Trust, Search, Google, Times Select, and the Future of Journalism

Felix Salmon writes:

How Google Killed Web Subscriptions: How Google Killed Web Subscriptions: Everybody knows that Google has won the search-engine war. But what's much more important is that Google has won the search war – and the latest casualty is TimesSelect. The subscriber firewalls at the WSJ and the FT will be the next to go.

Until Google came along, most content-based websites had a similar business model: users would come to the site's home page, search for what they were looking for, and then find it. So if you wanted a NYT story, you'd first go to nytimes.com, and then search. If you wanted a Wikipedia article, you'd first go to wikipedia.org, and then search.

No longer.

When I want to find one of my old blog entries on portfolio.com, I just type the search terms into the Google window in my browser. When I want to find a Wikipedia entry, I do the same thing, in the knowledge that Wikipedia's PageRank will guarantee that entry a top-two spot. Google's even very good at finding books on Amazon...

And if you think what you want is probably at a particular site, just add the site's name to your search string: "amazon", "wikipedia", "portfolio."

But Google is very bad at pointing people to anything behind a subscriber firewall – and rightfully so. What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com...

“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.

When was the last time you saw a WSJ or FT article on a web search? As people increasingly get their information from Google and not from home pages, the WSJ and FT websites have a choice: go free, or become irrelevant. The WSJ certainly can't be happy that Nick Denton, with his shoestring operation, gets more traffic, and more visitors, than they do. As Jeff Jarvis says today, the really valuable thing that the WSJ and the FT provide is not their news, but their relationship with their readers.... It’s the relationship that is profitable.... That is the essential media moral of the internet story. It has taken 13 years of internet history for media companies to learn that.... Google doesn't weaken the strength of the relationship.... [I]t just changes the way that readers find their trusted content. If a WSJ story comes up top of a Google search, people will click on it because they trust the WSJ. And because people trust the WSJ, WSJ stories will come up top of a Google search. It's win-win for all concerned, and, yes, Rupert Murdoch knows it.

Except for the money flows. It is not clear how large the advertising money flows will be in the long run. Especially if people continue to offer print-format versions of their articles that allow you to escape the ads.

I suspect we are headed for a winner-take-all situation here as well: journalists who acquire reputations as experts will do very well as they become draws for advertisers. Institutions--not so much. Anybody who trusted the New Republic under Michael Kinsley and then encountered the New Republic under Andrew Sullivan, Michael Kelly, and Peter Beinart learned a very painful lesson about focusing on institutions rather than people.

Comments

[supersaurus]

and if you don't like ads you can use something like this (ad-block plus):

https://addons.mozilla.org/en-US/firefox/addon/1865

as long as the majority doesn't do it the providers will get their revenue stream and I'll be able to read their sites without the ads, a great deal for me ;-).

[Matt]

There's a (maybe small) technical factor in the rise of Google-- if you put just search terms into the Firefox address bar (i.e., instead of a URL) Firefox will go to the "I'm feeling lucky" first Google result. So, e.g., if you enter 'new york times' in the address bar, you go directly to the New York Times front web page, but it counts as a Google search.

[glenn]

I've said it before - been saying it for years - and I'm saying it now: be very afraid! Google will be much more monopolistic, powerful, and invasive than Microsoft ever was.

[c.l. ball]

I'm puzzled by how much Salmon and Jarvis are making of the NYT decision. Unlike WSJ and FT, NYT only put their Op-ed and internet-only op-ed content for subscribers only. I talked to an NYT business guy when that happened and he was pissed -- the *news* should have been firewalled, not the opinion, he argued.

The Times found that it could make more money opening TimesSelect because the search engine (not just Google, but Yahoo and others) driven readership would allow it to charge higher ad prices. That might not be the case of WSJ or FT. WSJ has roughly double the daily circulation of the NYT; FT has less than half the NYT circulation.

