The Economist and Its Wobbly Approach to Online Revenue
November 27, 2009
I know that I have to separate the editorial from the advertising parts of the magazine world. The notion of the Chinese wall and genteel competition in which rivals say things like “tally ho, chum” and “well done, my word, well done” are long gone. The problem I have is that this online business is changing the children of the people who write about online revenue. The two worlds could not be more different. The “adults” want to hold on to the traditional business models. I can hear most of the Economist writers, after a dollop of malt singing, “Tradition.” Meanwhile the children do what they do to get music, videos, software, information, and news their way. I am waiting for a sitcom that shows traditional journalists at work and then at home with their children. At work, these folks write “real” news. At home, their progeny get what they need from their iPhone or computer happily oblivious that their parents’ world is about to implode.
I see this tension in “Web-Wide War.” The write up mentions a larger-than-life Web savant and then with all-knowing confidence concludes that Microsoft’s play to pay content to producers to keep content off Google won’t work. Right conclusion; arrived at the wrong way.
The realties are:
- Demographics are on Google’s side. Traditional news delivered on a little used service is not where the demographic’s collective head is at
- Google has traffic. Bing.com does not have traffic. Traditional content will not close the gap between Microsoft and Google. What it will do is encourage Google to release some of its informational potential energy. No additional cost for the GOOG and lots of excitement for the folks in the canyon below the cliffs.
- The cost to the media companies is going to be too much. Microsoft might pay through the nose for a year, but what happens when “Google’s thousand cuts” strategy bleeds revenues from Microsoft’s two big money product lines? What happens when the Google cash stops rolling in? Money talks.
To sum up, I think this is classic old school analysis. Enjoyable. I wonder what big rocks will push on the trudging publishers on the dirt road below. Wait. I hear the whistling now.
Stephen Arnold, November 27, 2009
Disclosure: I thought someone would pay me to write this article, but I was wrong. I cannot be correct. I used to work for traditional publishers. Oh, wait. I was involved in electronic products. Successful electronic products. I avoid dirt paths in valleys where Googlers play Foosball until it’s time to drop a rock on those below.
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