Google leeches off the media when it’s down

Here’s audacity for you: On the same day the Rocky Mountain News closes just shy of its 150th anniversary, Google is adding advertisements to Google News searches.

Google doesn’t pay to create the content, mind you;  for-profit news organizations do. But Google will get money from the ads that go beside the stories.

“Trust me on this one, this one will kick up some dust,” writes longtime Google watcher John Battelle on his blog. He referred to a “***t storm,” in fact. 

It’s a real slap in the face to newspapers that pay for news gathering resources that Google is profiting from. In this recession, Google is hurting too, so it’s going to be an ugly scene.

Here’s some important background: Google was sued by Agence France-Press in 2005 for copyright infringement just after it launched Google News.

The Paris-based agency claimed the search giant was posting news stories and photographs without permission. The two entered into a licensing deal in 2007, ending the dispute.

This time around, news groups are likely to challenge Google on a wider scale — or risk losing money out of their own pocket. It comes just as many newspapers are up for sale or threatening to fold.

Newspapers have to share the blame: I never understood why they weren’t more aggressive with Google in the first place.

Meanwhile, it’s sad to see the Rocky Mountain News close. 

My family and I lived in Denver in the ’70s, and I remember the newspaper war between the two papers. For a while, their circulation was running neck in neck. Dallas had a similar newspaper war between two strong dailies.

The loser here is the public. I encourage you to read Ben Bagdikian’s book “Media Monopoly,” more relevant now than ever. (He was a professor of mine at Cal and later an acquaintance).

Here’s the silver lining in this dark cloud: When this shakeout is complete, more competition than ever will exist. Online ventures, with professional, not arm-chair talent, will fill the void.

At least 50 union jobs cuts proposed at Chronicle

Here’s the letter sent to union newsroom workers this week at The Chronicle, Northern California’s largest circulation newspaper. The highlights:

•Guild committed to keeping paper open. 

•At least 50 Guild-represented job cuts are proposed. “Other proposals include removal of some advertising sales people from Guild coverage and protection, the right to outsource — specifically mentioning Ad Production — voluntary buyouts, layoffs and wage freezes.”

•Management reiterated its commitment to keeping The Chronicle open and to working with the Guild to secure a viable future. 

In sum, both sides seem willing to get the job done without closing the paper. The Teamsters could be a tougher nut to crack.

Here’s the First Family’s new pooch!

lg_artworkThis is news I’ve been waiting for: The Obamas are close to getting the dog they had promised their daughters during the election, and the breed is . . . a Portuguese water dog.


“Known for centuries along Portugal’s coast and prized for its strength, spirit and soundness, the Portuguese Water Dog is a loyal worker and companion,” according to the AKC Web site. “Medium-sized and robust, the breed possesses a waterproof coat and the ability to swim all day. Its coat can be curly or wavy and is black, white, or brown, or combinations of black or brown with white.”

The dog is referred to as the Cao de Agua (dog of water) in its native Portugal, according to the AKC. It also has an allergy-free coat, according to Michelle Obama. The pooch is a rescue dog too — a good call.

“Temperamentally they’re supposed to be pretty good,” she told People Magazine, according to the AP. “From the size perspective, they’re sort of middle-of-the-road: It’s not small, but it’s not a huge dog. And the folks that we know who own them have raved about them. So that’s where we’re leaning.”

The dog is expected to be in the White House on April Fool’s Day.

(photo from the AKC)

Newspaper subscriptions a bargain in recession


Golden egg: still print ads
Golden egg: still print ads

Here’s a bargain during the deepening recession: get a newspaper subscription.

I just got an offer from the Wall Street Journal for $99 for a full year.

A pitchman for The Union was offering the paper for just $39 a year in front of Raley’s on Wednesday. The Bee is offering six months for $39.

Why doesn’t some newspaper-loving philanthropist come along and subscribe to a bundle of papers at rock-bottom rates and donate the subscription to the schools? There’s a win-win. 

Though the deals are “loss leaders” for newspapers, they help pump up subscription figures to justify existing print ad rates (still the “golden egg”). This game gets tiresome, however.

