Newsweek, Google, Microsoft

I remember a day when you had a choice of three major car brands (GM, Ford, and Chrysler) and three newsmagazines (Time, Newsweek, and U.S. News and World Report). Families had loyalties then. We liked Chevrolet and Pontiac; I was partial to Time Magazine because it was the  first such thing I’d bought when in the Army. U.S. News and World Report left the print arena in December of 2010. Today I read that Newsweek will go into virtual mode as well after December 2012, leaving only Time in the ink-and-paper format.

People’s loyalties weaken as those legal persons, corporations, change. We became a Honda family; and today we read a virtually unknown magazine called The American Conservative. I abandoned Time, oh, around about the mid-1960s. I thought that it had thinned out. Its publishers probably through they were adapting—to a friskier, hipper audience. More pics, less print, shorter, brighter. Naw, I said. To hell with news. Harper’s. Atlantic. Substance, please.

Google posted unattractive numbers prematurely yesterday—and because the release was premature, Goggle’s stock plunged. