Sam Zell vs. The Future

Billionaire takeover artist Sam Zell has a problem. It has nothing to do with the financial structure of his proposed takeover of the Tribune Co., or the fact that he openly admits to knowing next to nothing about the newspaper business. No, Zell’s problem is that he seems to be fundamentally opposed to the one thing that could save newspapers like the LA Times.

Speaking to a group of Stanford Law School students last week, Zell asked rhetorically:

“If all the newspapers in America did not allow Google to steal their content for nothing, what would Google do, and how profitable would Google be?”

While Zell claims he doesn’t know much about the newspaper business, he’s off to a good start in thinking like an old-school newspaper man.

As newspapers around the world face declining circulation numbers their challenge is to transition their business online in a manner that allows them to maintain journalistic integrity while remaining profitable. Threatening to prevent search engines from indexing your content is not a good first step.

Traditional print metrics like daily circulation are being replaced with web metrics like total page views and unique visitors. Theoretically a newspaper should see its revenue increase as its web traffic increases.

So how do newspapers increase their web traffic? By ranking well in search engines like Google, of course.

To suggest that Google is somehow stealing content from the LA Times is simply ludicrous. On the contrary, Google is providing a service to readers by aggregating stories, and a service to newspapers by driving large amounts of traffic to newspaper websites.

Something tells me that Zell has never actually used Google News. If he had he would notice that they never reprint full articles and that all story summaries are linked to the original source.

As for his claim that Google’s business model would not be so successful if they weren’t allowed to freely “steal content” from newspapers — well, you only have to look at Google News to realize that Google isn’t currently selling ads on those pages.

Zell is not unlike the publishing industry executives who insist that services like Google Book Search are violating their copyrights, while failing to realize that Google has essentially created an entirely new sales channel for books — one that just happens to be more efficient and effective than any sales channel ever known to the publishing industry.

If Zell continues to insist that Google is ripping off newspaper content there’s a simple solution that he can easily implement when his takeover of the Tribune Co. is complete. He can instruct his interactive team to add an exclusion for the Googlebot to the robots.txt file on the newspaper’s website. With that one small change Google will no longer index LA Times content.

After doing this Zell should keep a close eye on the LATimes.com daily traffic reports. It’s almost certain that such a move will lead to a plummet in the number of total readers and page views. Not to mention a corresponding decline in advertising revenue.

If the LA Times is going to survive the paper needs an owner who understands the intricacies of publishing in the 21st century. From the looks of it, Sam Zell may not that be that man.