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Googling to Newspaper Solvency

May 21, 2009, 21:34 (0 Talkback[s])
(Other stories by Andy Updegrove)

"Well, in fact I'm not. The real causes of newspaper distress are the diversion of ad dollars from print to on-line placements, and a plunge in the rates being paid for those same ads. The latter results in part from the ever-increasing supply of ad-ready Web pages, and the development by Google of technology that allows inexpensive ads to be targeted at the pages most likely to generate sales. That's not the way some newspaper owners and journalists see it, though. They would like to charge Google, and even small "aggregators" like me, for the privilege of driving traffic back to their own ad-bearing Web sites.

"If you think that sounds backwards, you're right. It also explains why Google's revenues are still rising while the Times continues to report substantial losses. What Google realized years ago, but newspapers continue to miss, is the value of enlisting vast numbers of independent site owners (ISOs) as distributors. By creating targeting technology that enables even low-volume products to be cost-effectively advertised via these distributors, Google was able to harness the full power of "long tail" economics to its business model."

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