Google looking ever more disruptive

Stuart Corner
Thursday, 13 October 2005 18:24

IT Industry - Strategy

Google seems to be threatening to disrupt another established industry: newspapers driven by local advertising revenues.

The company is rumoured to be proposing to blanket San Francisco with a free WiFi access service and according to reports, one of the groups thought to be most at risk from such a move are local newspapers that could find themselves competing head to head with Google for local advertising revenues.

UK consultancy BWCS reports on its web site that "some analysts believe that a Google-powered local WiFi network could mean financial ruin for many papers. A city-wide network, such as that said to be in the pipeline for San Francisco, would allow the sponsored listings provider to offer users adverts on a block-by-block basis...Analysts looking at how the move may affect the local economy point to the damage that free online ad site, Craiglist, inflicted on newspaper revenues in the city. Craiglist, which was launched three years ago in San Francisco, allows most consumers and businesses to advertise for free. A recent survey by a local media consultancy estimated that Craiglist had cost newspapers in the area between $US50 million and $US65 million in lost advertising revenue during 2004."

Ominously , BWCS suggested "there is nothing to stop the cash-rich search engine behemoth buying into a local Yellow Pages company. If this pattern is to be repeated across the US and later Europe, then local city papers should be very worried."

With Telstra rumoured to be contemplating the sale of its Sensis directory arm, maybe Fairfax should be worried too!