Approval of the president, Congress, and the media is dropping rapidly amidst widespread partisanship and opinion journalism that masquerades as news. With an electorate clamoring for change, it would seem that reforming the nation’s rapidly-consolidating
Approval of the president, Congress, and the media is dropping rapidly amidst widespread partisanship and opinion journalism that masquerades as news. With an electorate clamoring for change, it would seem that reforming the nation’s rapidly-consolidating media landscape would be a logical place to start.
But just as a healthy fourth estate with a diversity of viewpoints is most in demand, minority media ownership is in short supply – falling 70 percent in the past decade. And the great promise of new media–namely the Internet–as a counterbalance is threatened with monopoly control by dominant search company Google.
The challenge cannot be overstated. African Americans own less than 3 percent of TV and radio stations, and Black-owned newspapers have dwindled from a zenith of about 250 in the 1950s, to today where not a single one publishes on a daily basis.
While a spate of much-needed reforms address minority broadcast ownership, the reality is that most news, video and radio is moving to an Internet economy. Earlier this year, for example, the San Antonio Informer –a Black-owned newspaper–shut down its printing press and instead has decided to put all its eggs in the basket of the Internet economy. Others are doing the same: advertisers spend $20 billion for online ads each year. Soon, revenues for Web advertising will outstrip those of broadcast TV.
But there is a potential show-stopper for minority publications – and nearly everyone else–if colossuses like Google can effectively merge with Yahoo! and create a monopoly in the online advertising business. And if the Justice Department rolls over and plays dead on this, despite marked evidence that it violates antitrust laws, publishers and consumers will pay an exacting toll.
Today, Google owns 70 percent of online advertising revenue; Yahoo! owns 20 percent. Google and Yahoo! both earn their revenues by brokering ad deals between advertisers and Web site publishers, and by generating “banner” ads for search engine queries. A monopoly bottleneck in this space would literally destroy the marketplace and leave a lot of wreckage in its wake.
One recent study by the independent group SearchIgnite said the Google-Yahoo! merger would raise advertising prices by 22 percent. By dramatically increasing marketing costs for everything from clothing, airfares and electronics, this deal will wreak havoc on all goods and services that touch the Internet. More important for minority publishers is how this merger would give a Google monopolist the power to use our Web real estate for prices below fair-market value.
In effect, the merger that would give Google 90 percent market share could make it a Web gangster of sorts, able to extract unfairly high prices from advertisers and free to use Internet publishing space on unfairly cheap terms under a “take it or leave it” agreement. The monopolist would make out like a bandit, but everyone else loses. According to news reports, Yahoo! stands to gain $450 million from agreeing not to compete against Google, revenues sure to come directly from the everyday users of the Web.
The resulting decrease in publisher revenues could mean the difference between a proverbial “obituary notice” lamenting the demise of yet another publication unable to make it in the Internet economy, or a “birth notice” for smaller newspapers looking for a place to grow their business and provide the diversity of voices that is so badly needed in today’s media dominated by partisan bickering, triviality and talking heads.
Recent research suggests that the publishing industry is divided on the ability of the Internet to sustain their 20th century business models. While some fear the sands shifting under their feet, a recent Pew Research Center study finds 43 percent of newspaper editors believe “Web technology offers the potential for greater-than-ever journalism and will be the savior of what we once thought of as newspaper newsrooms.”
But one thing that is clear is that a competitive Internet economy, without a combined Google-Yahoo! entity that consolidates control of search and online advertising, is essential if the future of Internet news, diversity of content and commerce on the Web is to look bright.
Karen Love, Publisher of the Michigan Front Page, is First Vice Chairwoman, National Newspapers Publishers Association.
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