Google’s senior vice president, Engineering & Research Alan Eustace and vice president, Engineering Jeff Huber:
“(Google) accepts that some projects will never have an associated revenue stream.” (Link)
This is a key piece of knowledge from the Media 2.0 world, and it’s why I cringe my teeth during a lot of conferences about what the local media industry needs to do to dig itself out of its current conundrum.
Since this concept has so much potential to be misunderstood, let’s review.
Public companies are concerned with quarterly profits. Since those profits have slowed or turned south, there’s a great hue and cry from the boardroom for revenue, revenue, revenue. Hence, all these companies can do is search for “innovations” that bring money into the tent. Even the excellent Newspaper Next project has as one of its innovation drivers the need to spell out profit and loss over time. This is a death sentence, in my opinion.
That’s because revenue isn’t the problem; audience is the problem. And we need to fix the problem.
Umair Haque rightly writes that free is a tactic, a “pricing strategy,” not a business model, and this is where we really miss it. We’re so busy trying to get cash in the coffers that we can’t see what Google’s doing.
And no review of this would be complete without acknowledgment, once again, that Google and the internet pureplays are the real enemy of local media companies. They want — and are getting at an alarming rate — our revenue, so when two Google VPs state at a conference that some of their projects will NEVER have an associated revenue stream, well we need to pay attention.