WSJ Editor Claims Google Devalues Everything
from the no-wonder-no-one-uses-it dept
This has been clueless newspaper guy month around here, and it's kept up with the appearance of Walter Isaacson (yet again), Mort Zuckerman (owner/publisher of both the NY Daily News and US News & World Reports) and Robert Thomson (managing editor of The Wall Street Journal) on the Charlie Rose program, where they spend plenty of time whining about the way things used to be and why people have to start paying -- but never touch on any reason why people should want to pay. Still... that's a dead horse at this point. Instead, I wanted to focus on the rather stunning claim from Thomson concerning Google:But one of the -- Google -- I mean, the harsh way of just defining it, Google devalues everything it touches. Google is great for Google, but it's terrible for content providers, because it divides that content quantitatively rather than qualitatively. And if you are going to get people to pay for content, you have to encourage them to make qualitative decisions about that content.This is wrong on so many levels it's hard to know where to begin. Google doesn't devalue things it touches. It increases their value by making them easier to find and access. Google increases your audience as a content creator, which is the most important asset you have. It takes a special kind of cluelessness to claim that something that increases your biggest asset "devalues" your business. Thomson's mistake seems to be that he's confusing "price" and "value" which is a bit scary for the managing editor of a business publication. Yes, the widespread availability of news may push down the price (that's just supply and demand), but it doesn't decrease the value at all. It opens up more opportunities to capture that value.
As a content publisher, I can say, definitively, that Thomson is completely off base if he thinks Google is terrible for content providers. Google has been a huge help to us because it has helped us build our audience and our community -- which is the biggest asset we have. Thomson's mistake seems to be that he thinks the asset of publishers is the content. It's not. It's the community. It's the community. It's the community. Sorry for the repetition, but it doesn't seem to be getting through.
He's also wrong if he thinks Google divides content "quantitatively." Google's ranking mechanism is the exact opposite. It works out ways to measure the value of content at a qualitative level -- pushing the best content up. If the WSJ is afraid to compete with other content providers, you can understand why they'd be afraid -- but if they truly believe they have good content, that content will rise to the top (of course, the WSJ is harmed by its practice of making that content harder to read).
Finally, he's very wrong that the key to getting people to pay is to have them "make qualitative decisions about that content." If they've reached that stage, they're not paying. The value of the web and Google is that it lets people look at many sources and compare and contrast them qualitatively. Putting up a paywall is what devalues the content. It makes it harder to access and makes it a lot less useful. People today want to share the news and spread the news and discuss the news with others. As a publisher, your biggest distributors should be your community. And what does the WSJ want to do? Stop the community from promoting them. I can't think of anything that devalues their content more.
In that one paragraph, Thomson seems to be wrong on every single point. Is there a way to short the Wall Street Journal? It's really stunning that these newspaper guys (Isaacson goes on to agree with Thomson) can be handed the greatest mechanism for building their audience and adding value to their sites, and they whine about how it devalues them. It's the horse carriage company owners complaining about how automobiles destroy the value of a beautiful horse drawn carriage. Guys: you're looking in the wrong direction. Turn around and look forward at all that opportunity.
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Filed Under: economics, journalism, news, price, value
Companies: google, wall street journal
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I think what the editor is saying is that all of a sudden, WSJ articles are shown side-by-side with Joe Blow's blog entry on the same topic.
This is true.
And the fact is, google can be gamed to push certain content higher.
But another fact, one painful for guys like the WSJ, is that a lot of times, Joe Blow's blog is often as good as or better than what WSJ offers.
Anyway, the WSJ guy isn't completely right...but he's not completely wrong either.
No, it works, in part, based on how often content is back-linked from other pages. Sometimes this is a good measure of quality. Sometimes it's not. But it's definitely "quantitative".
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ROBOT.TXT
What WSJ is really saying is they are having a hard time COMPETING now that the economics have changed.
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just let it die
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I disagree with this statement. Google's mechanisms measure quantities. Michael seems to be claiming that quality == what the most people like the best, which is entirely in keeping with his "let the invisible hand make all the decisions" philosophy. But that is an unfortunately narrow concept of value, and I'd hate to live in a world governed by that. The WSJ's market, on the other hand, tends to consist of people willing to pay more for specialized content.
I also disagree with Thompson's statement, but at the very least he is correct that Google and similar information engines have radically altered the way that content is valued. A consequence of this is that some information that is of high (but not critical) value to a small number of people is going to going to have more trouble finding a home. Maybe not a tragedy, but we won't know all the consequences for some years at this point.
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So -- who will pay for the news?