[kharris]

"...journalists who acquire reputations as experts will do very well as they become draws for advertisers. Institutions--not so much. Anybody who trusted the New Republic under Michael Kinsley and then encountered the New Republic under Andrew Sullivan, Michael Kelly, and Peter Beinart learned a very painful lesson about focusing on institutions rather than people."

This is the DeLong (and Harris) fantasy world. You have piled up counter example to the sky in your "Why Oh Why" series. People want to have their emotions pumped up. They want to have their biases confirmed. They want Oprah and Rush and Hannaty, in preference to Truth, Beauty and Honor.

So good luck with "experts will do very well." Evidence is that we are headed away from that world, rather than toward it.

[Michael Carroll]

So the central asssumptions of the Theory of the Firm are breaking down. This can NOT be what we are suggesting here.

[Robert Waldmann]

"trusted" is such a strong word. I don't think you ever trusted TNR, I certainly didn't. But long long ago I found it interesting.

Anyway delighted at a pause in the Kinsley bashing.

[Robert Waldmann]

"trusted" is such a strong word. I don't think you ever trusted TNR, I certainly didn't. But long long ago I found it interesting.

Anyway delighted at a pause in the Kinsley bashing.

[christofay]

Good, we're still working the Salmon portfolio, except it's not the misnamed finance system melt-down labeled as the subprime melt, it's one of the current pillars of the stock market, Google.

Yes, Google will do its part to disaggregate the present news gathering and spreading business, it'll contribute to flatter organizations at the Times. In the meantime, no matter what it executes, does it justify the current stock price? No. That price will deflate. Why isn't this the subject of the article?

What about portfolio, anyone signing up? It seems to be putting a lot of editorial on line for easy reading. I didn't notice a single ad. Perhaps if I can get richer I'll start to notice the ads. Forbes-on-line which had a mega page views metric when Bono bought in is subscription only.

[christofay]

What the heck happened to General Tommy Franks? He so bravely named the barricades in August 2004, now I am waiting for his leadership. I remember well that August when the fighter shield took off from Otis Airforce Base to welcome the President flying in for his pre-inauguration party in New York. Usually the planes take off in pairs, but this time there was pair after pair, and one last single plane scrambling quick after close to a dozen already flew by. It must've been a flyover for the President landing or for staging another photo opp operation.

A company like Google for most people stands firstly as a stock ticket symbol and a share price. Way too high. Salmon's writing perpetuates the view that Google has value, great value, kicking ass in the Anbar Provinces of Media. The value of Google should be lateral to the Times, it isn't. Didn't we already have a similar discussion in AOL and Time/Wantmore?

[christofay]

Kudlow Cramer also writes about the 4 Horsemen of the Stock Market, Apple and another company and another company, maybe it includes Google. Who cares? It's just another list of companies' whose stock prices are sure to fall hard in the upcoming sell off. However Cramer writes for the plebian The Street.Com, it ain't the portfolio a magazine for the 20% of the 20%. Did you notice the other portfolio columnist who wrote about Greenspam? Not too much good to say about that guy

[wood turtle]

How long can they continue to offer free content if more and more people figure out how to avoid the ads?

Does it still count as an ad hit if the person turns on ad blockout?

[Slocum]

Well, it may turn out that there simply will be less money to be made in journalism going forward -- that the flows from web advertising will never bring in the amount of revenue that the old newsprint model used to produce. But will that mean a reading public that is less well informed? I not worried--since the trends have been dramatically in the opposite direction (that is, the trend is toward a far greater quantity of information available, which information is exponentially easier to find, and which is provided at, effectively, zero cost).

[deficit]

Note that technically it is not very hard to enable Google crawler to index the pages that normal users would have to subscribe for. So you'd click on the link in your search results and be prompted with the subscription notice - and would probably pass. To make paid content work in search-driven world you need micro-payments and the best company positioned to offer them is, guess what, Google.

