Where Google Goes From Here
Google’s dominance in Internet search has earned it billions in profits and has allowed it to expand its ambitions far beyond search and advertising to all other aspects of the online world, including publishing. Next year, it will challenge Microsoft Windows by unveiling its Chrome operating system, a browser-based technology.
The New York Times asked two observers of Google to discuss its effect on the Internet and new and old media — Ken Auletta, author of “Googled: The End of the World as We Know It,” and Fred Wilson, a venture capitalist at Union Square Ventures and an early-stage investor in many Web companies, including Twitter.
Google is a “frenemy,” neither an enemy or a friend. From the consumer’s vantage point, Google News and Google search wondrously delivers the news they want it, when they want it. From Google’s vantage point, it’s delivering extra traffic to newspaper Web sites, allowing them to sell advertising.
From a newspaper’s vantage point, online ads sell for roughly 10 percent of the rate charged for the same ad in a newspaper, and newspaper executives grouse that Web search subverts the value of their brands and reduces all news to the sameness of a commodity. Who’s right?
Each is, in the short-run. The problem is the long-run. Google knows that good journalism is essential to producing good search results. But they’re not about to subsidize newspapers or risk their Swiss search neutrality by investing in a content company they might be perceived as favoring. So the math doesn’t work. Newspaper ad and circulation revenues fall and online revenues don’t close the gap. So the dilemma remains: How to pay for Dexter Filkins in Afghanistan and investigative reporting and coverage of City Hall and state capitols?