Shut Off Google? C’mon, Mark Cuban

February 8, 2010
Category: Uncategorized

I can understand why Mark Cuban said newspapers should keep “blood-sucking vampires” like Google from indexing their content. But his argument falls short in a few key ways, I believe.

Cuban said newspapers have to understand that there is real value in what they do best, which is to “go out and find news and create good content.” “Aggregators and search engines think there is no value to that,” the Internet entrepreneur, HDNet co-founder and owner of the Dallas Maverick basketball team said at the OnMedia conference in New York last week. “They think there’s an unending supply of necks.”

If publications shut off their sites to the Google spiders, Cuban said, people who can’t find that content via Google search or Google News might simply type “Forbes.com” or “NYTimes.com” in their Web browsers. He implied that if the great news brands refuse to be indexed without compensation, aggregators eventually would have to pay them to get their material.

One problem with Cuban’s argument, though: There is a nearly unending supply of “necks,” to use his analogy, for aggregators and search engines. Even if newspapers close off their sites to Google, their content will be found elsewhere, on other sites that pick it up under fair use.

True, there are great news brands that people may find even if they’re not in search results. But there are also many growing brands that are pure Web plays and have learned how to make a profit while using aggregators to their advantage. They have structured their businesses for the Web. If other news outlets remove themselves from search, those Web-native companies will use the opportunity to capture more of the traffic.

Cuban said that once a newspaper removes itself from search and aggregation, “The worst thing that can happen is you turn ’em back on” and resume indexing. But in my experience, once you turn off a spigot of traffic in digital media, it takes time — often much more time than it took to lose the traffic — to restore the previous level.

He also said that people who come from search and from aggregators don’t “convert” to sales, likening the situation to a restaurant where a lot of people walk in and out but nobody sits down and buys a meal. But is the answer to move the restaurant to a back street with less foot traffic?

Or should those restaurants find a way to entice those passers by to sit down and buy a drink or dessert, maybe even a meal? Or if that doesn’t work, to give away a little food and entice them to pay for something else that will make their visit more enjoyable and make them want to come back and buy again?

In digital media, unlike in a restaurant, the incremental cost of serving one more customer is essentially zero. If you can convert even a fraction of those visitors, you can help support the business.

Rather than block Google’s access, newspapers need to use that traffic to create multiple revenue streams that incrementally add up to profit. They need not just exclusive content that people will pay for, not just ad spots that squeeze out as much value as possible, but also other revenue streams — whether apps or events or, yes, going from Web to print. They will have to constantly adjust price points and subscription mixes, as The Wall Street Journal has done and continues to do.

I asked Cuban after his speech what he thinks of such a model, which some call “freemium,” in which you give away your content to, say, 95 percent of visitors and have the loyal 5 percent cover costs through subscriptions and other revenue streams. In such a business, you would want to attract as many potential customers as possible; the more visitors, the larger the fraction who will pay.

Cuban told me that it doesn’t work — and seemed to peg his answer on advertising. “The only time it really works is if you just happen to hit a vein, and you just happen to be the hot content,” Cuban said. “But more often than not, particularly on the Web, you might be hot for awhile, and the advertising might be hot for awhile, but then someone else can come in and do it a little bit cheaper, and it’ll be a little bit harder.”

Well, that’s business, Mark, whether you’re selling media or cars. You have to differentiate your product and your brand, and create at least the perception that you offer something different and valuable. It may not be easy, and it’s certainly not an easy adjustment for news organizations that came to rely on wire services mixed in with ads. But it’s hard to see another way.

There may be one set of tools that will help Cuban’s cause. Social media like Twitter, Facebook and others are starting to challenge Google as recommendation engines. As more traffic comes to news sites via social media and less through search, it is possible that publications online can balance what they’d lose by not being in Google against what they would gain by being in social media.

But in my analyses, I have been surprised to find that traffic from social media is not necessarily more engaged or more valuable than what comes in from search. So while I would advocate aggressively building audience from social media, I wouldn’t stake everything on that approach without proof that it would make up for what I’d lose by not being linked by aggregators or search.