Is techdirt -- or anyone else -- ready to start a serious online pub tomorrow and take on the likes of the WSJ or Times? If not, why not?
Mike, VC's utter lack of interest in what you claim is so easy disposes of the argument.
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WTF??????
It seems these so-called "journalists" are giving the rest of us less incentive to read their crap rather than value "good ol' fashioned" reasons to want to read.
Way to go, WSJ! You just screwed up! Please pay US $53/year for having to endure your load of biased, unprofessional "journalism" crap.
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backwards
In the past, you could only judge quality an entire publication at a time, and therefore anyone interested in quality was forced to follow an entire publication or not. Pieces of lower quality included with a publication would have to accepted along with the "normal" higher quality a user expected from the publication.
Now, users can pick and choose quality pieces from anywhere. They don't have to suffer through filler stories they aren't interested in just to get at a few choice morsels. There is enough content of high quality to go around.
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Re: So -- who will pay for the news?
Heh. Nice caveats. There are a ton of new startups that are getting into the business. There may not be huge success stories yet, but it's a fallacy to think that they can't be a success. Read some Clayton Christensen and stop ignoring what's happening.
Is techdirt -- or anyone else -- ready to start a serious online pub tomorrow and take on the likes of the WSJ or Times? If not, why not?
I'm offended. You think we're not a serious online pub?
We're focused on our existing business, but if a good opportunity presents itself, we'd be very interested in jumping into the game. But, you've of course misdefined the market. It's not the market for "providing news."
Mike, VC's utter lack of interest in what you claim is so easy disposes of the argument.
No offense, but that's one of the most ridiculous statements I've heard. Because a VC won't fund something (which is wrong by the way, I know a few VCs who are very interested in this field) it means the business is a dumb idea?
Not every business needs VC money. And VCs don't have a good history of seeing trends ahead of time.
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Re:
Certainly quantity isn't a reflection of value. However, I think Michael's point is that value comes from a qualitative improvement over other means of information. If the WSJ's news is little more than what else is out there for free then why should anyone pay for their content? Google has shown that revenue can be had from other means than an upfront charge, such as advertizing and other promotional services. The growth of the community will ultimately create financial value.
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Creating value
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I agree, and I am a fan of this model of value creation. My point is a little different. Regardless of whether or not the WSJ deserves to go under, I'm saying that in general, Google ranks things by looking at the evaluative judgments of a lot of people, which is fundamentally a quantitative measure of value. If that results in better reporting and more accurate news (and more intelligent opinion pieces), those are good side effects, but Google does not have an algorithm to measure those attributes. They are simply what we hope will be a consequence of a new model of value creation.
I guess the more succinct way of making my point is this: Mike correctly calls Thompson on conflating price with value. I'm calling Mike on conflating value with quality.
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OK so where are the successes
Ok, you don't like my VC analogy. that's a fair objection. I would still say investors aren't funding, whoever they are as far as I see.
But I could be wrong. If you know of such an outlet, you should tell the world. Seriously. Journalism -- original content -- is dying at a frightening pace. Who will provide it in the future? Google is just repackaging untold numbers of articles from dying pubs.
At some point they will all be gone unless we find a better way to fund journalism.
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Re: OK so where are the successes
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Another way it "devalues" content is by removing "personal bias". As an example I remember an article someone posted in a group I was in about a program that was being run under Bush, and about how it was violating people's personal rights. The problem? I'd seen a similar article a few days earlier (that I in turn posted) that contained several points the first article left out (mainly that while the program had been expanded - quite liberally - under Bush, it had actually been implemented under the Clinton administration.. something Bush hater clearly wanted people to ignore or overlook). When it becomes so easy to present counter arguments, or discover omissions of fact to push a specific agenda, the point of view your trying to push becomes "devalued".
Newspapers, like politicians and religion, don't like freedom of information, because such means you know longer need them to do your thinking for you (which is where they *really* derive their value, convincing you to let them do your thinking for you).
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Re: OK so where are the successes
John,
You make a good point. Mike and team essentially do long term reporting, but as part of his consulting practice where that research is paid for by a specific client. I doubt we want to move toward a model where the NYTimes is doing investigative journalism on behalf of Exxon...so, what works for some types of media companies is probably not what we want from all.
As I wrote the other day. in response to a similar story by Mike, I think we in the Internet industry need to stop pretending like we have all the content industry's problems. Simply getting newspapers to focus on "community" isn't really an answer. Twitter and Facebook have enormous communities, but both are STILL struggling to find long term business models.
