Google leads digital wave that is swamping “old media”

Posted Nov 4, 2009 by Kevin Walker

Updated Nov 6, 2009 at 11:07 AM

Ken Auletta, who writes the “Annals of Communications” column for The New Yorker, has access to many of America’s heavy-hitting media moguls. Here’s the major “take away” from his new book, “Googled”: those media moguls aren’t so heavy hitting anymore.

Traditional media — referred to as “old media” often in this book, ain’t that sweet — is in crisis. Even the most casual reader is aware of this. Those who work in media are, I assure you, *very* aware of it. Here are the headlines in case you’ve missed them: newspaper circulation and advertising are down; television viewership is fragmented and the broadcast networks have lost huge chunks of audience share; Internet advertising is up but brings in a fraction of the dollars that traditional media advertising does.

In “Googled,” Auletta offers little hope this trend will reverse itself. He interviews many people involved with media, from newspapers and magazines to television, book publishers and the music industry. No two people completely agree on what the future might look like in terms of media consumption, but they all agree that one possibility is a complete steamrolling of traditional media models.

Google, while not to blame, has everything to do with this.

As Auletta writes in the book’s opening lines, “The world has been Googled. We don’t search for information, we “Google” it. Type a question in the Google search box, as do more than 70 percent of all searchers worldwide, and in about a half a second answers appears.”

It’s amazing, really, but like all amazing technological advances (GPS in cars, smart phones and — my favorite — air conditioning) it is quickly taken for granted. Certainly Google has made a wealth of information available to all the world, for free (well, minus the cost of an Internet connection). And that was the goal of Google founders Larry Page and Sergey Brin, two engineers who wanted to make information easily accessible.

So why is this leading to chaos in media? Because Google, searching for ways to monetize their search engine, began selling advertisements to run alongside search results. The price is fairly low, but it makes money for Google because of the massive number of people — some three billion — visiting its search page every day. We’re talking truck loads of cash — Google had revenues of $21.7 bllion in 2008, and CEO Eric Schmidt predicts the company could become the first 100 billion dollar media company.

In short, Google built the better advertising mouse trap. Advertisers have flocked to the Web’s low cost, targeted advertising pioneered by Google. This isn’t the only reason that traditional media is in trouble, but Google has become a target of choice for frustrated traditional media types. The complaints got worse after the launch of Google News, a very handy aggregator of the day’s news that has siphoned readers away from daily newspapers and news media Web sites. Google counters that it is linking to news Web sites, giving them clicks.

Much of the book is like this — a back and forth between the complaints of traditional media titans and Google’s leaders, who often come across as naïve as the Google corporate motto, “Don’t Be Evil.” There is also quite a bit about the Google culture, which includes allowing employees to use 20 percent of their time to work on their own projects and stock options that have made many Google employees rich.

But what’s more interesting are the ideas from Google leaders and others in Silicon Valley about the possible future. For example, Marc Andreessen, creator of the revolutionary Netscape browser, predicts the Web will soon have 2.5 billion users worldwide. “When has the music industry and the movie industry and the TV industry ever had a market that big to deal with before? And when has the distribution ever been this cheap? An entrepreneur looks at that and says, ‘Oh, my God, it’s a monster opportunity.’ Somebody who is protecting an existing business says, ‘Oh, my God, I’m going to go out of business!’ Now, they’re both right. It depends on whether they radically make the changes they need to make.”

Smart phones like the iPhone and the Android (which uses software from a company Google bought) are just the beginning of a radical change in mobiles, which will continue to improve in quality. Auletta reports that some day, phones might have progressed to a point where you simply point it at a building and all the stores, restaurants and other businesses will pop up on your screen, as well as the pertinent telephone numbers and Web addresses.

Like it or hate it, Google has been a large part of the digital revolutuion that is changing the way the media world works, and the conclusion of most of those interviewed here is that people either need to adapt or get trampled. Whether Google continues to dominant advertising or a rival takes over, the new culture of media consumption that puts control into the hands of the user, not the media companies, is here to stay.