So The New York Times Company is now worth less than it paid for the disastrous Boston Globe. It has cut its dividend to save cash, which – PR protestations aside – could lead to a family revolt, a la Wall Street Journal, LA Times, and Orange County Register.
The Times Company – just like GM – has to undergo a radical restructuring and fast. That’s heresy in both cases. Both are Institutions. They were presumed to be immutable and eternal, even holy. They’re not.
In the current credit market, taking the company private – though cheap at $900 million market cap plus existing debt – is difficult if not unlikely. Sale? Simon Cast has wondered whether Guardian Media Group – backed by the Scott Trust – should buy The Times Company. I fear that the ballast of The Times could bring down the good ship Guardian. Selling off assets? Not now. There is no white knight.
The Times is indeed a national treasure and a national necessity. As local media become more local, we will have only The Times covering the nation and the world with the Washington Post covering the nation, mostly, and the Wall Street Journal vying to compete. Look at London, where the Guardian, the Times, and the Telegraph, at the high end, compete to cover the world. Three quality national papers do the job well. Germany, France, and other nations also depend on national papers. I have confidence that our three papers could do the job. The Brits are lucky to also have the BBC; CNN has pretensions to fulfill its role here and elsewhere but it’s more a pretender; our broadcast network news operations are weak tea. No, we need The Times.
So how would you restructure it? (Please spare us the kneejerk kicks to The Times’ groin. We’ve heard them all.)
In March – when it would have been easier to sell assets and accomplish change – I made my suggestions for restructuring:
I’d spin off New York metro as a separate product and turn The Times into a national – and international – service and brand purely. The metro product would have a big staff, a small audience in the city, and thus a difficult P&L, but this shift would take much of the staff cost of the newsroom off the books of the national product and let it focus is work. The three national papers should compete for links – even share revenue for them – in a reverse syndication model. In addition, I’d create curated content and ad networks independent sites (it has a start in its relationship with Freakonomics); The Times or Post or Journal could build the high-quality Glam of news. The Times newsroom should be rebuilt from zero for its new structure, emphasizing national coverage and digital. The Globe should be drastically restructured, sloughing off its print and distribution businesses. I’d now say it should make the leap and shift completely online. That is, turn off the presses. In March, I said they should sell other assets. Too late now.
But that probably doesn’t go far enough. How would you rethink The Times?
Come see Brian Storm, proprietor of the much-loved MediaStorm at CUNY’s Graduate School of Journalism tomorrow, Thursday, starting at 6:30. It’s open to the public but space is limited, so sign up here.
Good on Richard Perez-Pena for reporting on new sites doing strong local reporting and investigations — and good on The New York Times for playing it on page one: “As America’s newspapers shrink and shed staff, and broadcast news outlets sink in the ratings, a new kind of Web-based news operation has arisen in several cities, forcing the papers to follow the stories they uncover.”
OK, so there was one reflexive snipe at the internet: “Their news coverage and hard-digging investigative reporting stand out in an Internet landscape long dominated by partisan commentary, gossip, vitriol and citizen journalism posted by unpaid amateurs.” Yeah, yeah, yeah.
What Perez-Pena’s story makes clear is that there are new models for creating reporting, that there is a demand for that reporting, and that there are journalists who will do it.
The business angle bears further investigation — and we’ll do that at the CUNY New Business Models for News Project (finishing a MacArthur Grant and starting on a new McCormick Foundation grant).
Perez-Pena says that “publishing online means operating at half the cost of a comparable printed paper, but online advertising is not robust enough to sustain a newsroom.” Actually, the cost is way less than half; I refer you to Edward Roussel’s chart from the New Business Models for News summit.
Revenue is also way less than half — and much or all of that is coming from contributions in the sites Perez-Pena profiles — but it’s also important to measure how much is spent on such reporting from big organizations today — how much are we trying to replace (or increase!) — and how this fits into a bigger ecosystem of local news, the new press-sphere.