Thomson acknowledged he was being a bit hyperbolic (something Mike should appreciate) in his assessment of Google, but it isn't like he was completely wrong. Google is a double-edged sword for content creators. It may help them grow the "community" around their content, but then they are left with same problem the rest of the online content and service industry now has: how do we monetize that "community" in a way that actually pay for the creation of the content. And is sustainable once the VCs stop throwing good money after bad...
If we're honest with ourselves, we'll admit that we don't have all the answers.
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The news people are starting to sound like the record industry
There certainly are many ways in which the Internet and Google have made the old news paradigm less profitable and new organizations seem to be having legitimate challenges with figuring out how capitalize on the new information age, but it seems that Thompson is completely missing the point if his response is anything other than to actually do his job and innovate the WSJ into whatever it is that people want now. Note to Mr Thompson... wake up! The times they are a changin', get out of the way or get busy re-inventing yourself, don't blame me if I don't want to pay for your paper, blame yourself for not creating content I want to read.
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changing measures of value
In the old school newspaper world, you picked up a WSJ because you believed them to be a reputable source with sound content. You placed your trust in the editors of your selected newspaper to deliver the content that best fit the narrow model of that newspaper.
The problem is now that Google has flipped the industry model upside down.
In search engine terms, the old model was:
O.1 - Choose "Quality" Source
O.2 - Examine Content for possible interesting keywords
O.3 - Read articles that match keywords
The new model is something more like:
N.1 - Search Google for interesting keywords
N.2 - Google searches keywords and calculates "Quality" mostly from how popular a news item is (Quantity)
N.3 - Read articles that Google places on top
So in the past the value was in finding a content provider first. (O.1)
Now the value is in defining your own interests and letting Google find a matching content provider. (N.2)
The new model is way cheaper and easier for the consumer than the old model ever was.
It definitely de-values the work of the press because now instead of paying a bunch of really good news reporters to write articles really well, they have to pay a bunch of really good IT workers to make sure they come up first on Google.
And before we all cheer for the death of the newspapers, don't forget that a lot of the content that comes up on Google derives from local newspaper sources:
Los Angeles Times, New York Times, Washington Post, San Francisco Chronicle, Chicago Tribune, Chicago Sun-Times
So if the newspaper organization in your nearest city goes out of business, who will cover the local news for your city?
Start blogging fanboy.
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err...your wrong?
The writer is saying that it takes "pay-for" type services - makes them better, and then makes the accessable to the user for free.
10 years ago no company in their mind would have thought about launching a satalitte into space to GIVE GPS to anyone who had access to the internet, or gadgets on the computer to make everyday life a little easier.
I am not against this since I am a user, and just about anything Google does benefits me;
but you cant sit there and say they don't devalue other services because that would just make you simple. If you take a pay service, and make it better and free - then guess what? people will stop paying, and use the free service.
I like your site, but sometimes your logic is circular.
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Re: Re: OK so where are the successes
You do realize that's *already* effectively the model they use. Almost all of the real revenue for the NY Times comes from advertisers. So Exxon IS paying for their investigative journalism.
As I wrote the other day. in response to a similar story by Mike, I think we in the Internet industry need to stop pretending like we have all the content industry's problems. Simply getting newspapers to focus on "community" isn't really an answer. Twitter and Facebook have enormous communities, but both are STILL struggling to find long term business models.
I never said just community is the answer. But I did say that community is the biggest asset. Don't worry... we're working up to an explanation of how you make money with that asset. :)
If we're honest with ourselves, we'll admit that we don't have all the answers.
There's a difference between claiming that we have *all* the answers and recognizing a bad idea. We have some of the answers and can still call a bad idea a bad idea.
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WSJ value?
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Re: So -- who will pay for the news?
Bloomberg prints nothing yet makes lots of money. Granted, they charge money for some content, but a lot is free.
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where would we be without it
If you talk about value, i think google devalues outdated/poor quality...
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Quality
If that was so, google could not have been the most used search engine on the earth. It's the quality results that makes it so popular among the internet users!
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Re: Quality
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Yes, but...
Mike seems to be concentrating on the relevence angle. He's right that Google does this well. Sites where a term(s) appears a number of times in proximity to other terms will appear higher on a list of searches. Often this allows you to get information related to what you're looking for, assuming you really know what that happens to be.
I could be giving him too much benefit of the doubt, but from my reading of the quote, it seems Mr. Thomson is talking about something entirely different here. Thomson is talking about "quality", meaning information from a source that has authority, credibility, and accountability (among other things). There's a lot of crap on the internet and Google "pushes" it as vigorously as valuable stuff if it matches the search terms well.
