How Google Plans to Save the News

The Atlantic cover story on Google and the media is wonderful: full of bite-sized lessons (What's hurting the newspapers? Loss of classifieds, loss of circulation, loss of ad value) and long-form wisdom (To understand Google's solutions to the media's hard times, you have to understand how Google sees the role of journalism and Internet intertwining).

This is one of those times where the smartest thing to say about Jim Fallows' piece is read the whole thing. But here are two particular points worth calling out.

First I think Google folks are being too polite when they tell Jim the company doesn't blame journalism's struggles on the "short-sightedness or backward thinking" by some editors and publishers. Google's media products respond to voids in the media industry. Often they're innovating where publishers are not (they can certainly afford to), and because publishers are not.

Just look at the examples in the piece. The Living Stories feature responds to the need for journalists to do a better job stringing news items together to build a broader, longer story about important issues. Fast Flip is a clever way to break out of the "waterfall," or listicle, approach to aggregation. Google News responds to the considerable redundancy of hundreds of newspapers paying hundreds of journalists to write similar interpretations of the same story. In fact, one of Jim's sources says as much:

Bharat said it also indicated a faddishness of coverage--when Michael Jackson dies, other things cease to matter--and a redundancy that journalism could no longer afford. "It makes you wonder, is there a better way?" he asked. "Why is it that a thousand people come up with approximately the same reading of matters? Why couldn't there be five readings? And meanwhile use that energy to observe something else, equally important, that is currently being neglected." He said this was not a purely theoretical question. "I believe the news industry is finding that it will not be able to sustain producing highly similar articles."

That's an excellent critique of news-gathering organizations. It's a critique, nonetheless.

Second, the most illuminating section of the piece for me was the diagnosis of journalism's malady. "Newspapers never made money on 'news,'" Hal Varian tells Jim. "Serious reporting, say from Afghanistan, has simply never paid its way. What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads." Jim goes on:

The Internet has been one giant system for stripping away such cross-subsidies. Why look to the newspaper real-estate listings when you can get more up-to-date, searchable info on Zillow--or better travel deals on Orbitz, or a broader range of movie showtimes on Yahoo? Google has been the most powerful unbundling agent of all. It lets users find the one article they are looking for, rather than making them buy the entire paper that paid the reporter. It lets advertisers reach the one customer who is searching for their product, rather than making them advertise to an entire class of readers.

In other words, the Internet is really good at quickly matching reader to content. For now, that's a problem for newspapers, because they once relied on readers to (1) buy the cross-subsidized bundle and (2) sit and browse the whole thing. Online, the cross-subsidies are stripped and smaller minutes-per-page justify smaller dollars-per-impression.

But in the future, there's no reason why websites shouldn't be able to use the Internet to quickly match reader to advertisement. If we know where readers are, what they've read, and what they like, we should be able to provide targeted ads to readers that should justify higher prices. In a nutshell, that's Google CEO Eric Schmidt's hope for the furture of media consumption: mobile readers, Internet-enabled devices, targeted ads. I hope he's right.