News-related news, Agence-France Press has signed a deal with Google, after suing the search engine for using its content — a deal that sounds very similar to the one Associated Press signed after launching a similar suit.
No doubt newspapers are hoping for a similar type of outcome, in which Google (presumably) pays them for their content. But Danny Sullivan makes an interesting point about the AP and AFP settlements: much of the traffic that newspapers are geting now will likely dry up, since any hits that used to go to wire stories from AP and AFP will now go to the original posted at Google News, rather than the copies at any AP or AFP member newspapers.
Given the amount of wire copy that most newspapers rely on to fill their website and print editions, that could become a serious Achilles heel.
Update:
Lucas Grindley has posted a comment on my media blog with a link to his blog, where he argues that Mr. Zell might be right, and that newspapers should a) resign from AP if it doesn’t stop providing their content to Google, and b) charge a fee to Google for indexing stories, and force the search engine to provide only headlines instead of the whole first paragraph.
With all due respect to Lucas, his theory about Google News being some Machiavellian effort to increase remnant inventory on newspaper websites so they are forced to use AdSense is ridiculous. Google indexes newspapers and sends readers to their sites — monetizing that traffic is up to them. If they fail, that is hardly Google’s fault.
And holding back news, or charging fees to Google to index newspaper headlines, is equally ridiculous. Does Sam Zell charge the real estate section of the newspaper to list his properties? No, he pays them. Same principle.
Further reading:
More on Zell’s comments from Rex Hammock, Frank Gruber at Somewhat Frank and Doc Searls, and there’s also an excellent and insightful post (as always) from my friend Tony Hung at Deep Jive Interests. Ad Age magazine also has a good look at the issue here, and makes the point that newspapers aren’t like real estate (although they might once have been). And David Olive has a nice opinion piece at the Toronto Star as well — thanks to Tony for pointing that one out to me.
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Getting newspapers de-indexed from Google News is only smart if you presume that people are using Google News INSTEAD of finding you directly.
Rather, I'm sure the reality is that its NOT a zero-sum game, and therefore, because people use both, newspapers should view Google News as a traffic generator, not a traffic sink hole.
t @ dji
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And in any case, removing your paper from the Google News index assumes that people will then find it directly instead -- rather than assuming that they will just never come to your site at all, which I think is probably a lot closer to the truth.
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Sam needs to get a clue!
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Probably depends on the paper. Strong brand, no; weak brand, yes. Kind of thing.
I think Zell's point is probably more that he doesn't want intermediaries in between him and his readers - Google or anyone else - whether they directly profit from it or not. And he probably thinks his brand can handle his distribution. Who knows, maybe; maybe not. But basically he's trying to resist letting Expedia be the reseller.
The issue for Zell isn's whether Google makes $ off of the news page - it's whether people start using Google to find his content, rather than going straight to the Trib's page. Because Google's perfectly happy to introduce his readers to his competition. And because the numbers of his competitors is growing exponentially, the risk to him of Google News being the search tool of choice for his readers is considerable, at least to his content that is commodity content. And I think that's prolly a pretty high %. Which of course is the ultimate issue. Too much of it is commodity content with very many competitive providers. Not a nice place to be.
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And Rob, if it wasn't about the money then why did Zell specifically mention the money?
I realize he and other owners are concerned about competition, and about others getting in between them and their readers, but that particular train has already left the station. All the wishing and lawsuits in the world aren't going to make it come back.
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I think Rob's point is true, but not in this case, so it seems. To me, it seems like Zell thinks Google is a competitor, and doesn't understand what's going on. Exactly as you pointed out Mathew.
We've been seeing a lot of these crazy "old timers" in the news lately, and it won't stop anytime soon as long as they are running companies without having experience in the world of e-commerce.
Look what happened to the judge in the case of the "Porn Pop-Up Teacher". The DA is trying to fold without embarrassing him. And that's exactly what these kinds of cases are: embarrassing!
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If a reader hears about something happening in his or her community and goes to Google to find more about it, then the newspaper's brand is eroded. And, it's Google then who can capitalize on being considered a reliable source for local news. They're already trying to capitalize by providing business directory listings, etc.