The best example I can give is the instance of a little boy who came into the library where I work and asked for help printing. When the librarian went to help him navigate the print management software. She asked casually what the boy was working on, and he said he had a project on the Holocaust. She was horrified to see that much of his material was from sites maintained by Holocaust deniers and tried to help steer him to more appropriate material. This particular search now fares much better, but at the time many of the sites on the first couple pages were of the appologist/denier sort.
There are numerous other less extreme examples one seaching for one thing and getting something else. Say you are doing a search for a project on the casinos and racetacks and search for "Gaming Industry", a perfectly correct term. That search would result in hits about video games which have nothing to do with casinos.
Be careful about confusing "relavence" with "quality". Because you can easily have one without the other. Google is excellent at finding that which is coldly relevent and fails miserably at finding quality. Of course, it's likly too much to ask for a search engine to make a quality judgement (for now).
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WSJ Editor and Google
If you had listened a little more carefully, you would have heard Zuckerman trying to lead the discussion toward a more moderate stance, such as his comment on micropayments, which comes down to "we won't be the first", and an attitude that suggested "we won't do that".
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Rebuttal and Discussion at The Noisy Channel
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WSJ editor and other maroons
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Robert Thomas is completey right!
Too bad the WSJ has turned to big color pictures of sports figures, fires, and beauties instead. In their quest to commonize and be more like the NYT they are destroying their value.
And what's up with all the typos? Are copy editors not considered valuable?
-Stiennon
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Sorry Mike, you're the confused one.
You are confusing value and utility. Incredibly efficient distribution lowers aggregate economic value for the producers of that good (though increases GDP overall). Their stuff is more useful by more people in more ways, but so what? Their job isn't the GDP, it's down jones. There will never be a plan that gets the WSJ paid at the old levels *no matter how smart they are or what they try.*
Technology change always replaces old dollars with new dimes. It always devalues the old businesses. Google's just the largest current tech supplier. There is nothing unique about Google in that way.
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Re: Sorry Mike, you're the confused one.
I disagree. Yes, they increase GDP overall, but that increase represents an OPPORTUNITY. The issue is that Dow Jones needs to come up with the best plan to capture as much of that increased GDP as possible. It doesn't need to be all, but they absolutely can capture more of that increased GDP than they lose in changing business models.
Technology change always replaces old dollars with new dimes. It always devalues the old businesses. Google's just the largest current tech supplier. There is nothing unique about Google in that way.
No. It may devalue old business *models* but not the businesses themselves.
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Time to reinvent the business model guys
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Here's the video:
http://www.metaprinter.com/?p=1830
At 9:20 Robert Thomson says, “Google devalues everything it touches” and I cannot help but think that he sounds like a local store owner complaining about WalMart. In the mean time everyone is shopping there and the company is single handedly responsible for most all innovation in store / product logistics. Rickles and Bamburgers went out of business for a reason, the free market spoke.
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Re:
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At least libraries pay for one copy of the information, and people have to wait in line to get the information (the tradeoff for receiving free information). The lack of payment is why newspaper execs think Google is parasitic.
Meanwhile, if local newspapers die, I will be shocked -- shocked -- when people complain that the websites of their school board or local municipality don't tell them the truth, the whole truth and nothing but the truth about the decisions the school superintendent or the board of supervisors are making.
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Right and wrong
I know it's easy to tweak old-school newspaper guys, especially when you work for a successful tech blog, but slow down a second.
Google is undeniably helpful to a select group of people, most prominently bloggers and small business owners. These are people who lose nothing in their interaction with Google; Google helps bloggers attract more viewers, which means more advertising bucks (and/or funding), and small business owners get more attention drawn to their product, which means more sales.
But consider newspapers, whose product is information and whose costs are far beyond a five, ten or twenty-person start-up. Google - and other search engines - give their product away for free. The corresponding problem is that newspapers, fearing what will happen if they close the door even a little bit, allow it to go for free.
The blog model doesn't care about free, and maybe that's where things are headed. Whether that's good or bad remains to be seen, though I'm discouraged by the fact that it seems that the only sustainable "free" online pubs are those that focus on tech or celebrity gossip.
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Google is SPAM and big brother at it's worst
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Re: Right and wrong
I read that and all I see is (a) newspapers are wrong if they think their product is "information" -- it's never been information. It's always been their community. And (b) the second part makes no sense. You're saying newspapers are more inefficient and wasteful than startups. So? That just explains why they should go away.
The blog model doesn't care about free, and maybe that's where things are headed. Whether that's good or bad remains to be seen, though I'm discouraged by the fact that it seems that the only sustainable "free" online pubs are those that focus on tech or celebrity gossip.
Think more dynamically. The market is in transition. It will continue to do so. There are some great business models that will work for online news.
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