Smaller Newspapers Have Fared Better Than The Big Boys

If you work for a smaller paper or you have a favorite local paper that you simply don’t want to see fade into the sunset this is OK news. I can’t honestly say that there is real good news. It’s about the newspaper business after all. TechCrunch reports that statistics gathered by the Inland Press Association show that overall the average drop in profits for the industry as a whole was 77.6%, So how do you find a bright spot in that kind of number? You look at who is floundering the least and go from there.

The sad thing is that even of the economy comes back strong at some point this century newspapers may not even see improvement because it’s the medium, not the economy, which is the biggest culprit in the agonizing demise of a once vibrant industry. The chart below shows just how bad things are for the newspaper industry and there is little hope for recovery.

Only one category saw a revenue bump in over the 5 year span studied and that was the smallest of the small papers. There are many possible reasons for this including the lack of online hyperlocal content thus allowing the paper to still be relevant as well as the lower overhead. But is this just delaying the inevitable?

One major reason for the little guys still holding some ground is the classifieds. I personally never look at the classifieds for much of anything so I am a little surprised by this

Another sign of hope: small papers still have a hold on classifieds. Average classified sales for small papers have actually gone up, at a time when they have been declining for most papers. Inland cites an example of a daily newspaper with a circulation of less than 15,000, which posted a 210.4% increase in classified revenue from 2004 to 2008. But it didn’t do much good. The paper’s profits were down by almost 30%.

Now the paper’s profits were down 30% which still means that they were profitable. Now, we’re getting somewhere. This data, however, is just like most where it can be a bit misleading. Considering the sources were the papers themselves and the information was offered voluntarily and with anonymity there may be room for some fudging. Also, there was no recognition of who suffered tremendous losses and who fared OK. The numbers can best be seen as an average.

Who really knows the real deal but there is certainly not a lot of room for celebration. When you have to concentrate on who suffered the least then you have to figure that no matter where a paper is on the scale of size there is not a tremendous amount of hope for the future.

Schmidt Says Google Looking to Buy Some Little Guys

Google CEO Eric Schmidt told the Fox Business Network that Google is in the market to buy smaller technology players. For most this comes as no surprise. In fact, with all the cash that Google has it may be a surprise that there is not more buzz concerning acquisitions especially considering the favorable valuation environment that exists currently.

Reuters reports that the company has particular targets

Schmidt said, Google plans to focus on the cloud, mobile, and open source distribution of software in the next year.

Schmidt further clarified the philosophy

“We primarily look for technology. It’s a typical build versus buy. How long does it take us to build it with our engineers, versus there are already engineers in this other company that have built this thing.”

This philosophy is taking a page from the Cisco Systems who has been purchasing smaller technology players who have developed a technology that makes sense in the grand scheme for the networking giant. Since its early days Cisco has made over 130 acquisitions. Will Google follow the same line of thinking?

To listen to Schmidt, what they are doing is just business as usual

“We have been (looking to acquire),” Schmidt said. “We have been wandering around looking at all of the different companies. With the big ones we haven’t come across anything we’ve particularly liked. We are definitely talking to a number of smaller companies but we’ve done that routinely.”

So if you are small company with a nifty technology that might be attractive to one of the most influential companies in the world, tighten up your preso and reach out to Mr. Schmidt. Of course, whether you catch him in Mountain View or Washington, DC may depend on where he can best advance the cause of Google the greater good.

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