Since I’m already bashing my own industry, I thought I'd comment on this ridiculous commentary on Google by New York Times columnist Jason Pontin that came to my attention today.
In a two-minute clip, Pontin manages to be wrong on about five different levels. It’s hard for me to believe that someone who edits a technology magazine would have a view of the Internet economy that’s so simplistic and flat. To wit:
“Google is like a gigantic parasite that hollows out existing businesses.”
Google is just a service provider, albeit a dominant one. Its search abilities rest on top of an almost infinitely efficient distribution system for information. They’re in the business of distributing and sorting, not producing, content produced by the media. Calling Google a parasite makes about as much sense as Pontin running out of his office at Technology Review and screaming at the truck driver who deliver his magazines. I mean, isn’t that guy a “parasite” as well? He doesn’t produce anything, after all. He costs more than Google, too.
“They hollowed out the existing classified business.”
Google doesn’t have classified ads. Blame craigslist.
“Then they began to hollow out the existing news businesses.”
No, the news business started giving itself away for free, because it didn’t have any other choice. If you don’t want Technology Review to be “hollowed out,” then keep Google out, or insist that users pay for your content. It didn’t work out for the New York Times, but hey, give it a go. (It still works for some parts of the legal press).
Then he gets to his real gripe: online ads don’t pay him as much as the print ads. He doesn't get enough money. Well, arguably the advertisers had been paying too much for print ads, and are enjoying a more efficient market. In any case, they have a lot more options.
“In the long run, that’s bad for Google. Unless they can find some way that I can have some value to attach to this incredibly expensive enterprise of creating clever, thoughtful, groundbreaking content, they’re not going to have anything to live parasitically off forever.”
It's true--good journalism is expensive. But newspaper stock prices are only dropping because investors don't see the monopoly profits of yesteryear. Ousted LA Times editor Jon Carroll told the New York Review of Books that if the new boss was willing to take 10 to 15 percent profit margins--extraordinary in most businesses--the paper would be a journalistic "juggernaut."
Essentially, Google is a "parasite" because it’s harder for Pontin to make money. The new media universe is tough, and there’s a lot more competition. But competition is generally a good thing, especially in the information business. Pontin may have successfully isolated himself from those pressures, since Technology Review is owned by a non-profit, MIT.
But as he points out, Google doesn’t make any content. Pontin's ad dollars have been competed away, and he’s shooting the messenger. Pontin is a smart guy and I like his writing in the Times, but here he sounds like a sore loser who has had two magazines die on his watch.