Google Gives Up on Print Ads... What Goes Next?
Google yesterday put the kibosh on its two-year-old program to sell ads in newspapers such as The New York Times, The Los Angeles Time and The Chicago Tribune, among others.
Marked for death Feb. 28, Google Print Ads started with 50 newspapers in November 2006 and grew to as many as 800 newspapers in the United States.
In the last few months, we've been taking a long, hard look at all the things we are doing to ensure we are investing our resources in the projects that will have the biggest impact for our users and partners. While we hoped that Print Ads would create a new revenue stream for newspapers and produce more relevant advertising for consumers, the product has not created the impact that we -- or our partners -- wanted.
Let's mull this one a bit. Print advertising has been on the decline for years, gouged by online advertising. We're in a recession that is only worsening. Is anyone surprised that a Web services giant would excise a marginally important ad program?
Don't take it from me. Reuters notes that print newspaper ad sales were $42.2 billion in 2007, down from a high of $48.7 billion in 2000, according to the Newspaper Association of America, and quotes an analyst:
You can see even someone who is a pure-play newspaper company is finding it difficult to survive in this market, and for Google, there were no near-term material revenue opportunities, said Sandeep Aggarwal, an analyst at Collins Stewart LLC who covers Google.
While a spokesperson for The New York Times told Reuters the revenue stream from Print Ads was small, the California Newspapers Partnership, which includes more than 30 daily newspapers owned by the MediaNews Group, Gannett and others, told the Times that it got good business out of it.
Ironic? Not really. Sometimes one man's garbage is another man's treasure.
So the plan failed, not because it was poorly drawn or executed mind you, but because the online ad market is shriveling like cellophane in a microwave. That goes for search, too, according to this piece in Dow Jones. Google clearly looked at Print Ads as a piece of the "dark matter" CEO Eric Schmidt talked about purging.
Indeed, the move comes less than a week after the search giant shuttered several Web services, including Google Video and Google Notebook, and a day before the company is expected to report fourth quarter earnings.
My question is: What's next? Google is clearly showing us what isn't making money for it, but I'm willing to bet there are a whole lot more projects it could close to save money and engineering resources.
The Times noted Google Radio and TV ads are on more solid ground. Definitely true for TV, but radio? Eh. I wouldn't bet on it.
What is immune and what isn't? Last week, I and others suggested expert advice site Knol could be a target, and magically Google blogged about having logged 100,000 posts in Knol. Seems to me the search stuff is immune.
I'm sure Microsoft would love to see Google excise Google Apps, but that won't happen. It may not make Google much money, but Google Apps and rival SAAS platforms are the future of computing.