Google’s Secret Plan to Save Newspapers: Sell More Expensive Ads

Google isn’t killing newspapers, says The Atlantic’s James Fallows. In fact, it’s trying to save them.

I’m with Fallows on the first point. Not convinced at all about the second one, but Fallows is, and he spends many pages explaining Google’s reasoning and plans.

Short version: Google thinks newspapers are good for Google, because they generate information people want to search for. And when newspapers stop printing actual newspapers and start selling online ads for as much money as print ads, everything should work out fine.

In the longer version, Fallows walks readers through the basics of the newspaper crisis (disappearing classifieds, disappearing display ads, disappearing subscribers). And he touches on some tinkering Google (GOOG) is doing that might be useful for publishers and news organizations (Living Stories, Fast Flip, YouTube Direct, help build pay walls).

That stuff won’t matter, though, unless newspapers can cut a lot of costs and make a lot more money from online ads.

Part of the cost-cutting is kind of easy, because it will happen whether papers like it or not. Their print product will eventually wither away, and they’ll save a lot of money on paper, ink, delivery trucks, etc. And part of Google’s growth strategy hinges on more money flowing into online display ads. If Google is right, some of those dollars will flow to publishers, so that’s good.

But assuming that online ads will be as valuable, per eyeball, as offline ads have been is a very big leap of faith. And unless they’re close, there’s no way a news organization can have anything like the workforce it employs now–even if the entire operation is digital.

This line of thought leads us to a dark place that we’ll probably be visiting anyway, so let’s not leave on that note. Let’s try Fallows’s tempered optimism instead and hope he’s right and I’m wrong:

The problem Google is aware of involves the disruption still ahead. Ten years from now, a robust and better-funded news business will be thriving. What next year means is harder to say….If the prospect is continued transition rather than mass extinction of news organizations, that is better than many had assumed. It requires an openness to the constant experimentation that Google preaches and that is journalism’s real heritage.