Mark Cuban Tells Media "Google Is a Vampire"

38 Comments

Entrepreneur, basketball team owner and billionaire Mark Cuban isn’t one to keep his opinions to himself, particularly when it comes to something he feels strongly about — like the performance of his beloved Dallas Mavericks, or the flaws in the NBA, or the path that the media industry must take to survive in a digital world. It was the latter that Cuban held forth on in New York City on Tuesday, although to be fair he was asked for his opinion: He gave a keynote address at the AlwaysOn OnMedia 2010 conference, during which he said that Google (s goog) and other aggregators are “vampires” and the only way to stop them is to “put a stake through their gosh darn hearts.”

The vampire metaphor may be Cuban’s, but this is a refrain that the newspaper and magazine industries have been hearing repeatedly over the past few years, from luminaries such as News Corp. (s nws) boss Rupert Murdoch (who said Google “steals our content”) and Sam Zell, the former owner of the Los Angeles Times and the Chicago Tribune (who said papers needed to end Google’s “free ride”), not to mention the World Newspaper Association and the Associated Press, which seem to believe things would be better if all the content could just be locked away the way it used to be, back in the good old days.

We don’t know what kind of reception Cuban’s comments got, but it’s not hard to imagine the heads of some media establishment types nodding in agreement. After all, Google just takes media content for nothing, right? (small chunks of it, but still). And then it puts it up there for people to see, and then it sells ads and makes money. And what do traditional media entities get? Bupkis. Surely Google could spread some of those billions around, or do without the content.

This well-trodden ground was apparently trod again by the Mavericks owner in his keynote. Too many newspaper and magazines see traffic from search engines as being like customers coming through the door of a shop, said Cuban, but in reality, readers who come in from search rarely turn into customers. “You haven’t gotten anything back except that you’ve turned into zombies,” he told the assembled throng of cutting-edge CEOs and media establishment. “There is no reason to be indexed in Google.”

Cuban reportedly dared newspapers to pull their papers out of Google’s search index. “Show some balls,” he said. “If you turn your neck to a vampire, they are [going to] bite. But at some point the vampires run out of people’s blood to suck.” This is right out of Murdoch’s playbook. The News Corp. chairman recently threatened to remove all of his various newspapers from Google’s search index entirely, to which Google effectively said to go right ahead.

Both Cuban’s pitch and Murdoch’s, of course, ignore the fact that search-driven traffic is growing at most newspapers (in contrast to direct traffic and print circulation), and that if they don’t find a way to appeal to and monetize those readers then they will be catering to an ever-shrinking number. What good is having a store if no one knows that it exists? As Google continually points out, it drives billions of page views to media sites — surely some of those readers might want to return, if they were appealed to in the right way. Perhaps they might even pay for something now and then.

Does Mark Cuban believe any of what he was saying, or was he just trying to be provocative? It’s difficult to say, although it’s worth noting that while he is one of the few CEOs or billionaires who blogs regularly (OK, Bill Gates just started), he’s also the guy who got mad when a newspaper quoted some of his Twitter messages, and wondered aloud on his blog whether you could copyright a tweet. Maybe he could talk to his pal Rupert about some kind of exclusive Twitter licensing deal, while readers are occupied elsewhere.

Post photo and thumbnail courtesy of Flickr user Thomas Hawk

38 Comments

Naya

The complaint from Associated Press and the other news agencies and newspapers may be because they pay journalists to gather news, but Google doesn’t pay anything to have these news items published online.

delbert norvin

i don’t get it. you say search-driven traffic’s on the rise but the papers say they get a lot less for that kind of inventory than for clicks directly to their home pages. also, their traffic – most of them, i think – are suffering declines in traffic. i don’t know whether cuban’s purposely playing the part of provocateur or whether he believes what he’s saying. but it’s worth speculating what might happen if the papers indeed followed suit.

Mark Lambert

First… really great to see both Don and Mark here… Second, I think the point is clear and Mark articulated it well.