Sometimes the printed news you get is a bit stale, too: “Facebook is pulling in — gasp — your parents,” reads a front-page article in today’s Sacramento Bee. 

No kidding! Or as we used to joke in newsrooms, “Have you heard about he Lindbergh kidnapping?”

Here’s a July 1997 report from Comscore showing a 98 percent increase in the number of Facebook users who are 35 or older — also representing the largest age segment of unique users.

Sometimes you have to wait for the ink-stained journalists to catch up with the digital trends.

Here’s the digital future for newspapers: The Bee also is running an online ad today that directs you to e-coupons for Raley’s.

With the e-coupons, you don’t need scissors or a printed newspaper — effectively cannibalizing the print product. Still, the newspaper is generating revenue from the Web ad.

This is a painful transition. One day, online revenue may get large enough to justify killing print — but not for a while. In the meantime, steep cost cutting will continue to offset revenue declines.

Fun business, eh?

Fond memories at the S.F. Chronicle

I’ve been reminiscing about The Chronicle this week. So many fond memories. I worked there from the mid-’80s through mid-’90s, writing and editing about energy and natural resource companies, the buyout of S.F. stalwarts such as Crown Zelllerbach, airlines such as PSA and United and the IPOs of Yahoo, Ebay and others in Silicon Valley. Among them:

•Herb Caen. My wife and I were good friends of Herb. He and I would visit daily at the office and have lunch together sometimes. Herb wrote us a thoughtful note (on his old Royal) when we were married, “Shannon, what a lovely name,” it read. We remember faxing him an item from the Albertville, France, Winter Olympics: We ran into the owner of the San Jose Sharks hockey team handing out pins at the match between Sweden and Germany. It ran the next day.

•The M&M Tavern. I was one of the youngest reporters, in my 20s, to join The Chronicle. I would join Harre Demoro, the transportation writer, and some other colleages for lunch or drinks after work. Then I’d ride the cable car home to my studio (with a futon) on Nob Hill, across from Huntington Park.

•Pacific Lumber Co. By reading SEC filings, I discovered that a Texas corporate raider was going to double the timber cut of the old-school redwood lumber company to pay off junk his bond debt. The Wall Street Journal followed the story, and credited The Chronicle, and it became corporate lore in books and a movie. Sadly, Pacific Lumber, with its quaint company town in Scotia, filed for bankruptcy later.

•George Keller. George was the chairman of Chevron Corp. He and I hit it off, and he gave me so many scoops that the P.R. people were running in circles. George’s son, Bill, is now the editor of the N.Y. Times.

•Randy Shilts. Randy was a colleague who broke the story about AIDS. He was so funny and such a professional to work with on stories. He later died of AIDS. I was glad to see “Milk” win an Oscar this week, because it was stemmed from Randy’s work.

•Labor strike. We had a labor strike when I worked there. It was sad to see non-union colleagues being bussed into work. The paper suffered. Striking workers put out a daily paper that was a free tabloid — the same business model that is popular now. I was proud of a scoop that TCI was buying the S.F. cable franchise in a multi-million deal. (A longtime friend was veteran cable guy Leo Hindery, who now is bidding on the Cubs). It ran on TV.

•Brandy Ho’s. An excellent Hunan restaurant within walking distance from the flat Shannon and I had on Telegraph Hill. It still is going strong and opening a restaurant in the East Bay. We ate there on a trip to S.F. earlier this month.

•Meeting Shannon. My wife and I met at a Super Bowl party (49’ers versus the Bengals) in Noe Valley. I had a strange haircut (the one with the angled buzz cut in the back), but she joined me for a wonderful first date. The rest is history.

•The IPOs of Netscape and Yahoo. I remember reading the regulatory filings about all the risks of the startups. It’s hard to think, from reading that sober-sounding narrative, how they would change our world.

Web coupon clippers surge in downturn

The deepening recession is leading to a surge in Web coupon clippers.

Coupon clipping has surged 10 percent in the past four months, the Wall Street Journal reports in a front-page story.