Newspapers need to protect their brand more than they need to harvest empty page views from Google. When someone searches on Google, then finds a link to a newspaper, it's Google who gets credit for being the reliable source, not the newspaper. The person is more likely to use Google, not the newspaper. Aren't we trying to increase usage of our sites, not Google's?
Those one-off pages linked from Google aren't of any value to advertisers. They'd rather not be on those pages at all.
So these links do drive up page views? But they're worthless page views that do more damage than anything else.
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And if the clicks that come through are "worthless" page views, then whose fault is that? Google's? And if all people want is a headline and two sentences of a story, are they going to be any more worthwhile a page view if they come to a newspaper's site directly?
As for Google getting the credit for being a reliable source instead of the newspaper, that's similarly absurd -- Google gets credit for being a reliable *source of links,* not a reliable source of information.
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If a person hears about something going on in their community and begins searching for more information about it, Google wants to be their first stop. They want to be the first stop for finding anything. They don't necessarily care about providing news, just answers.
If you can't understand branding, you won't understand my argument.
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"This person is an IDIOT. We're SO SMART! Let's all show how smart we are, how hip and cool and "in" and "get it", by screaming IDIOT IDIOT IDIOT at him. Aren't we so smart?"
How many millions have all the ranters made?
I'd assume he either phrased something poorly, or that *I* was the one who didn't get it, rather than that he's a blithering moron.
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I think if he thought about it more he's realize that the issue is that the intermediary will influence his traffic more than he ever can, unless he provides something truly unique, which I really doubt he can. Unless he goes hyper-local, perhaps, which is itself terribly risky. But the point is that he's in a very crowded content market and his brand is probably never going to be strong enough to allow him to do an end run around the Googles of the world.
Sure Google's great for him because they can send him traffic. But Google *sucks* for him because they can also send that same traffic to every one of his bazillion competitors. They've become the biggest newstand in the world, the shelves are full of competitive product, and Zell has a dying brand.
My point is that he's traded a market where his readers *had* to come to his paper for content like his, because the geographical limitations of newspaper distribution gave him a content near-monopoly, to one where they can get that content anywhere, and to help them sift through the near-infinite choices use finding tools - over which he has no control - to find relevant content. He's competing across geography, across media and across the pro/am boundary. Yikes. There's not a damned thing he or anyone else can do about that, of course. There's just too much content like his out there. And the other big dogs in content would love to see him yank his content because that would mean one less competitor.
I suspect that what we're going to see is traffic moving to a long tail kind of distribution - there will be *very* few very big dogs, like the NYT say, and very many very smaller dogs who serve very specific niches. And Zell has bought in near but not at the top. He has to either be right at the head of the distribution, or he will get blown away as his traffic is dispersed to its tail.
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And Rob, I think you are totally right about the situation Zell and other papers are in. But I don't think the brand is dying unless he lets it die -- and I think trying to build walls around content, or trying to pull a King Canute and roll back the tide, is a recipe for disaster.
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That is, as a matter of probability, I would assume there was an idea that was either being garbled or wasn't apparent to me, rather than this guy who seems to have expertise in the topic just spent a zillion dollars on a transaction where he lacked the most basic understanding.
While not an absolute guarantee, such an assumption is a good bet.
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And so what if Google News introduces Zell's readers to competition? If those readers are leaving Zell's papers for other news outlets, then that's Zell's problem. Innovate, hire better writers, produce better content, and win those readers back. That's the beauty of competition.
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Just because someone is a successful businessman in one sector (in Zell's case, real estate), doesn't necessarily mean any of the following:
- He's smart
- He's honest
- He can speak intelligently on all business issues
- He can make good business decisions in other sectors
That's like saying, hey, this guy is a superb swimmer. Let's have him on our baseball team! Or let's have him be a baseball commentator on TV. Oops. ("But hey, he's an exceptional award-winning athlete... how could he be wrong about another sport?!")
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RIAA. MPAA.
Organizations comprised of multi-billion-dollar and (at least formerly) successful businesses. Current (much deserved) verdict?: Morons.