News will not come from one organization anymore. It will come from a collection of organizations, networks, individuals, companies, technologies, and collaborative projects each operating under different business models. What Perez-Pena profiles is a slice of the new news pie. It will take other slices from other players to add up to a whole.
Still, the recognition by the Gray Lady of these new girls in town is an important moment in the evolution of news.
It’s barely worth dignifying with a link but Howard Witt writes a letter to Romenesko wondering whether, Mark Cuban has been brought up on insider-trading charges, his Sharesleuth.com would cover the news. Witt uses this as an opportunity to dismiss any value from all bloggers: “I’d say this is yet another example of why the nation cannot possibly expect to rely on all these pseudo-journalistic blogs that are supposed to become the future of journalism when all the newspapers disappear.” Oh, jeesh. OK, you play the Cuban card. I’ll see you with a Jayson Blair and raise you with a Judith Miller.
I was with David Carr until he got to the classical music critic.
Using Circuit City’s ill-fated decision to get rid of its veteran clerks as a metaphor, Carr laments newspapers getting rid of their experienced talent. Kicks to my groin aside, I’ve also lamented that. I’ve argued that when newspapers offer buyouts – and when it’s often the best and the most experienced who choose, often wisely, to take them – they should at least offer to help set up these journalists as independent agents with blogs and ad networks (which I’m seeing happen in one market; more on that later). But I’ve also argued that newspapers must focus on their key value and can no longer afford ego and commodified news.
So when Carr takes on the Tampa Tribune for laying off its editorial page editor, a columnist, the movie critic, and the classical music critic, he loses me. Of course – regardless of what the groin-kickers say – I have sympathy for those jobless journalists, just as I will for the GM SUV assembly-line workers sure to lose their work and even a few of the Lehman Brothers veterans.
But if newspapers are to survive as news organizations, they must focus on their key value and fast. And the key value of a local newspaper is, on its face, local reporting. Says Carr:
But there is a business argument to be made here. Having missed the implications of the Web and allowed both their content and their audience to be scraped away by aggregators and ad networks, newspapers are now working furiously to maintain audience, build new ad models and renovate presentation. But they won’t stay relevant to readers with generic content ginned up by newbies with no background in the communities they serve.
Well, my first quibble is that aggregators are sending them traffic and ad networks are sending them revenue, if they want. My second is that movie reviews are pretty much generic content unless your name is Ebert.
I’ve argued that newspapers should have spent these last five years retraining all these people to take on new-media skills, inventing and promoting new products, and focusing intensively on local value. Then, perhaps, they might have been in control of their fates. They didn’t. Now they’re in a crisis.
When a bunch of newspaper executives gathered last week – behind closed doors – to recognize their crisis, they said the might get together again in six months. Steve Outing asks whether they have six months.
My Guardian column this week argues that we’re witnessing not just the collapse of the financial (and auto and newspaper…) industries but the birth of a new economy best seen through – you guessed it – the lens of Google:
The financial crisis might be damaging countless companies around the world, but last month Google announced another quarter of growth, with profit up 26%. When it reported similar results two quarters before, The New York Times’ headline proclaimed, “Google defies economy.” It should have read, “Google defines economy.”
In this crisis, we are witnessing more than the failure of mortgages, derivatives, banks, and regulation. We are also seeing the dawn of a new economy; one best viewed and understood through the lens of Google, the one company that – by design or by luck – is built for the emerging world order.
Google’s first advantage is being digital. Who wants to be in the business of stuff any more – building cars, printing newspapers, selling CDs, growing food? Owning and controlling stuff was the basis of most business. And the reflexive response to a collapse in finance and equities used to be to return to the real: buy property. No more. Now the best retreat is to the value of knowledge.
In a sense, Google itself is built on a derivative: its data on data. Like the derivatives that got us into this mess, Google’s are based on creating abundance. But unlike those corrupted financial products, Google’s metaknowledge creates new and real value.
