The value of one news post = $55m
By Tom Foremski
The conventional wisdom as espoused by the aggregators and search engines is that there is no value in news except in the aggregate, as Google News, Digg, etc.
That's why these are tough times for newspapers and news organizations.
However, I believe the long term outlook for journalism is excellent and that there is considerable value in journalism, much more than in the aggregators of news because the technology to do that is now a commodity. News is a value add that cannot be produced by algorithm and machine.
The problem is that we don't have a good way to recover the value that journalism produces. And there is considerable value in journalism.
Let me give you an example. Tuesday evening I posted a story that Wind River was for sale and IBM is the likely buyer. The story has yet to be proven but it came from an excellent source and one that has proved extremely reliable in the past.
Wind River stock jumped 9 per cent at the market open and by the end of Wednesday locked in a gain of nearly 7 per cent, or about $55m. That piece of information created a tremendous amount of value for a lot of people.
And business journalism continues to create a tremendous amount of value. It levels the playing field, it distribtes important information that is used to make business decisions that affect millions of people. There is a tremendous amount of value in professional journalism.
Yet professional journalism is under seige, the San Francisco Chronicle cut 100 newsroom jobs recently, 25 per cent of its newsroom. Because it can't recover enough of the value its journalists produce. This is true at other publications around the world.
What is the future? The future is the privatisation of news to those that can afford it--unless we can develop a way to pay for it. Google AdSense and other ad networks don't come anywhere close to covering the costs of news organizations.
Unless we can solve this problem--and it is one of the most serious issues confronting our society--the news will be financed by small groups of wealthy individuals that can make money from the news, and the news will be kept private.
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