We're googling the New York Times to death

Over the next few years, they expect newspaper ad spending to decline by 7.1 percent and spending on magazine ads to decline by 8.1 percent, while digital rises 27 percent. Yet who will be getting those dollars?

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According to eMarketer.com, the answer is “big technology companies.” Google Inc., Yahoo! Inc., Facebook Inc., AOL Inc. and Microsoft Inc. took in almost two-thirds of U.S. digital ad spending in 2012. And the New York Post reports that Google and Facebook account for basically all of the growth in digital ad revenue; without them, according to an analyst at Pivotal Research, web ad revenue grew just 1 percent last year, even slower than our slow economy.

The problem for newspapers and magazines and websites is not that other people are in the news business. The problem is that in the days of print, a newspaper or a magazine controlled a valuable distribution channel — its printing presses and delivery vans. People would pay a lot of money to use that distribution channel to spread news about their products and services. They owned “the pipes,” as we used to call them, back in my brief summer internship as a technology investment banker. But now the cable company owns the pipes. All the media companies have is the news. And that was never a very good business to be in — which is why it was getting subsidized by advertising copy about Chevrolets and GE stoves.

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