Cleveland, Curveballs and Common Sense Putting 2 and 2 together since 1987.

Two steps forward, four steps back

A couple years ago I read a book for class called The World is Flat, written by New York Times columnist Thomas Friedman. It’s a great read for a lot of reasons, but I think a lot of times we take for granted what the Internet has done. The World Wide Web has been in existence for not quite 20 years, and already it’s a completely critical part of our society. Businesses are run without any need for a brick and mortar office, employees can work from nearly anywhere, and for many companies it’s not only vital to their success, but the Internet is vital to their core purpose.

Rupert Murdoch

I think we all know how the Internet has augmented our society, but one thing we may forget is how disruptive it’s been to other parts of our society. One person who hasn’t forgotten is News Corp. CEO Rupert Murdoch (I heard he was around when we discovered the world was round), who is planning to hide all news content from Google News’ index. Murdoch claims that Google is giving this content away and thus, he’s losing money because visitors get content for free from Google where they’d normally have to pay on news sites.

When I heard this claim, I immediately thought of another resistant-to-change part of American society: unions. One of the recurring effects of “flattening” that Friedman talks about in World is Flat is outsourcing labor to other countries where the labor can be performed more efficiently. Unions are resistant to this (somewhat understandably), but let’s be honest: if you’re a CEO, and you’re faced with the choice of outsourcing labor to India and getting the same quality for a lower price, or dealing with unions that demand higher wages for less work, what would you choose?

The fact is that the union’s way of dealing with flattening has been to hamper progress: passing laws that tax companies that outsource, quicker walkouts, and really just being a pain.

Now looking at this from the perspective of Rupert Murdoch, here you have a very well-trusted company who’s effectively parsing your news sites and allowing consumers to search them to find news, all at no cost to you or the consumer. Google doesn’t show you the full article, they have consumer click through to the article, generating you free traffic. Not only that, if the consumer wants more information, Google aggregates similar articles from different sites (which, since you’re Rupert Murdoch, it’s likely that you own more than one of those links), getting even more traffic.

If you’re Rupert Murdoch, you have two options:

1. Realize that you have all this traffic coming into your site for free. Figure out a way to monetize said traffic. Maybe pay Google some money to put your sites first in their news results, or buy some ads. Profit.
2. Furiously conclude that since Google isn’t paying you for the privilege to index your site, you’re not making any money from them. Make Google pay you, or “take your ball and go home”, and force users to pay ridiculous subscriptions for content they used to be able to get for free.

I’m not denying that Web hasn’t disrupted (read: seriously hurt) the newspaper/journalism industry. But I also contend that the new web, if handled properly, could be great for journalism. Look, you’re not going to get many people to pay for news, but a flat world has enabled the journalism industry to succeed outside of the big office building, away from the big printing press. In short, instead of having the 50s style newspaper building where everyone comes to work to file their stories, have them stay at home and submit their stories online. Print some papers, but mostly make sure your online presence is strong and rapidly changing. Make use of social media such as Twitter, Facebook and YouTube.

Lastly, make friends with Google. If there’s one company that we can define as “Internet, Inc.”, it’s Google. Telling Google you don’t want their help would be a little bit like South Korea getting into a war with China and then telling the US, “you know what, we got this on our own”. And maybe that’s where Murdoch is failing here: the Web isn’t about monolithic, opaque companies that work on their own; it’s about transparent, dynamic companies working together with other companies and relying on user content for everyone’s mutual benefit.

Look, it is the Web’s fault that newspapers are dying, but newspapers aren’t the only industry that’s being forced to change (radio, TV, etc.), and handcuffing your customers is a good way to speed up your trek into bankruptcy and irrelevancy.