Vinod Khosla Says Silicon Valley VCs Tried to Save Newspaper Industry In 1996
By Tom Foremski - July 1, 2009
At the recent SDForum 2009 Visionary Awards, Vinod Khosla, one of Silicon Valley's top VCs, gave an inspiring and very humble speech.
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Afterwards, I went over to congratulate him on his award and also say how much I enjoyed his speech. Rebecca Buckman, one of Forbe's top journalists, was also there. He then started to tell us a very interesting story, about how Silicon Valley VCs could have saved the newspaper industry--back in 1996.
This would be very impressive because this would be before Yahoo, Google -- and way before the Internet was the Internet as we know it today. In those days AOL ruled the online world.
Vinod Khosla tells Rebecca and I about a meeting with the top executives of the ten largest newspaper companies, essentially locking them inside a hotel for an entire day.
He says that he and his colleagues had come up with a way newspqpers could avoid the harmful effects of the Internet on their business mode. But the newspaper executives squabbled over control and the deal went nowhere.
Foremski's Take: Did Mr Khosla and his colleagues have a solution? We would need more information about the proposed business model. But I'd be very surprised if Mr Khosla's business plan for newspapers would have worked -- whatever it was.
The reason I am confident in saying that is that the online world was a totally different place in 1996. We now have dozens of new online revenue streams that didn't exist then, and also we have a tremendous amount of broadband rather than slow dial-up. However, I am curious to find out more about the rescue plan.
Here is the conversation with Vinod Khosla via Flip:
http://www.youtube.com/watch?v=79GbNip38HE
http://www.siliconvalleywatcher.com/mt/archives/2009/06/vinod_khosla_to.php« Visonary 2009: Jim Clark Was Always Looking For An Exit Strategy . . . | Main | This Week SVW Is In London And Cambridge »
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Comments (4)
If Vinod was working with newspaper execs that early on, it would be really fascinating to know what their vision was. The newspaper business was in a crisis before the Internet arrived. There's a lengthy list of business dynamics that reared up in the 1980s and '90s like unions, the advertising paradigm, competition from cable TV, stiffer competition from local TV news, the renaissance of news/talk radio, and even the expansion of morning drive-time in metro areas (and the list could go on). If what has happened is that the Internet decimated classified advertising and pushed the newspaper business model over the cliff, what would the plan have been?
Posted: July 2, 2009 10:42 AM
The current state of publishing industry has tself to blame. The writing was there very much on the wall. Publishing industry took their own time. And now the fallout is there for everybody to see. Everyday one newspaper publishing industry is getting wound up.
Posted: July 6, 2009 10:09 AM
Around the same time, our agency (Bernard Hodes Group) was trying to alert the newspapers to the prospect of losing their help-wanted print classified linage to the Net. Same reaction: none of them would yield any power and treated it as a giant game of 'chicken.' I don't believe anyone who was in that meeting is still in the business... for obvious reasons.
Posted: July 7, 2009 10:05 AM
Mark,
What was your agency advising the newspapers to do?
Posted: July 9, 2009 9:02 AM