A catch phrase will go here soon.

Sam Zell is going to lose billions on newspapers and the Washington Post has no idea what they're talking about.


I just read this quote from an interview with Sam Zell, the real-estate billionaire who paid billions for a bunch of newspapers, and who apparently has no idea how Google works.

Witness this quote:

  • “If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?” Zell said during the question period after his speech. “Not very.”

Ummm…. exactly the same–and Google doesn’t steal anyone’s content. Zell’s statement is so wrong on so many levels that you have to wonder if this guy has any idea what he bought, not to mention if the reporters at the Washington Post have any reporting skills and knowledge of the Internet.

Let me count the ways this statement is wrong:

  1. Google doesn’t steal anyone’s content. Nope, they take a very short amount–around 200 characters including spaces–on Google News.
  2. You can opt out of Google News AT ANY TIME.
  3. Google News has NO ADVERTISING ON IT!

Additionally, even if Google didn’t let you opt out their use of 100-200 characters on Google News:

  1. That has no impact on Google’s bottom line–they make their money from people running Google Adsense on their websites and Google’s own sites.
  2. That only sends more traffic to newspapers–making them more money.
  3. Google doesn’t sell display advertising on their site, so advertisers ARE FORCED to spend their money on the newspaper’s site.

If Sam Zell is the future of the newspaper industry then the newspaper industry is dead–you heard it here first.

Additionally: Shame on Frank Ahrens and Karl Vick of the Washington Post for not pointing out these VERY OBVIOUS FACTUAL ERRORS. Really guys–your job is correct people when they make huge incorrect statements like this–not plaster them in the Washington Post.

Google is not the problem with newspapers–Google is part of solution. If you want to point out why newspapers are failing look at:

  • a) the huge overhead at newspapers
  • b) the legions overpaid middle and upper management at newspapers
  • c) the slow pace of innovation at newspapers
  • d) the inability of newspapers to sell online advertising when compared to web companies
  • e) the inability of news organizations to evolve their one-way medium into a two way medium which draws in a new generation which craves interaction and debate
  • f) the inability of newspapers to compete with Craigslist

Frankly, many newspapers deserve to die. If they can’t adapt who cares–a new group of publications and communication devices will rise and fill the void.

End Rant.

  • http://mikeabundo.com/2008/12/09/tribune-co-ceo-is-an-idiot/ Tribune Co. CEO is an Idiot | The Mike Abundo Effect

    [...] me take you back to April 2007, with this gem of a quote from Zell: If all of the newspapers in America did not allow Google to steal their content, how profitable [...]

  • http://mikeabundo.com/ Mike Abundo

    And now Zell’s company is bankrupt. You called it, Jason.

  • http://www.shootingatbubbles.com/index.php/2007/04/07/newspaper-industry-the-art-of-treading-water/ Newspaper industry – the art of treading water — Shooting at Bubbles

    [...] don’t very often agree with Jason Calacanis but his post today over the uproar created by billionaire Sam Zell when he equated Google News with thievery pretty [...]

English Bulldog

Hello, my name is Jason. Welcome to my blog on the interwebs. You can reach me on twitter @jason and by email at jason@inside.com. My Skype is jasoncalacanis, and my mobile phone is 310-456-4900.

I only pick up numbers I recognize, and in terms of emailing me, the best strategy is to write short, blunt and to the point requests. I can quickly respond to short messages, and many times I simply don't have the time to read five page pitches. In terms of taking meetings, I only do that after reviewing an actual product (not a business plan). So, the best time to ping me is when you have mockups or an alpha site. I don't read business plans, and I've never written one.

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