Search driven traffic may or may not be on the rise, but revenue from that traffic is not. Consumption of news via Google news is on the rise. Click through is not. Thats the core of the problem. Google is utilizing the brand power of various news outlets to drive the value of the news aggregation offering. In return, they promise flow through traffic, but this flow through traffic does not end up being monetized.

Comparisons to small business are flawed. A small business needs exposure and thus advertises. Folks find the business because Google is the new Yellow Pages, in this case.

With news outlets, their product is being republished. Everyone already knows who the NY Times is. They are able to consume that content easily within Google news. There is no need to click through to the NY Times and start spending money. Its simply a completely different use case than the value other businesses can derive from ad banners. We’re talking about the value of the content and who is realizing that value in terms of monetization.

Without a doubt publishing was in a death spiral of its own creation and Google isnt the real culprit here, but Google is certainly picking the bones clean. That they are able to make money off the NY Times when the NY Times cannot, says a lot about the sad state of the publishing industry.

That doesn’t make it a good thing, however, and Google are clearly set to apply this model broadly to every industry. If the internet is a natural disintermediator (which it is), the question I am tempted to ask is why not disintermediate Google? I’m not sure how it came to be that they are the defacto nerve center and central taxing authority of the web. Many say there is no “lock in”, but there is certainly a lock in. Because the internet monetization model is the one which they have defined and are the kings of, there is lock-in.

The likelihood of a better model surfacing (and I can think of a few very easily that would be far better for consumers, sites and advertisers and would be bad for Google) is slimmer each day as their market position strengthens.

Definitely issues worth discussing and I love that a public figure like Mr. Cuban would go out on a limb with statements like this to get people talking and break the complacency.

markcuban

a couple things.
1. I remember Mathew. I just posted a blog about discovery.
2. Don, i actually wrote about volunteering to invest in reporters to cover the Mavs . Im happy to pay money to newspapers to assure their coverage. Its very valuable to me. If all they did was summarize information from our website I would ask them not to. I want the brand commitment to the Mavs as a source of information, not to the paper
3. Thomas’ article misses the mark with his choice of metrics. Traffic and circulation traditionally have reflected revenue and profitability. They no longer do. That is his disconnect.
4. My comments to always on was directed to brand established media. THere is a big difference between a startup trying to establish itself vs a household name newspaper. If you dont think Google News benefits significantly when they list Wall Street Journal, NY Times and Washington Post as the first 3 articles on a topic, you are mistaken. If the big brand companies were clear that their articles were not in GN, Google News wouldnt necessarily decline in traffic, but its brand would have a completely different positioning relative to newspapers and other big brand media. Those big brands like the journal could continue to brand their core competencies to consumers and clearly differentiate themselves as not being one of the thousands who have been commoditized by Google News.
Of course that is a business decision between revenue generated from google traffic and the impact on the media brand as being “one of thousands” combined with the increase in brand value Google News gets from offering say the WSJ or NY Times.
To me its an easy decision when the traffic from google translates into minimal, if any revenue

Mat

This is absolute bullocks.

How is what google is doing any different than having your newspapers in a display case at the local market? Google displays small pieces of content, just like i sit in the store and read every front page if I choose to without buying a paper.
Are you going to start pulling your physical papers out of stores? Forcing them to hide content behind the counter? That would be a stupid elimination of your supply chain, just like de-indexing from Google would be.

This is more much ado about nothing and people like Murdoch and Cuban wanting the stories to be about them so they pick fights with big name opponents.

Ian L

I guess this is totally different than a normal newspaper, but I’m on the web team with my college paper (and write an article or three per week) and we get ~15% of our traffic from search, most of it from Google. That’s on our main site; on our blogs the number is around 50% from Google, around 53% from all search providers combined. Time spent on the site is 20% lower than average, and pages viewed is about 12% lower, for search engine viewers, but we wouldn’t have those viewers otherwise. The reason Google is such a low number on our main site is that every week an e-mail goes out to everyone on-campus with links to articles, though there is a fair amount of organic direct traffic as well.

So with all that said I’m not sure how turning away window shoppers gets you extra cash in the news biz. Maybe it gives you a sense of moral victory over Google but that’s about it.

