Why newspapers are screwed by Google?

I think newspapers are screwed by Google or by Web 2.0. In terms of content generation, they simply cannot compete with the great unwashed herd of people like me. And when access to this content is very simple via google reader, facebook or mobile phones, then one wonders why we need newspapers. I dont even buy a newspaper any more! See here for a previous essay.


Famous former Wall Street internet analyst Henry Blodget reckons "newspapers are screwed". Is he right?
August 16, 2007 1:30 PM
There is an interesting little debate going on, started by a post from the famous former Wall Street (Merrill Lynch) analyst Henry Blodget: Running the Numbers: Why Newspapers Are Screwed (see here). Blodget looked at The New York Times and reckoned that although going online reduced costs, compared with printing on paper, it reduced profits even more.There were some interesting responses, particularly one from Seamus McCauley at Virtual Economics on Why newspapers are not screwed (here). The gist of it was that as more papers went bust, the survivors would become more valuable. "If most news publishers are to fall by the wayside, the market in which those remaining operate will be very different."Now Blodget has fired back with The Great Advertising Share Shift: Google Sucks Life Out Of Old Media at his Silicon Alley Insider. He points out that online advertising revenue at the big four (Google, Yahoo, AOL and MSN) is up by 42% while "US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc) shrank by $280 million in Q2, or 3%." (He's also published his spreadsheet.)"Traditional media executives are doing a superb job of milking cash flow out of shrinking businesses, but you can't save your way to prosperity," says Blodget.Perhaps the situation is even worse than Blodget thinks. Newspapers are responding to the decline of print and finding new markets by going online: The Guardian has done that very successfully. But as Jakob Nielsen pointed out in my interview last week, Google "takes a big percentage of the money. The web is a web, and that is good, but companies invest a lot of money in creating content, and the money goes to Google for indexing it."If it wasn't Google, of course, it would be Yahoo, MSN or some other search engine site. Google is more of a problem not because of what it does, exactly, but because it's so damned good at it.So, are newspapers really screwed, and if so, what could we do about it?

All this to be taken with a grain of piquant salt!!!