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Monday, November 06, 2006

Can Google Save The Newspaper Industry? No.

Stocks: (NYT)(GOOG)

Google is beginning a test program with large newspapers. Local advertisers who use Google's AdSense text ad program, which makes up almost all of the search giant's revenue, can extend their AdSense buy to newspapers to pick up a largest audience, and, in theory, most customers.

The problem is that newspapers, as a print medium, cannot tarket audiences with the laser focus that AdSence can. And, local newspapers are already running a large number of local classifieds. But, that business is dropping sharply. It is going away for two reasons. One is that internet sites like CraigsList and CareerBuilder are more efficient at getting leads. The other is that newspapers are losing their circulation, mostly to online news sources. As circulation drops, ads become less effective.

Selling more ads, even it the appear to be targeted, into a dying medium, is not going to solve the core problems that newspapers face. They don't work for advertisers anymore.

Now, if Google would step up its program to target ads to the newspaper industries online websites like, that might help large paper chains a great deal.

And, it would make sense. AdSense?

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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