Back around the New Year I flagged for future comment this passage from a Wall Street Journal piece about what to expect in the year ahead:
“The first thing to expect in 2006 is Google or Yahoo will buy a major content company — such as a movie studio,” says Rishad Tobaccowala, chief innovation officer at Publicis Groupe Media, a division of an ad holding company that seeks out advertising opportunities in new media. “At the very least they will do some similar combo with a studio where they buy a 10% to 15% stake, much like the way [Google] has structured its deal with Time Warner” to buy a stake in AOL. “What Google and Yahoo need is content.” |
With all the respect due to anyone who bears the title Chief Innovation Officer, I must say I find this forecast incomprehensible.
Google and Yahoo have both built fantastic businesses by not assuming the costly burden of paying people to produce content but instead (in Google’s case) leveraging the information everyone else on the Web creates in building links or (in Yahoo’s case) leveraging the content provided by other companies and the attention of the people who use its services. Both Yahoo and Google have prospered by not paying for content. Why would they want to change that? Why should they? For their own egos? Because Hollywood needs an exit strategy?
Now, it may irk me that Yahoo News, which employs a skeleton crew of editors to repurpose the efforts of editors and writers at other outfits, has become the traffic-king of Web-based news — or that Google News, which employs an even cheaper crew of algorithms, is another contender for the crown. Those of us who’ve labored in the trenches trying to produce real original Web content may well feel some sense of pained injustice at that outcome. On the other hand, it’s undeniable that first Yahoo and then Google saw and savvily exploited a gigantic business opportunity that we old-media transplants, with the “content is king” mantra echoing in our ears, missed.
So, while Yahoo is indeed gently dipping its toes into original-content waters, I will be very, very surprised if it dives in head-first and buys a movie studio or other old-school content producer in 2006. And I think the odds are even more fantastically against Google doing so. Google looks like they’ll be very happy for everyone else to keep producing content; the prize their eyes are on is serving as a central broker for the advertising that supports said content.
2006 has a long way to go, but it will be worth checking back ten months from now to see where we came out.
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