Ads and News: 'Google News' Latches On to an Old Idea
You remember. The exquisite journalistic/commercial mix that sustained newspapers for many a year. News and Ads. Ads and News. Both, together, side by side. Reaching mass markets that wanted to know things and buy stuff.
We're seeing daily the damage done to that newspaper model, as newspapers themselves become higher-priced, niche vehicles for comfort-seeking baby boomer+ readers and as Google and other news aggregators become the new mass marketers, reaching broad swaths of every population group everywhere.
So, within that context, it's no surprise that Google has just added its paid search ads in it Google News pages. There they are, on the right hand side of the page, just as we've all become accustomed to on the search and other (just added on Google Finance and Google Earth as well) pages.
That's of course what Google does, making most of its $20 billion or so a year from those small paid search (Ad Words) ads. In response to the claim that Google is a one-trick pony, CEO Eric Schmidt likes to say, yeah, but it's a pretty good trick: The Internet. It's not really the Internet though; it's those little paid search ads.
Remember, too, that when Google launched Google News a couple of years ago, it made a point of saying it wouldn't have any ads on it. That statement blunted publishers' concerns that Google was using — say it ain't so — newspaper-produced news to make money! It, of course, reserved the right to sell ads, but "had no plans."
Flash forward to 2009. Google News is now the eighth-biggest news site on the web, having moved steadily up on the competition. (Only two newspaper-owned networks, the New York Times and the Tribune, are ahead of it.) Google is shuttering some money-draining initiatives and even freezing staff. So it needs money too.
How will newspaper publishers respond?
What they'd like to do is demand payment. AP, Reuters and AFP — wires — have all extracted money from Google for for content licensing.
Local news publishers, though, have not.
Now they find themselves in a too-familiar fix. Not only have they allowed to Google to index and snippet their stories — "fair use" has never been finally adjudicated in the course — but they've grown dependent on Google traffic overall. Google traffic began as a gateway drug and now has become an addiction, often among the top 3 drivers of "sideways" traffic. If publishers could collectively agree to pull their content off Google, their own traffic would suffer greatly.
Google has colonized the news and is now making claims to better local news customization as well. For news publishers, it's one more sign of a humbled, niched place in the world, a world in which they don't control two things that built their success — the advertising technologies of the day and the distribution vehicles to serve them.