Time for Larry and Sergey to invest in journalism?
By Rob Cox and Richard Beales
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Is it time for Google billionaires Larry Page, Sergey Brin and Eric Schmidt to invest in journalism? In 2013, Amazon architect Jeff Bezos bought the Washington Post for $250 million and eBay founder Pierre Omidyar announced a new investigative reporting venture. Yet strictly by the numbers, few have made their money at the expense of the old-school pillars of the fourth estate quite as obviously as the Google guys.
In 2000, the year Google introduced AdWords, still its main advertising program, U.S. daily and Sunday newspaper advertising peaked at $48.7 billion, according to the Newspaper Association of America. It has since tumbled to less than half that level, some $18.9 billion in 2012.
The decline is widely attributed to the rise of the internet. In fact, without Google and its online rivals, print ad spending might have continued rising. At the pace of growth achieved in the decade before 2000, it would now be running around $80 billion a year.
It’s uncanny, therefore, that of the $60 billion plus of potential annual ad sales that print publications seem to have lost, Google had grabbed about $44 billion by 2012, from virtually nothing in 2000. That two-thirds slice of the spoils is about equal to the company’s market share of the online search business.
Maybe the mathematical symmetry is coincidental. But the larger point is not. Nobody has made as much money as Google disrupting the business model that once supported the edifice of journalism – an endeavour which, as Bezos put it, “plays a critical role in a free society.”
Google has long maintained that it doesn’t want to get into the business of creating content. That’s fine. But Google’s leaders, who have became fabulously wealthy individually, could still invest for their personal accounts – just like Bezos and Omidyar. If any tech moguls have reason to feel they owe it to the now cash-strapped world of journalism to give something back, it’s Messrs Page, Brin and Schmidt.