Peter Kafka

Recent Posts by Peter Kafka Was a Huge Win for the New York Times. But Not as Big as Its Ad Problem.

In 2005, concerned that its lucrative help-wanted ads business was being destroyed by the Internet, the New York Times placed a hedge: It put less than $5 million into, an online jobs service.

Seven years later, that turned out to be a lottery ticket. Japan’s Recruit Co. is buying Indeed for something like $1 billion, and the Times ended up netting more than $100 million on its investment. That’s a huge return — the kind that venture capitalists pray for, and that big media companies almost never get.

That’s the good news.

The bad news is that even that return won’t plug the hole left by the Times’ vaporized jobs ads.

In 2005, the Times was generating $189 million from help-wanted classifieds. By last year, that business had shrunk to $34 million.

Nearly every newspaper in the U.S. has a similar story to tell — Google, eBay, Craigslist and the rest of the Web destroyed the high-margin classifieds business. But sometimes it’s a good reminder to see it in chart form anyway:

(Data: Company reports.)

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work