Cost-cutting Google Scraps Newspaper Ad Program

[NashVegas]

Source: Wired / AP

SAN FRANCISCO (AP) -- Google Inc. is giving up on selling print ads for the ailing newspaper industry, ending a 2-year-old attempt to extend its dominance of Internet marketing into another medium.

The retrenchment announced Tuesday is part of a cost-cutting campaign aimed at boosting Google's profits as the deepening recession eats away at Google's bread-and-butter business of selling ads on its own Web site and thousands of other Internet destinations.

...

Under the program, potential advertisers were allowed to bid online to fill unsold space in the participating newspapers, leaving it up to publishers whether to accept the offers.

But Mountain View, Calif.-based Google concluded that its online expertise wasn't paying off in print, prompting management to pull the plug on its newspaper program effective Feb. 28.

The decision affects about 800 U.S. newspapers, up from the 50 publications that had initially enlisted Google's help.

Read more: http://news.wired.com/dynamic/stories/G/GOOGLE_NEWSPAPERS?SITE=WIRE&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2009-01-20-20-29-30

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My first thought was, "oh this isn't good," but am not so sure on second glance. Newspapers need to help local businesses thrive for everyone to benefit; I'm not sure it's beneficial for anything but the paper's short term bottom line to run a generic print ad for a national, when a local business can place an ad for a specific store / sale.

[ogneopasno]

1. Believe me, newspapers aren't turning down local ads to run google ads. NO ONE is advertising.

[tridim]

2. Pepsi sure as hell is.

At least they are on MSNBC.

[ogneopasno]

3. I wasn't clear; I was speaking hyperbolically and was thinking of local main-street businesses.

[NashVegas]

4. They've Got To At Some Point

Or they won't have a business. You've got to let people know what you're offering.

Businesses that won't survive the current climate are the ones that have been getting by on credit and no rainy day fund.

[ogneopasno]

5. Yup, that's true. But advertising is cut before a lot of other things are. Or they advertise

in other venues, or scale way back. The point I was making, though, was that it's not like newspapers have X amount of ad space and they sell it to whoever comes first or pays the most.

[NashVegas]

6. I'm Starting to Think What's Going To Have To Happen

Is corporate media outlets are going to be forced to get out of the business; they can't continue to pay stockholders AND production staff AND sales staff AND administration AND still have a business. Look at what happened at Clear Channel yesterday. Radio stations right now are selling for 1/2 of what they were a couple of years ago. That needs to come down a bit more, but it will happen as the properties devalue to ever-declining audiences.