Google closes the book on newspaper sales.


 Liam Walsh writes: Pretty cheesy headline huh.

It is somewhat of a surprise that Google closed its newspaper sales project because it’s capacity to keep funding it is seemingly high, nevertheless it is gone.

Check it out.

http://online.wsj.com/article/SB123248131740899103.html?mod=fox_australian

No word yet on their television and radio businesses however it is fair to say their closure would not come as a shock given their revenue contribution is miniscule.

A happy man at Fairfax once told me about a book called the innovator’s dilemma. I didn’t read it because I felt very embarrassed buying a book with such a trite name. Also it was during his management text phase so I just pretended I was interested, nodded and walked away with a look of steely determination.

One of the many dilemmas facing an innovator is to keep innovating. The bigger the success of the original innovation, the greater the pressure to come up with another. Of course history shows most innovators only have one innovation in them.

Google certainly has struggled with innovating in any meaningful way since it created a superior search engine. Gmail is popular-ish. Maps are popular-ish and prying on the world through satellites has caused some interest but nothing from Google has stopped anybody in their tracks except its excellence in pure search.

In my view, being excellent in search is enough. It is low cost and high revenue. It also scales exceptionally well.

Problem is the analysts won’t accept that and the management team don’t feel like settling either.

Taking on display advertising outside of digital will be a struggle as google don’t bring anything new to it.

Google didn’t invent auctions and even if they had have (remember they didn’t), auctions can be easily replicated. Google would need to bring something fundamentally unique to mainstream media and right now it is not easy to identify a structural problem in mainstream that is easily identified.

So I am tipping their exit from mainstream entirely to focus exclusively on digital. They have made inroads on display however that is a far less rational beast than search so it will be interesting to see how that goes.

Ben Shepherd writes: Yep, the headline is cheesy Walsh.

Google is great at search, which for me is enough. Maps is also fantastic but I am concerned it will be hard for them to make money off it in terms of advertising. That’s not to say it couldn’t be monetised some other way. YouTube fantastic but will struggle to make money in the next 5-10 years as it currently operates.

Some of their other tools are great. Feedburner – handy. Blogger – handy but clunky. Analytics – great way for some ad agencies to make large fees off a free piece of software (not the one I work for but I know of many that charge clients to use it), News – good way for those who only like reading about certain topics to avoid the rest of the world news, gmail – neat mail program, gtalk – sure the 3 or so people that use it on their PC like it – great for blackberry though … yeah, they’re great but I doubt they’re adding much to the bottom line.

I agree with Walsh – being excellent in search is enough. Trying to play in display advertising is ultimately a resource churner – Google don’t bring anything new to the equation – ie new tech, information, insight, analysis … you have to wonder what role they feel they can play here.

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