Google Now Larger Than Entire US Newspaper Industry

Google Now Larger Than Entire US Newspaper Industry
World
Like Us On Facebook
Like Us On Facebook

These sorts of comparisons always do depend on what it is that you decide to compare: Google certainly doesn’t employ more people than the US newspaper industry and it’s certainly worth much more in terms of corporate value. But a useful and sensible measure could be revenue and on that measure Google is now larger than the entire US newspaper industry:

This would mean that US newspapers are a $34bn (£21.6bn) industry. By contrast, Google alone recorded revenues of $37.9bn (£24.1bn) for 2011.

It’s not an entirely fair comparison, the newspapers’ revenue is almost entirely domestic (believe me, near no one outside the US reads US newspapers) and much of Google’s isn’t.

This, as the Italians would put it, Sorpasso has come about because US newspaper advertising and circulation revenues are declining while Google’s advertising revenues are rising.

However, the thing I think interesting is that it isn’t really Google that has eaten the newspapers’ lunch. It’s certainly the internet, yes, but not specifically Google.

Back in the day, only two decades ago in fact, US newspapers had three sources of revenue. For someone like the New York Times, they were of roughly (do understand, roughly) equal value to the firm. There was subscription revenue, classified advertising and display advertising.

What has gutted the economics of newspaper is not so much falling circulation, nor the falling display advertising revenues that follow that. While these are worrying, while they do spell the ultimate end of the physical newspaper industry at some point in the future, that isn’t really what is causing all the pain at present.

What is causing the pain is the way that the internet has stolen the classifieds. Everything from Craigslist, to Monster.com for job adverts, e-Bay as a way to get rid of the kids’ bikes and prams as they grow out of them, these firms and the myriads like them are what have swallowed one third or so of the newspaper industry’s traditional revenues and that’s why they’re hurting so bad.

It’s interesting to note that the US newspapers are, in economic terms, much more like the local newspapers of my native UK. That reliance on that classified ads income stream: the UK nationals haven’t really dealt with classifieds since they went national a century or so ago. And yes, the UK local newspapers are finding themselves being gutted by exactly the same firms on the ‘net taking that revenue stream. The nationals are doing quite well comparatively.

That the UK nationals are surviving (indeed, some like the Mail are thriving) shows that it is possible to run a newspaper with only the two income sources, subscriptions and display advertising. Which means that there’s quite possibly a fortune to be made in the US newspaper industry: if you can carve out one third of the cost base you should be able to deal with the loss of the classifieds income. Sure, this will only delay the inevitable, as the whole business moves online, but there is a whole lot of money to be made in sweating a business for a couple of decades even as it progresses into irrelevancy.

The big question is though, which one third of the cost base can be eliminated?

Tim Worstall | Forbes

Elite.

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Preston Waters

Preston Waters is a thinker. He's not your traditional philosophical persona, however, as he leaves no topic untouched. Covering all the bases, from business to women, Preston Waters is the ultimate man's man for Gen-Y.

More In World

World Emily Arata

Besides Being Delicious, Bacon Could Be Essential To Stopping Nosebleeds

The next time you have a nosebleed, forget the tampon. Stick a piece of cured ham up your nostril. Dr. Sonal Saraiya and her team at the Detroit Medical Center received an Ig Nobel Prize for ending a child’s unstoppable nosebleed by pushing strips of cured meat up his nose. The boy suffered from Glanzmann’s thrombasthenia, a condition […]

World Sean Levinson

Earth’s Population Could Possibly Reach 12 Billion People By 2100

A research team from the University of Washington has predicted Earth’s population to exceed 12 billion by the year 2100. Statistician and sociologist Adrian Raftery and his 13-member crew arrived to their conclusion after analyzing UN data regarding rates of fertility, death, migration and aging. The results yielded significant uncertainty on many levels, saying we […]

World Emily Arata

Pabst Blue Ribbon Will Be Sold In Russia, And Now There Will Be Even More Hipsters

In dimly-lit dive bars across the country, the American hipster is weeping. Pabst Blue Ribbon beer was once the refreshment of blue-collar workers before becoming the unofficial drink of the young hipster movement. Today, Eugene Kashper of Russia-based Oasis Beverages announced the sale of Milwaukee-based Pabst Brewing Company. PBR is a 170-year-old brand that stretches […]

Also On Elite

World

Bride To Be Makes Insane Bachelorette Music Video Instead Of Throwing Typical Party

After four trips to Vegas for friends’ bachelorette parties, Lauren MacKenzie decided to make her own celebration a little different. MacKenzie, a Los Angeles-based television writer, invited her friends and family to a music video shoot instead of a traditional bachelorette party. There, the group learned choreography to pop songs like Beyoncé’s “Crazy in Love” […]

Humor

Louis CK Predicted The iCloud Would Find A Way To F*ck Over Humanity (Video)

There are a number of theories concerning the origins of the celebrity nudes that flooded the Internet over the weekend, but at this point, no one actually knows what happened. If you think that stopped people from speculating, you obviously haven’t been paying attention to how the world works. From hacked WiFi connections to stolen […]

Life

To The Guy Who Says He’s Never Having Daughters…

You’re never having daughters? OK, sir. I’ll make sure your sperm are advised and make the necessary adjustments upon ejaculation. I’ll notify the egg, asking it to please fertilize correctly and come out with the exact gender you specified. I’ll change that 50 percent probability to 100 percent accuracy. Let me just go and alter the […]

World

Guy Films TSA Wrongfully Detaining Him After He Reaches His Destination (Videos)

Kahler Nygard boarded a plane from Minneapolis to Denver last Saturday but was called for an additional screening when the flight landed. He was forced to deboard early, in front of the other passengers. A TSA officer then told him that a more invasive security check should have been completed before he boarded the plane […]

World

Rap Song Made Entirely Out Of Craigslist Ads Is Surprisingly Good (Video)

Nothing says romance like a classified ad about a woman buying frozen pizza at the grocery story. YouTube rapper Mac Lethal turned Craigslist’s classified ads into a slow jam, rhyming “Ontario” with “take it very slow.” Mac Lethal’s not new to the viral game, either. He has shown off his tongue twister skills before and gets […]

Humor

Fetus Lets Everyone Know All Is Good By Giving A Thumbs Up In Ultrasound Photo

Going in for an ultrasound is a simultaneously exciting and terrifying experience for expecting parents. In most cases, the fetus is given a clean bill of help and you get a nice little picture to upload to Facebook to prove to other people that you’re capable of getting pregnant too. However, it can also reveal […]