Oh, and as for Google ads, they work quite well depending on the content you put beside them. If you’re talking about really geeky stuff your audience has a much larger likelihood of having AdBlock installed and doesn’t see the Google ads, or they just filter them out. However I’ve gotten a $5+ CPM on AdSense back when I was maintaining a stable of websites that got ~15K hits per month. It was a part time thing and a hobby, but it made that hobby worth my time.

Mike

My paving company does 100000k plus from people who find our site with google ads. $100 per month to be the first thing people see when they search paving in oir city is well worth it. 30% of the clicks call me and use our services. If people aren’t making money from ad words then they are
not targeting the right searches or their website is not good enough.

drivin98

I sincerely wish Murdoch had of just pulled his content instead of subjecting us to his annoying whining. Hell, it would have made Google News that much more enjoyable knowing I’d wouldn’t end up at one of his useless properties.

Andy Abramson

Oh how quickly we all forget. For years the annual guide called “Readers Guide to Periodical Literature” was a staple on the desk at most major libraries. Magazines were included and it was the best way to find something on a specific topic after it had been published, especially if you weren’t a subscriber.

There was later an online service called Dialog which back in the 80s was the faster way to find editorial content that could be searched. It came at a hefty price.

Nothing that Google is doing is much different on the indexing side. But what they have done is made locating the content easier and not asked nor not charged the content provider for the service.

That said, now that we have a Nexus One, how long before Google says “we’ll be a publication.” While I don’t think it’s likely, some folks in the media game have to fear that.

Eric

I though that this year vampires are “cool” and “hip” and all that trendy

Haji Sillah Seesay

I am no Google apologist, nor a fanboy. Nor do I believe that Google is always right… In fact I am at times skeptical of Google because of the tremendous amount of our ‘privacy’ information in their possession, but there’s one thing for sure-they understand customer partnership, and have used it very effectively for the last few years. More so than any prior company. Google is very nascent in comparison to its detractors and naysayers i.e the inglorious alliance of Mark Cuban and Rupoh Murdoch of newscorp Inc, a company that owns Fox and more than 20 other TV stations. Mark Cuban of the Dallas Marverick in my opinion does not have a dog in the fight. He has opinions–and that’s all it is, Opinion.

Murdoch and his media conglomerate alliance have accumulated billions in the last century with a “control monopoly, using brass knuckle capitalism; Welcome to the 21th century. fluffy criticism from tainted messengers will no longer resonate with the masses. It’s time to adopt a business model that is “insync” with the 21st century. The company that is pulling ahead of the pack in its approach is Google. I say, if you can’t beat them, join them, better yet, learn from them. People in glass houses shouldn’t be throwing stones..

Don Dodge

Interesting story Matt. I can tell you for sure Mark Cuban believes what he says, although he sometimes uses inflammatory words to make his point.

Mark doesn’t have a dog in this fight, and no axe to grind. He is just an entrepreneur at heart, and likes to strategize what he would do if faced with similar problems. He has great ideas.

You can be sure if Mark Cuban was the owner of a major newspaper he wouldn’t just sit there and wish things would change. He would make the changes, see if they worked, and if they didn’t he would make more changes until something did work.

I do find it amusing that Rupert and some other newspapers blame Google for their woes, and believe that Google should pay the newspapers for the privilege of sending traffic to them. Amusing…and delusional.

To twist the analogy, it would be like Mark Cuban demanding money from Rupert Murdoch’s newspapers for writing about his Dallas Mavericks.

The newspapers can easily stop Google from indexing their content by using robots.txt. They don’t because they know Google isn’t the problem.

Don Dodge

Bastian Nutzinger

My thought exactly. If they wanted to be deindexed it would take them a 5min effort to do so.
So I think it can be safely assumed, that the newspapers are aware of the fact, that beeing indexed has its advanteges or else there wouldn´t be much talk but more delisting.

So why are they making so much fuzz about the subject then? Idle threats hoping to get some money out of google?
I don´t get it.

