Rupert Murdoch said recently that he’s planning to stop Google News from indexing his publications including the Times of London and the Wall Street Journal. Murdoch’s idea is that Google News and the like make it too easy for Internet users to sample news for free rather than paying for it as God and Rupert intended. Mark Cuban, who is very clever but with whom I rarely agree, thinks this is smart on Murdoch’s part, because Twitter is changing the way people find news, effectively disintermediating Google, but not the News Corp. publications, themselves.
It’s funny how Murdoch’s statement made Cuban think of Twitter while it made me think immediately of the A&P.
The Great Atlantic and Pacific Tea Company, or A&P, was America’s first national chain of food markets. Hell, it was America’s first self-serve market, first to have store brands, first to advertise nationally, first to have a customer loyalty program (in 1912!), first to publish its own magazine (Womens’ Day, which is still around, though no longer owned by the A&P), and for most of my childhood back in Ohio A&P was the big Kahuna of grocery chains. With $5.4 billion in sales in the mid-1960s, A&P was at least 20 percent bigger than any of its competitors.
But after 105 years of setting the pace for the grocery industry, A&P peaked in the mid-1960s and went into a decline that lasted for at least 15 years and, it can be argued, continues even to this day. A&P, which has had German owners (the Tengelman Group) since the 1970s, is more of a super-regional chain today and doesn’t particularly vie for industry leadership on any measure. What happened in the mid-1960s to hurt A&P was it opted out of being indexed by Google News.
Well not literally, but close enough. A&P management, which back in the mid-60’s was still chosen from the founding Hartford family, decided at that time to abandon shopping centers — retail aggregators as Google is a news aggregator. They reasoned that in most shopping centers the anchor store was an A&P. In their view their supermarket was the main draw for a shopping center and didn’t need any of those other shops or stores to provide traffic. The rest of the shopping center was seen by A&P management as being purely parasitic. The company could get cheaper real estate down the road with a standalone store, which is why today most A&Ps aren’t in shopping centers. It’s also why A&P is a shadow of its former self.
You see the Hartford family (and Rupert Murdoch) were wrong. The flawed assumption at A&P was that shopping centers would somehow do without an anchor supermarket, which they didn’t. By withdrawing from the common location A&P was not only walking away from significant customer traffic, it was in each case simply handing that traffic to a Safeway or a Kroger store. It was a supremely stupid move.
Which brings us back to Rupert Murdoch, who is brilliant in his own right but in this case can’t find his own URL with both hands. If Murdoch abandons Google News, then those hundreds of millions of reader referrals per day will simply go to other publications or maybe even to guys like me. It’s not like Google can’t fill the space.
Murdoch wants readers to pay for news. I’d like folks to be paying for my words, too. But pulling out of Google News isn’t the way for either of us to accomplish that. And Twitter isn’t a factor with enough of the audience (yet? ever?) to make a difference.
Giving Murdoch the benefit of the doubt, then, I’m guessing he simply doesn’t mean what he said. Perhaps he just wanted to sow a little confusion, get some publicity and maybe a concession or two from Google.
It won’t work.