In Google’s economy, small is the new big. Of course, big is still big — Google itself is gargantuan. But it doesn’t grow by borrowing capital to buy companies (likely no one will for some time to come). Instead, Google created a network for an abundance of new advertisers and a platform for countless new businesses, all independent of Google. Indeed, Google does not want to own the assets — content to commerce — upon which its empire is built.
To succeed like Google, companies will build networks and platforms as it does. eBay’s platform enables thousands of merchants to sell more than America’s largest department-store chain, Federated. In Google’s era, the mass market is replaced by a mass of niches. So by continuing to track and measure only the biggest businesses — as the FTSE, the Dow Jones Average, and Nielsen ratings do — we miss sight of the small economy.
Another hallmark of Google’s economy is transparency. Even as Google remains opaque about details of how it does business — its ad commission, for example — it demands transparency of the rest of us. For without openness, we get no search-engine optimization, no precious Googlejuice. Regulators, customers, and citizens, too, surely will demand more transparency in business now that we have been so badly burned by secrets hidden in what are now glibly called toxic assets. Online, the truth is often just a link away.
This link economy that is the real basis of Google’s success, can also bring business benefits for other industries. Struggling and rapidly shrinking newspapers can now specialize—a local paper becomes more local and links to national coverage. Do what you do best and link to the rest, I tell editors.
Marketers are also beginning to learn that with direct links and relationships with customers, they may reduce ad spending. But relationships between companies and customers must be built on trust, and trust comes from handing over control. David Weinberger, author of Everything’s Miscellaneous, puts it this way: “There is an inverse relationship between control and trust.” Post-meltdown, the public will demand control — the internet and Google provide tools they will use to seize it.
Trust itself is becoming the basis for new business. eBay’s systems enable customers to anoint merchants with trust; Amazon demonstrates that we trust the opinions of fellow customers over critics; PayPal and Prosper help us make trusted transactions; Google knows which sites we trust with our links and clicks. We don’t trust banks anymore; hell, they don’t trust each other. In Google we trust.
Google manifests the business of trust in its famous decree, “don’t be evil.” Etch that over doors on Wall Street. If enough people had asked whether getting and issuing toxic mortgages, and making and selling toxic assets was evil — instead of someone else’s problem — I wonder whether we’d be in this mess. Our meltdown was not inevitable. But the transition to a Google economy is.
Craig Stoltz does a masterful job summarizing the Farhi-Jarvis-Rosenbaum fest in six Twitter-sized bites. His 2 cents at the end: “Blame doesn’t matter. Journalists unwilling to think and work differently to save the profession should take the next buyout.” Couldn’t have said it better myself.
Tuesday night, I’m joining in an NPR Intelligence Squared debate – Oxford format – on the motion, Google violates its “don’t be evil” motto. I’m speaking against – surprise, surprise. Esther Dyson and and Jim Harper of CATO are on my side; on the other are Siva Vaidhyanathan of the University of Virginia (who’s also writing a book on Google), Randal C. Picker of the University of Chicago, and Harry Lewis of Harvard. Gulp. (The debate will be aired later. They’re charging $40 for tickets to the live event.)
Here are draft notes on my opening. I’m writing it out but will treat this more as an outline. As always, I would be grateful for your thoughts.
My opponents have a high bar to get over. Google should be presumed virtuous until proven evil. Just because it could be evil does not mean it is. Just being big and powerful does not make it evil. In this country, we tend to value success until one becomes too successful, and then we become suspicious. How much success is too much? That is our problem, not Google’s. No, my opponents must bring the evidence of Google’s misdeeds to prove their case. I don’t envy them.
I grant that Google could be better.
* In China and in other nations where free speech is attacked, Google should use its power and influence – which are greater than even it seems to know – to refuse to issue censored search results. I wonder whether the risk of life without Google could lead to revolution. But in its defense, Google argues that a hampered internet is better for the Chinese than no internet at all.
* I also wish that Google were more transparent about the business arrangement in its ad networks. Google demands transparency from the rest of us – if we want Googlejuice – but it is too often opaque itself. But opaqueness has long been standard procedure in business.
