So one of the primary definitions of a media company is that they sell advertising?

Well, I guess my company, the BBC, just ranked as the strongest media brand in the world, with the largest staff of any broadcasting network in the world, with the largest reach of any news organization, is not actually in the media business.

Google, Yahoo and eBay are in the media business in the same way that printing companies and satellite companies are - they provide the framework for media distribution. This does not diminish what they do, nor take away from the way they are changing the way the media business works, but they are not media companies.

What is happening is that media creation and media distribution are becoming uncoupled. It's as if the NYT didn't do it's own printing and simply was paid a fee for it's content by a printer who handled the distribution and sold advertising.

A side question about your five rules, particularly the "get your content as near-to-free as you can" rule. Does this mean you foresee the death of art? There will be no room for novels, long form films and TV, etc. Or are you saying by the "content is infinitely scalable" Law of New Media that this type of content will be produced for next to nothing by the general public, and the media companies will make all the money from it?

I know you are really kidding, but food for thought. Still - not in our lifetime. Start ups is one thing but cash flow and power is another.

As president of one of those Silicon Valley New Media companies, I have a few words. howard said, "I know you are really kidding, but food for thought. Still - not in our lifetime. Start ups is one thing but cash flow and power is another." That's exactly where the change is coming in. Some of us in this new media are even paying our content providers because it flows from the fat pipe all the way down to your computer, the cost is going down. A new scenario is being hatched that could replace NY.

But I love being down there in the hustle of Manhattan and the atmosphere humms there. Here in the Valley, we're all spread out and there's no central location that creates a palpable feel.

So, that's a part of the change. I like the fact that we can work here in the Valley and disrupt.

The only thing that matters in the media world is public relations. When SV starts stealing some of our government propaganda money from the NYC teams that sell us tooth paste and presidential candidates, then NYC will notice.

'So one of the primary definitions of a media company is that they sell advertising?'

Er, no. Tom never said that. Bit paranoid at the BBC, no?

'I know you are really kidding, but food for thought. Still - not in our lifetime. Start ups is one thing but cash flow and power is another.'

Er, I don't think he is kidding you know.

Yes, I'm not kidding... GOOG, YHOO and the others publish pages of content with advertising around it. Smells like a media company to me.
The content is largely harvested for free, but these companies also have tons of proprietary content: their search index.
Google is a media company that owns its content, and has the most efficient distribution system in the world. That is a potent media company indeed. This is not a dumb pipe like a satellite or cable system.

Tom, You've got it right. The point some readers are missing is the "influence" factor. As the wellspring of cultural influence shifts to the Valley, the other metrics--ad dollars, content volume--will inexorably follow. As Marshall McLuhan might have observed, you can't stop a medium that won't be stopped.

NY Media will take notice the day Google takes some of its cash and hires three-quarters of the talent from NY Times, Wall Street Journal, etal for twice the salary, twice the benefits, with a greater range of freedom and then sells that proprietary content to its huge traffic. Just a lovely thought.

GOOG however, doesn't want the "influence" and is quite happy scaling its business through machines and algorithms rather than people. In fact, it proudly proclaims that Google News, for example, is collated by machines (look at the bottom line of the page.)

YHOO does produce some of its own content but it has never been comfortable doing that.

Yes, someone will hire all the journalists at twice their salaries but it won't be this generation of new media companies, these are indexers and aggregators.

I think a new definiton of what constitutes a "media" company needs to be created.

The media industry used to be mostly about great writers creating engaging content for which the companies use to charge subscriptions, and consumers in specific markets and businesses alike were willing to pay. The primary business model used to be subscriptions, the secondary business model was advertising.

The new age media companies such as MySpace, Craigslist, Facebook, Google, Yahoo!, eBay have turned this around. Now, the primary business model is advertising. The subscription business model is not even evident at any of these sites (at least not to consumers).

The new media business is all about massive global readership and massive content created by the same readership - all powered by advertisement business model. The role of the new media company is then more as a "facilitator" as opposed to the "creator" of content. The only question remains: would advertisers be willing and continue to advertise on such media sites? So far, the model appears to be working for the larger media sites.

Sanjay, you are right about the change in media business models... And most of the old media can't play in the new media business model, it isn't able to support their legacy cost infrastructure.

"You can't get there from here" my favorite American saying, and one that perfectly describes their position.