[Doctor Jay]

A few thoughts: We are in a huge news-gathering-and-reporting consolidation. We don't need as many people reporting on the same darn thing as we used to do. The shrinking revenue stream will drive this. Local and regional news organizations will focus their resources locally, where there's still a big value add. The NYT could easily survive the shakeout as a national player, as could WSJ, CNN, etc. I'm rooting for McClatchy, myself. Losers will have to become more specialized, either to a region or a topic.

Second, I don't think Google will drop in price so much as stagnate while it continues to grow its revenue and bottom lines. Maybe that's just a nit.

Third, Ad killing software only kills off the really obnoxious, in-your-face popup, etc. ads. More media outlets need to learn the Google lesson. People don't mind ads that seem related to what they are looking for, or looking at. And those ads are better for the advertiser, too. A classic win-win. Just like the trust equation Brad mentioned.

Fourth, Google's monopoly isn't as strong as you might think. They have four foundational pillars, upon which is built their brand equity. Only one of those pillars is intellectual property in terms of providing good search results. I don't find it implausible that someone else would figure out how to deliver search results that are in the same ballpark as Google without violating their patents.

Of course, they would have a big reputation and lead to contend with even then. But Google runs on trust, too. Customers trust Google to give them an honest ranking, except where explicitly called out (I'm talking about ads). If that trust is ever broken, it opens the door to any reasonable competitor to step in and say that they will keep the faith.

[Preston Gardner]

Reprints were often available free via Google before.

I haven't had a WSJ subscription for years, but I have often been able to read the headlines of articles I wanted and then Google them to find the articles reprinted in other papers. The WSJ often resells its articles to other papers, who post them on their Web sites without subscription requirements. So this is another argument for why Google breaks subscription sites. It forces newspapers to ask themselves if they want their content to be secret. If you are an obscure paper like Grant's Interest Rate Observer, you probably do. But the WSJ is too big. Papers have to ask themselves what they are really selling, and are they trying to sell it to a mass market or a specialist market.

[vtcodger]

***I've said it before - been saying it for years - and I'm saying it now: be very afraid! Google will be much more monopolistic, powerful, and invasive than Microsoft ever was.***

A more measured view might be that Google has the potential for being more powerful and invasive than Microsoft. I agree. Microsoft is about making money, not managing its user's lives. Microsoft doesn't care whether its users are candidates for sainthood, islamic fundamentalists, neo-fac...conservatives, socialists, libertarians or whatever -- just so they send money ... Lots of it.

Google, on the other hand has far more visibility into who its users are and far more potential for shaping what is presented to them and how it is presented. But it also has competition -- something that Microsoft did not have on the desktop for two decades. (In the server world where there is viable competition, Microsoft has not been if not a failure -- somewhat underwhelming.) Unlike the desktop OS world, the barriers to users in switching search engines are not very high. It's not clear they can be made as insurmountable as the barriers to leaving Microsoft behind have been for most users. A decade ago, Alta Vista was the dominant search engine and no one had ever heard of Google. When Google showed up with a moderately better search engine, users switched en masse. Alta Vista and a few dozen other Search Engines are still out there, tweaking their products and crawling the web.

Don't like Google. Use something else. Don't like Microsoft. Up 'til recently (and for many folks even now) the alternative is to turn the computer off and leave it off.

[Barry]

Brad: "Anybody who trusted the New Republic under Michael Kinsley and then encountered the New Republic under Andrew Sullivan, Michael Kelly, and Peter Beinart learned a very painful lesson about focusing on institutions rather than people."

Adding on to the comment above, concerning the conceipt that lying journalistics organizations will be punished by the invisible hand - before Kinsley, TNR was a money-losing vanity press. After Kinsley, TNR was a money-losing vanity press.

[SearchBoth]

Searchboth is the first site to place google and yahoo side by side on one split screen. The web site takes the user's query and creates a browser window with two frames, with the results from Yahoo! on one side and those from google on the other. It has completely end up the hassles involved while searching different search engines at the same time.