A change in Google's algorithm can affect both small businesses and news websites

For some small businesses, a Google search results page is like the shelf of a supermarket. Companies are always trying to find ways to make their product stand out amidst the plethora of brand names with similar products. To get to the top of a Google results page requires the content of a website to be relevant, and to feature words, or words similar, to the searched terms, especially with the use of tags. However, in an effort to reduce spam, Google released an update in their search result algorithm, but this new update can have severe effects on website discovery and their businesses that rely on this system. 

In an article by PR News, the new algorithm is said to focus on new and fresh content. This can have a serious effect on news websites who rely on using recycled content. Websites that aggregate news content from other sources, such as from the Associated Press, may find it more difficult to reach the top of the results page as the material can already be found elsewhere either in whole or partial form. For small businesses, this means that press releases must consistently find new ways of spreading their messages, which can be difficult, especially for much smaller companies that do not have much news happening. 

Google says that it is using this update as a tool to fight spam and low-quality material in their searches. While it may motivate individuals to provide higher-quality material, it also prevents people who are incapable of consistently creating their own content from being found. Most small businesses do not have the budget for a dedicated public relations agent who can focus on the distribution of content, just as news websites do not have the budget to send out a reporter for every story. 

As mentioned in the same article, this forces businesses who cannot afford their own public relations to purchase advertisements on Google to become more visible, a move that some businesses may not even be able to afford. Is this move by Google beneficial for searchers who want more relevant results in their searches, or will this hinder the visibility of smaller websites? 

Print Media says "I am still quite alive!"

Warren Buffett

Huff Post on 5/17/2012 reported that a legendary investor Warren Buffett, also known as the “Sage of Omaha,” has agreed to purchase 63 newspapers for 142 million dollars. They were purchased from a financially troubled company called Media General Inc. of Richmond. In this merger, the 63 newspaper properties will joinhttp://www.omaha.com/article/20120517/NEWS01/120519629 Buffett’s company Berkshire Hathaway in combining with its existing newspaper publishing branch, “Omaha World-Herald Corporation,” the primary daily newspaper of Nebraska.

Observing the current rise of the tablets and e-readers and availability of information out-of-paper, it seems only natural to question the motives behind his bold decision, and one might ask just exactly what drove him to make this “risky bet” of investing his wealth in the declining print media. Electronic forms of reading apparatus are replacing paper and numerous recent research studies show that number of paying readers is declining every year and will continue to do so in the future. The overall trend is evident: print journalism is dying. Could this mean that the “Sage of Omaha” made a critical mistake with his investment?

Who reads newspaper in print forms nowadays?

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Rather than thinking it a mistake, Buffett shows much hope and faith in the future of newspaper industry. While admitting the big newspaper companies such as The Washington Post or The New York Times will continue to battle against each other in paper and on-line competition, he asserts that in towns and cities “there is a strong sense of community,” and “there is no more important institution than the local paper.”

Terry Mattingly, the director of the Washington Journalism Center, is one of many who shares Buffett’s opinion and sees Buffett’s investment as a profitable opportunity rather than a mistake. In what Mattingly calls “the Wal-Mart country,” he describes that the larger newspapers are receding due to competition and the smaller papers will survive because they can still carve out a niche for themselves. He views Buffett’s strategy as targeting of the “niche markets” and as a safe bet.   

Buffett’s bold investment shows that the print media is far from dead. It is true that the digital age has changed the meaning of readership from a traditional sense. Moreover, a large percentage of our population is no longer passive readers, but active participants who readily express their thoughts on various issues and even communicate with the journalists through digital social media such as Facebook or the newspaper-website platforms. However, even with this trend, this does not necessarily indicate that the print media has no hope. For one, as shown above, the traditional feel and sense of neighborhood will remain with the local papers and community news. Trends may shift, but both the print media and digital journalism will flourish by those who have faith in the newspaper industry as the independent Fourth Branch of the government. As Buffett says, the fundamentals don’t change.

The New York Times, a financial basket-case?

The New York Times is often thought of as one of the largest news organizations in the United States and is also the current record holder for taking home the most pulitzer prizes as well.  Since the early days, circulation of newspaper print has been the bread and butter of most newspaper organizations for financial revenue.  Evidently, with the mass transition into the digital medium, digital media and the news has taken the market by storm, reducing potential revenue of physical print circulation. This lead to financial set backs that inevitably lead to massive debt, with one of the creditors being Carlos Slim.  The New York Times has cut back on many sub-divisions within the company such as selling Regional Media Group to dig its way out of debt.

The interesting part of this story is that the New York Times was able to pay back their debt with Carlos Slim three and a half years early which saved them a quite bit of money from accruing interest. In class, we talked about the significance of Google's allocation of ads in their search engine. It accounted for the majority of their annual revenue, and even more so after they developed specific algorithms to help narrow down and personalize an individual's search results with corresponding ads.

As shown in this image of Google's financial ledger for 2009, nearly 97% of their gross annual revenue came from advertisements.

Just like Google, The New York Times attributed much of their revenue from ads. With the growing popularity for digitized media, it is hard to imagine paper print circulation having any chance in the consumer market. This transition into the digital media scape could lead to large news corporations like the New York Times to lose paper circulation revenue and establish an inverse ratio with ad revenue right? Surprisingly, that is not with the New York Times. While print circulation is on a steady increase by increments of three percent a year give or take, ad revenue is slowly declining by the same amount respectively. Although the company is barely holding its own financially, especially with the five year news depression, it's able to "tread water" for now. There are some interesting points here in regards to why circulation of print news is slowly rising with ads declining every year. Some students in class stated that reading something on a machine or device is a difference experience from reading a physical paper. Although a highly subjective case, it may be what's keeping the New York Times afloat.