G-Rex And Traditional Media

Tech companies have been eating the lunch of the media business by swiping a growing share of its main source of income: ad revenues

- R. Jagannathan

It is probably clear to most Indian media companies that their nemesis is not a rival newspaper, TV channel or website, but tech’s T-Rexes. More specifically, Google and Facebook. The latter two call themselves technology companies, but they are feeding at the same trough that media companies do.

For some time now, tech companies have been eating the lunch of media companies by swiping a larger and larger share of advertising revenues that earlier accrued to the latter. With almost zero cost of producing content, and by simply sweeping headlines and web links off news sites and blogs, Google News attracts a lot of traffic. Though there are no ads on these pages, user searches for specific types of news allow Google to place appropriate ads in the right context, giving advertisers a better chance of finding pot­ential customers. Google can thus skim the cream of ad revenues. Facebook delivers customers who display a tendency to linger on the site. Unlike Google, which is an aggregator, Facebook is a publishing platform, but won’t admit it is a media company.