“And increasingly, shoppers are skipping the scissors and getting coupons online or having discounts sent to their smart phones and rewards cards,” according to The Journal.

Online coupon redemptions jumped 140 percent last year, the paper said, citing marketing researcher Inmar.

One mother said she saved $50 off a $120 shopping bill by jumping online before heading out to shop.

At Raley’s, for example, you can save $20 on a $100 purchase this week with an online coupon.

Will The S.F. Chronicle shut down? Nope.

images9Hearst Corp. is seeking cost savings at The Chronicle within “days and weeks” that would include “significant” layoffs  — or it will sell or close Northern California’s largest daily.

Will the Chronicle close? No, but it could lose more circulation because of the rancor.

This doomsday ultimatum is all about labor negotiations. Will the labor unions make concessions? Yes, or they will be permanently replaced by non-union staffers. Either way, the paper continues.

In this case, management has the upper hand, even in a union town such as San Francisco.

The Chronicle’s most likely buyer — if it were to come to that — would be Dean Singleton’s MediaNews Group, whose papers already ring S.F. Merging The Chronicle into MediaNews would create savings in news, advertising and production.

Billionaire Philip Anschutz, who has turned the S.F. Examiner into a free tabloid, also is a possible suitor, at least for some assets.

Here’s the scoop behind “The Voice of the West’s” ultimatum that is missing from the wire-service reports: The paper is opening a state-of-the-art color printing plant in the East Bay in June — outsourced to a Canadian outfit Transcontinental.

“Freemont plant hiring now: Opening Summer 2009,” the Transcontinental Web site reads, actively recruiting workers.

Hearst and the Teamsters have been holding informal negotiations for months on staffing for the new plant. Now the gloves are off.

The unions representing other workers, including newsroom staffers, vow to back the Teamsters, a common labor tactic.

But the solidarity will be greatly tested during the worst economic crisis in decades.

Along the way, I do predict Hearst will close the Seattle Post-Intelligencer next month, absent of finding a last-minute buyer, providing a motivating force to compromise in S.F.

The Chronicle’s publisher is Frank Vega, nicknamed “Darth Vader” for his union-busting tactics at the Detroit newspapers, where he worked previously.

The Detroit papers, once strong journalistically, are now shadows of their former selves. But that’s more a byproduct of being a publicly held newspaper chain, just like in other markets.

The Chronicle lost more than $50 million last year and may lose more this year, but the real motive for the ultimatum is breaking down the unions and their work rules — a long-standing goal of management.

Let’s be real: The privately held Hearst empire is big enough to bankroll a flagship paper, and its is one of the fastest-growing newspaper Web sites.

In short, The Chronicle recently has been more innovative than many newspapers, despite being in the backyard of Craigslist. The paper was redesigned this year as well.

Besides making headway on several fronts, the Hearst legacy is to own the dominant S.F. paper.

The great-grandson of William Randolph Hearst (WRH III) lives in San Francisco and is an active member of the Hearst board, as well as a partner with venture capital firm Kleiner Perkins.

What’s left for The Chronicle is getting the unions to join the party. I think they will. But if they don’t, Northern California’s largest daily will still survive, with a new color format that will knock your socks off.

Where’s Waldo? I mean Tom Hastert

Waldo lost at the circus

 Truth is stranger than fiction: “We the people” spent more than a year investigating Loan Sense’s Tom Hastert for fraud, dotted all the “i’s” and crossed the “t’s” on the complaint and exhibits — and spent oodles of taxpayer’s money along the way. Then we filed the complaint and issued an arrest warrant, as well as a finely crafted press release, taking all the credit. But  — guess what — “we the people” forgot to locate Hastert, so we can’t arrest him.

I’m surprised more people aren’t asking some tough questions to officials in the DA’s office, law enforcement and the state AG’s office (including the ones we elected to office). Sounds like a blunder. It merits further scrutiny.

Journalistic conflict on the gold mine coverage?