Oh and the argument that visitors from google make less page impressions? You don´t need to be a genious to figure out that you are dealing with two completely different use cases.
On one hand you have the “subscribers” who come specifically to your site and browse around different topics just to stay “generally informed”. On the other hand you have the “researchers” googling for a specific topic and checking out the sources google offers.

Delisting from google will most likely completely eliminate the latter use case and contribute next to nothing to strengthen the former.

“Use case” is the keyword here. And it´s the fundamental flaw in the newspapers logic. Sure you can convert a occasional reader to a subscriber but you cannot under any circumstances change your visitors use case.

Brit

“I do find it amusing that Rupert and some other newspapers blame Google for their woes, and believe that Google should pay the newspapers for the privilege of sending traffic to them. Amusing…and delusional… The newspapers can easily stop Google from indexing their content by using robots.txt. They don’t because they know Google isn’t the problem.”

To be fair, there’s a couple problems with this. First, google indexes lots of newspapers. If one paper gets mad and de-indexes themselves, then google sends traffic elsewhere. Google can effectively play the papers off each other. The fact that people still want to deal with Google does not allow you to conclude that Google is good for their business – it just means that dealing with google is better than not dealing with them. Take, as an example, this scenario:
Situation #1: You earn $20 / hour for your work
Situation #2: You earn $2 / hour for your work
Situation #3: You earn $1 / hour for your work.

Before google, newspapers were in situation #1. Now, google can index lots and lots of news. Now, you’re in situation #2 (deal with google) or situation #3 (don’t deal with google). Neither are very good situations, and both are a lot worse than situation #1. But, existence of google takes situation #1 off the table. My point is simply this: the fact that newspapers pick situation #2 (deal with google) rather than situation #3 (get delisted by google) does not allow you to conclude that google is good for them simply because “they chose to work with google”.

Brandon Mendelson

Matt,

Can you prove search-driven traffic is growing at most newspapers? I don’t doubt it, but that’s the type of statement best backed-up if you’re going to throw it out there. I think you may find the reverse to be true if it’s true places like Mashable and Engadget are taking their traffic and getting better Google juice because they post thirty times a day.

As far as the other point goes, “What good is having a store if no one knows that it exists?” When we’re talking about a newspaper, the community knows it exist. And we might not know that the Glens Falls Chronicle exists unless you live there, but there job is to serve their community, so it’s irrelevant if people outside the community knows it exists. What is relevant is if an aggregator like Google, where it has been proven statistically that people don’t click through as much to the actual story when visiting Google News, runs the Chronicle’s story and cashes in on it.

franktalk boston

Funny that MC would say that. Isn’t he the guy that sucked the blood out of radio stations wanting to stream when the internet first started getting popular? He charged the stations inventory, lots of it. (6 commercials, 7 days a week…that means he got 2184 commercials per year from every station he had a streaming deal with). Let me point out that commercials are a stations life blood. (See where I’m going with this.)
Then, he turned around and used the programming he wasn’t paying for, but charging for the right to re feed, and sold ads on the streaming websites. So, say he had 2000 radio stations, that would be over 4 million ads per year to resell on stations across the country, along with the ads he sold on the website.
Let me tell you, Cuban was one genius Vampire!

Ed

Did Cuban really say “gosh darn?” Goll, heck, that’s going right for the throat! (pun intended)

AGORACOM - George

Hey, Mat. This topic sparked a great thread between you, Cuban and I on your blog a couple of months ago. I started by posting:

==================
Mark, this may be a simple point but here it goes. Why not continue to bring traffic in from Google but create a specific message for them when they arrive in an attempt to get them to subscribe to a Fox brand?

For example: “Thanks for visiting Foxnews.com via Google news. Here are the top 5 reasons our audience trusts and returns to Fox daily. 1, 2, 3, 4, 5. If any of these appeal to you, stay dialed into Fox by RSS, Twitter, etc.”

Tell me why this isn’t a better approach to the Google issue than simply shutting it off.

