Thursday, February 12, 2009

"Google devalues everything it touches"

One of my classmates, Domingo Isasi, runs Que Pasa Media.  Que Pasa operates for hispanic customers in North Carolina.  Domingo and I have had several conversations about news media and how the Internet is changing its form and economics around the world.  One of the great things about the MBA program is getting first hand experience from classmates.

Charlie Rose recently hosted a discussion of online value for newspapers, which touches on a number of the challenges they are facing, including:
  1. How to get people to pay for content once they can get similar content (or reblogged content) online for free.
  2. The challenge of trying to convey value to customers that probably didn't truly think about value before, since there weren't easy alternative options to get news before the internet (that's simplified, I know).
  3. How all of these news creating sources (newspapers, magazines, blogs, video-blogs, microblogs) will be able to survive with only advertising revenues, especially given how Google is driving down CPMs.
  4. Is it a good thing that Google seems to be one of the few companies making money around news, while the newspapers fail?   Or is this just the next phase of Darwinian evolution and new models will emerge?
  5. What role do local newspapers (or local media outlets) play in the bigger picture?  Are people willing to pay for that local content in order to feel connected with communities? (this is Que Pasa's business).
There are many more aspects of this, and it will be interesting to see how it plays out over the next 3-5 years.  While maybe not as economically impacting as the banking challenges, I think it's equally important to see some controlled survival.  I'm pulling for the local newspapers, both because of my past employment and for the experiences of my children, whom I hope enjoy reading for pleasure and knowledge just as much as I do.  

As an aside, maybe this is a good excuse to teach myself (and my children) Spanish, so we can follow the local news via Que Pasa, and I can help support a classmate!