Evil? No.
Leavening the impression of – or fear of – evil is Google’s virtue. Google does good. Our world is a better place because of Google. Consider:
* Google has opened up the world’s digital knowledge to everyone. We can answer any question, satisfy any curiosity, fix any error of fact in the blink of an eye. I wanted to know just how fast that is, so I asked Google how fast an eye blinks and in .3 seconds it told me that a blink takes .3 seconds.
* Google respects the wisdom of the crowd – that is the essence of the PageRank that determines which search results are most relevant. Google also enables us to recapture our wisdom, as it does with its analysis of flu trends based on our searches for related words.
* Google connects people. Young people today will never lose touch and I hope that will lead to better friendships and better behavior.
* Google’s ads are helping to support the creation of the next generation of content. I made $4,500 in Google ads on my blog, Buzzmachine, last year. Granted, I shouldn’t have quit my day job but Google made my blog profitable.
* Edward Roussel, digital head of the Telegraph in London, has argued that declining newspapers should consider handing over the work of technology, distribution, and ad sales to Google so they could become efficient and profitable and do what they do best: journalism.
* Google created platforms on which others can create products, companies, jobs, value, and wealth. About.com, Platial.com, Outside.in, EveryBlock.com exist only because Google made them possible. With Google’s ads, maps, hosting, services, and promotion, new creations bloom.
* Google shows us the way to a new economy that will be built out of the wreckage of the financial crisis. No longer will companies grow to critical mass by borrowing huge amounts of capital to make huge acquisitions. In the Google age, they will grow by creating networks on platforms. We have much to learn from Google’s ways.
One might say that its vow not to do evil is the height of hubris. Google is undeniably arrogant. But its executives say the evil motto is valuable inside the company because it allows any employee to question any decision. It’s not a bad rule. Indeed, I wish Google’s covenant had been chiseled over many a door on Wall Street. If only, in the poisoned process that led to the financial crisis, enough people had asked whether seeking and issuing toxic mortgages and making and selling toxic assets were evil—instead of someone else’s problem—I wonder whether we’d have reached this nadir.
As we try to understand and navigate a new world built on links, connectedness, networks, openness, transparency, publicness, trust, generosity, efficiency, niches, platforms, speed, and abundance, we would do well to ask ourselves, what would Google do? Google is not evil. Google is an example to us all.
The Obama administration has named two of the greatest brains online to its FCC review team: Susan Crawford and Kevin Werbach. And there are few agencies that need review so badly. Bravo!
I can’t wait to get the Google iPhone app that answers questions asked by voice:
Tim O’Reilly called this one a year and a half ago, I think, when he said that GOOG-411’s core purpose or fringe benefit was that Google would harvest our voice samples and out of them create the best voice recognition online. Now Google can answer any question we ask (we’ll see how well it works sometime today).
This is about mobile, of course. Eric Schmidt told Jim Cramer a few weeks ago that in the future, Google will make more from mobile than from the web because it is a better targeting opportunity and targeting — relevance — is Google’s real business. This is also about the next real operating system of the internet. Microsoft has its voice-recognition software, of course, but Word isn’t where this battle will be fought. The sidewalk is the place.
Out of the dire need to cut back, news organizations are at last looking out and forming networks. Newspapers in Ft. Worth and Dallas are going to share news. Newspapers in Ohio have been doing that. Now TV stations in Philadelphia are setting up a separate company to make video.
It’s a start on a model that I think will be important in the regeneration of the news industry. And it’s a short step from sharing with fellow news organizations to sharing with independent agents in the public (starting with your own former employees who set up blogs and then working with blogfers).
Sharing will replace syndication, I think. That’s why I’m not confident in the success of CNN’s effort to set up a new wire service to compete with the AP, Reuters, and AFP. It might work for international coverage because it’s hard to share content with a source in another language and there’s a vastly different base of shared knowledge. But domestically and locally, I think that sharing and reversesyndication (a la Political) will win the day.