Thanks,

George

You would think this would be the best solution. Even Cuban agreed it was a way to go – but he then revealed the deep reason why Big Media wouldn’t be interested – and that’s the rub. Read the thread, especially Cubans’ last comment. It is worth it http://bit.ly/1gEILX

Regards,
George

Michael C

OMG….why are we still paying attention to Mark Cuban. Blah blah blah

AGORACOM - George

Like him or not (I do), Cuban is one of the few successful web entrepreneurs that actually takes the time to communicate with the rest of us. I may not always agree with him but he definitely provides original, great food for thought on the most controversial topics.

On a personal note, I also like the fact he never forgets about the bottom line. Unlike most techies that believe cash is a four-letter word, Cuban understands that you can’t change the world if you can’t pay the rent.

Had more Web 2.0 start-ups taken his approach, we wouldn’t have a TechCrunch Dead Pool full of brainless companies with no revenue model …. unless “sell to Google for a Billion dollars” counts.

Regards,
George

rick

“Had more Web 2.0 start-ups taken his approach, we wouldn’t have a TechCrunch Dead Pool full of brainless companies with no revenue model …. unless “sell to Google for a Billion dollars” counts.”

That’s amusing George, given how Cuban made his money…Let’s see was it developing a huge company that had billions in revenue? oh, no, it was selling broadcast.com to Yahoo for almost $6b.

Has Cuban done anything since then that warrants listening to him on issues like this? He’s a bright guy, but there are lots of bright people out there… what’s he done?

AGORACOM - George

Your point about Broadcast.com is well taken. However, none of us knew any better back in the dot-com days. In Web 2.0, every start-up should have realized the need for a real revenue/business model. Yet, Silicon Valley went and made the same mistake all over again.

With respect to his track record, people often forget about what he accomplished prior to broadcast.com. He may never again sell a company for $6B but his thoughts on Web 2.0 and digital media are equal to those I read on TechCrunch and GigaOm.

Regards,
George

Ian Betteridge

“What good is having a store if no one knows that it exists?”

To stretch the analogy, what good is having a store where millions of people come in, look at one item, then leave without paying for anything?

Eideard

You might try explaining that to the folks making money from Google-based adverts. No matter how quaint your characterization.

Brit

I’m doubtful that anyone other than big google-power users (who specifically tailor their ads like a stockbroker picking stocks) make much money on google-based advertisements. A while back, I heard a podcast where Jeff Atwood was bemoaning the fact that they were making less than a dollar a month from google ads. They were also getting a million page views a day, and are ranked at around the 500th-600th most popular website according to alexa. Lookup “stackoverflow” and “million page views” and “google adwords” if you don’t believe me.

From the podcast:

If a site like Stack Overflow, which does almost a million pageviews a day, can’t make enough to cover even one person at half time using Google AdSense, how does anyone make a living with AdSense? Does it even work?

Joel says the only people making decent money with AdSense are scammers who specifically build websites to do nothing except target high pay-per-click keywords. I am not sure this is what Google had in mind. It is a stunning indictment of “the power of the algorithm”.

Bastian Nutzinger

@Brit:
“Joel says the only people making decent money with AdSense are scammers who specifically build websites to do nothing except target high pay-per-click keywords.”
That is a very harsh statement, especially seeing that it is based on no significant statistical basis at all.

A couple months ago I worked for wallstreet-online.de (a german news/community site dealing with stocks). Incidently they also have around 40M pageviews/month which makes for a good comparison.
They ran the occasional AdSense Ad as spacefillers.
Of course I can´t disclose the actual numbers but they earned a solid 5 digit number per month.

Income on click based ads very strong depending on your user base. Generally you can say the more tech savy your visitors are the less likely they are to click on random ads. It´s unfortunate they seem unable to make money via AdSense but calling everybody a scammer who does make money trough it is bullshit

Sean Fitts

If such a store existed, whose responsibility would it be to convince some of the browsers to buy? If you said the store owner, you would be correct. As the author points out, the media companies should spend more time figuring out what they have of value that someone might buy and less time bemoaning the increased freedom of information access. That genie is solidly out of its bottle.

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