Is Google the New Media Mogul?

This month, Google (Nasdaq: GOOG  ) will sponsor a two-story headquarters for bloggers at the Democratic National Convention here in Denver. It's planning a similar setup for the Republican convention in September.

Does anyone else find this fascinating? To me, we're watching a new-media mogul in the making. Traditional media outlets own permanent facilities, employ legions of reporters, and control the content. In fact, control is the key. News Corp. (NYSE: NWS  ) CEO Rupert Murdoch was frequently skewered for his reputation for editorial overbearance in the months before his firm completed a $5 billion bid for Dow Jones.

Contrast that with Google's plan. It's the George "yes, I will do opposite" Costanza model -- one that exerts little control over the medium and none over the message. Reporters? Who needs them? Or it would seem to Google, which is so disinterested in establishment thinking that it refuses to give Wall Street quarterly or annual earnings guidance.

Political profits
At the DNC, Google's facilities will include room for roughly 500 bloggers, access to its software and services, and a kiosk in the main tent for posting YouTube videos, The Wall Street Journal reports.

How will DoubleGoo profit? Think of the ecosystem. A writer who uses Blogger, posts video on YouTube, and takes care to include popular search terms in his content will create value in two ways:

  1. AdSense. Google's ad-revenue sharing network doesn't make much, but it has thousands of users. Every blog post -- and you can bet there will be thousands, perhaps tens of thousands -- is an opportunity for DoubleGoo to earn pennies.
  2. AdWords. We know from Google that well-placed content in Google News leads to search revenue; $100 million worth at last count. Every lucid post and controversial YouTube video will draw searches. More searches equals more moola.

If it helps, think of Google co-founders Larry Page and Sergey Brin as the Trumps of the digital domain. They're building an empire of content, software, and services in the cloud; digital real estate monetized with ads.

Meanwhile, back in the newsroom...
How will traditional media profit? In spurts, as it always does. The major news dailies from Gannett (NYSE: GCI  ) , New York Times (NYSE: NYT  ) , and McClatchy (NYSE: MNI  ) will produce special sections that will draw ads, as will some of their custom online content. Yet they face two limitations. First, Google will be serving some of their ads. Second, Big G's low-cost blogger army could be at least on par with their full-time staffs.

Similarly, CBS (NYSE: CBS  ) , General Electric's (NYSE: GE  ) NBC, and Murdoch's Fox News will have timeslots for DNC coverage that will be monetized with ads. But if history serves, we'll only be watching when the big speeches are given. And even then, most of the content will be stuff we've seen before, yawner after yawner.

Gootube could add spice to an otherwise bland setting. Vloggers will be giving us the view from the floor, as well as the gaffes and unintended "Macaca" moments -- stuff the networks will need to spice up their own coverage. What will they link to? YouTube. Once again, more searches equal more moola.

New media needs a new mogul
I'm not arguing that Google will replace traditional media outlets. There will always be a need for authoritative, in-depth coverage of major news events such as the Democratic and Republican National Conventions.

But if we're honest, we'll admit that what we really want is a return to the conventions of the 1950s and 60s, where floor frenzies were common. We want unfiltered content. We want what the networks won't provide, because they can't.

Thus, we need a new news mogul. One that thumbs its nose at Marshall McLuhan and eschews control over the medium and the message. We need Google and its blogger army, and we'll give our ad-viewing eyes to get it.

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Fool contributor Tim Beyers owned shares of Google -- and Google's 2010 LEAP options -- at the time of publication. When not typing up articles for Fool.com, you'll find him picking growth stocks for Rule Breakers, which counts Google as one of its holdings. Get access to all of his writings here, or enjoy a daily dose of his Foolishness via this feed for your RSS reader.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 21, 2008, at 6:48 PM, dormroomrecipes wrote:

    News is reported by keywords. Keywords are the revenue platform for Google. Google just needs more "deep dish" revenue partners - in the news/search business -- and I think Barry Diller, now with cash in his pockets, is going to deepen its partner agreements with Google to share a bigger slice of the "news/search" pie. Here's how.

    Do a Google "news" search for IAC businesses: ask.com, evite.com, match.com, bustedtees.com, 123life.com, thedailybeast.com, zwinky.com, dictionary.com, reference.com, garagegames.com, -- and my favorite, "pizza.com" (the latter not yet on record as an IAC property, but IMHO, is one or will soon become one). Keyword searched in Google news, "my" results show an "1842" archive arrow - which when clicked upon - or not - at the top an additional "click" titled

    "View all web results for info:match.com" which when clicked upon gives you additional, refined search results and links as follows:

    Match.com - Find Singles at the World's Largest Online Dating ...

    Personal ads with photos, anonymous email, advice and date ideas.

    www.match.com/

    Google can show you the following information for this URL:

    * Show Google's cache of match.com

    * Find web pages that are similar to match.com

    * Find web pages that link to match.com

    * Find web pages from the site match.com

    * Find web pages that contain the term "match.com"

    Now all Google has to do is "educate" the masses -- or at least "college students" on how to search using "Google news" -- a "filtered search" - of sorts. How might Google do this? Pizza. College kids exist on pizza. Everyone loves pizza and knows what pizza is. Pizza gets our attention. Think Android mobile phone OS, free pizza, and, of course, IAC's "local" CitySearch. It's not just about Adwords and Adsense. It's about pizza -- owning the living room, the dorm room, sports and Superbowl -- the largest selling pizza day of the year - an advertising mecca. Google "news" is going after "Pizza Pilgrims" -- you and me.

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