I noticed the editor/publisher of The Union wrote a column today supporting the reopening of the Idaho-Maryland mine. Fine: It’s what publishers do, promote business, (though some local businesses are still undecided about the mine).

But the editor/publisher also directs the paper’s news coverage nowadays, which included two other recent front page stories in support of the mine: Here’s an excerpt of what I wrote this weekend: “The local paper seems to be gung-ho for the mine to reopen — both in its editorials and on the news pages.

I was surprised to see an article above the fold on Feb. 4 (with no byline) about an alleged vandalism incident way back in May 2006. The headline read ‘Grass Valley Mine Shaft vandalized.’ It was not breaking news. It should have been promoted in a less prominent place.

Then on Saturday, the lead news item is ‘Mine touts investments as gold hits a grand.’ It suggested that the mine would fetch $5 billion on the open market.

But that’s misleading: Gold price fluctuate wildly, the city would see no sales tax from that, and sales from the ceramic tile plant are highly unpredictable.

I’m glad the article raised some of these issues, but I wondered about the article’s positioning on the front page — as with the earlier one. ”

(end of excerpt)

This is *not* a simple growth vs. “no-growther” issue. A lot of *business* people here are on the fence about the mine, including developers, high-tech executives and the board of the Economic Resource Council (of which I have been a member). Most are waiting for more information.

The environmental report is not even approved, the air pollution could impact other projects such as the Loma Rica housing development, and the vibrations could impact high-tech firms.

Others worry that Emgold has no experience opening or running a mine; its stock trades at pennies per share.

There’s a lot of complex issues at play here. It’s not like opposing the no-growth initiatives last year, which was a “no brainer” for businesses and many people for that matter.

Even the ERC’s draft economic development report does not mention reopening a gold mine as part of its strategy. It focuses on attracting “green” business and technology.

“It is indeed what got you here…..a 19th century mindset,” Steve Frisch, president of the Sierra Business Council, wrote at the bottom of today’s column. “The mine is another ‘silver bullet’ instead of a real economic development strategy.”

The news pages and the opinion pages have separate missions. Otherwise, people will lose trust in the information they are receiving.

I’m a pragmatist, too. When it comes to reopening the Idaho-Maryland mine, there’s a pragmatic mission to avoiding a journalistic conflict or the perception of one (a la the Bruce Conklin affair):

People who get information that is not colored by bias or opinion might be more inclined to get off the fence and support the project — rather than recoil and think they are being bamboozled.

We have a lot of “conspiracy theorists” around here, some of whom think the paper is a lapdog for any business. We need to prove them wrong.

In the meantime, it it matters, gold has retreated for a second straight session in trading today.

Where were you in 1997 when Dow was this low?

Bill Clinton
Bill Clinton

The Dow is at its lowest point in 12 years, a grim sign of our deepening recession. It got me thinking, what was I writing about then? Here’s what I found from some clips:

•Pac Bell Park. I broke a page 1 story in The Chronicle that the Giants new downtown stadium was going to be named Pac Bell Park. The $50 million naming-rights deal was the biggest of its kind. Since then Pac Bell was bought by SBC and renamed SBC Park. Then SBC bought AT&T, and now it’s AT&T Park. That’s enough telco consolidation to make your head spin.

• Entrepreneurs were taking advantage of “Netizens,” as we called them then, who didn’t understand the nuances of URLs. Here’s an article about a guy who turned into a lucrative porn site. The White House, AKA, was miffed. Now we’re more sophisticated, building “social networks,” communicating on Twitter and such.

•Steve Jobs saved Apple. An ineffective CEO named Gil Amelio was ousted from Apple, clearing the way for Steve Jobs to return to the company he founded and turn it around. Jobs is now on a medical leave, sadly, but the company is a powerhouse.

Some other highlights of the year: Clinton began his second term, Princess Diana was killed in a car crash, the Florida Marlins won the World Series and the first color photograph appeared on the front page of the New York Times.

A lot has happened in 12 years. Too bad we’re back to square one with the stock market. I’m glad to be a 40-something rather than at retirement age. We’ll all be working the rest of our lives, I guess.