07:55 AM

Vinod Khosla Says Silicon Valley VCs Tried to Save Newspaper Industry In 1996

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: