Posted 11:06 PM by steve

Metaphorically speaking, Fortune writer Adam Lashinsky knows not what he speaks, evidenced by his writing that "Metaphorically speaking, Google is killing the newspaper industry. Online news is quickly hollowing out the traditional paper - the Christian Science Monitor eliminates its print edition, Tribune Co. declares bankruptcy, Detroit's two dailies slash home delivery to three days a week - while Google rakes in advertising profits".

Yes, a lot of newspapers are in trouble, and yes, Google rakes in advertising dollars, but most of the trouble facing newspapers has very little to do with Google. Put another way, were Google to not exist, newspapers would still be facing a troublesome future.

Let's start with his reference to the two Detroit dailies. Their troubles go back to well before 1987, when they entered into a joint operating agreement in an effort to keep themselves from going under... and in 1987, Sergy Brin and Larry Page, Google's two founders, were both all of 14 years old and Eric Schmidt, Google's CEO, was still working at Sun. And ever since then, the two papers have done a p*** poor job of figuring out a way of making money. Yeah, let's blame the problems the Detroit papers have on Google.

And while newspapers are suffering a big drop in advertising revenues, relatively little of Google's revenues would have otherwise gone to newspapers; businesses buying key words from Google were not - and if Google wasn't around, wouldn't be - candidates for advertising in major metropolitan newspapers. Think about it: how many of the vendors buying space on the right side or buying a 'Sponsored Link' at the top of any given Google search page were big advertisers in their local papers?

Newspapers are losing advertising revenue in large part for three reasons:

One, because classified advertising has moved to places like Craigslist (why spend hundreds of dollars for a Washington Post classified job ad that runs for all of three days when you can pay less than $50 for a listing on Craigslist and without having to get the ad copy in by noon on Friday to guarantee a run in that Sunday's paper? Why pay the Post even $50 for an ad with which to sell your old car when you can list it for free on Craigslist?)

Two, newspapers are losing revenue as declining circulations lower the amount newspapers can charge for ads from the advertisers still interested in advertising in a newspaper. And while one reason circulation is dropping is more people are getting their news from alternative sources (network TV, cable news, faux news programs and, yes, the Internet), Google, despite dropping a ton of money on the effort, is but a bit player in this area.

Third, the bad economy, which has made advertisers that much stingier with their ad dollars has also hurt newspapers, especially in areas, such as Detroit, where the local economy is - and has been for a long time - in real bad shape... is Google to get 'credit' for this as well?

I'm all for giving Google credit for what they've done... convincing people that their search model is better than anything else out there and figuring a way of monetizing search. But they're not gods, just about everything else they've attempted to do has yet to turn a profit (what kind of return are they getting for their $1.6 billion purchase of YouTube? on their investment in Google Earth?), and they're not responsible for the poor health of newspapers. Giving them credit (explicitly or implicitly) for such is ridiculous.