In 1998 when Google Inc. (NASDAQ:GOOGL) was in the initial steps of starting up, its co-founders Sergey Brin and Larry Page had invited the vice president of Washington Post to invest in the company. The newspaper was at its peak at the time and its vice president of the time Ralph Terkowitz didn’t think much of the offer and declined. This was definitely one of the worst calls made by Terkowitz.
Washington Post declined by saying that it had already made investments in other fields. However, decades later, Google today is one of the most popular and successful companies in the world. It can safely be said that turning down Google was probably one of the biggest mistakes made by Washington Post.
With the ever increasing popularity of the internet and web based companies print media has suffered a lot – it is just falling behind digital media. Thanks to handheld gadgets, laptops and PCs People find it easier to read news online that is why a lot of advertisement companies have moved to the web rather than print media; these companies get more profits and a wider range of target audience that print media can’t even dream of providing. Companies like Google and Facebook are the favorites of advertisers because of their popularity among users.
Analyzing the change in the market and because of the growing digital market, many newspapers have opened up online websites as well. But even going online hasn’t really done them much good because of the huge competition. It is a struggle for newspapers to hold their ground on the net. As mentioned earlier these news papers are losing their audience to Google and Facebook and due to lack of advertiser’s interest online survival for newspapers have become even more of a challenge.
During the 1990’s when print media was popular, Washington Post made profits of $120 million as opposed to the $40 million losses that the newspaper is facing today.
In the year 2000, the total revenue generated by newspapers in the U.S was as high as $63.5 billion, which is a huge contrast from the 2013 revenues that were as low as $23 billion. One of the main reasons for this downfall was that back in 2000 advertisers were willing to place ads in newspapers as they were widely read all across the country but now the trend has drastically changed. Digital media has taken over print media. Google and Facebook have taken advertisement to another level; they have made it much more targeted with the help of different tools and widgets, something newspapers can never do. As a result of this advertisers can target the right audience with more ease and accuracy through these sites.
What really must hurt the newspaper industry is the difference in ad revenue generated by Google Inc. (NASDAQ:GOOG) and newspapers. In 2013 Google’s revenue through ads was around $50 billion mark whereas newspapers could only reach somewhere between $20 and $30 billion mark.
Washington Post cannot turn back time and take its decision back of not investing in Google. How the newspaper industry will get itself out of this decline will be something very interesting to see.
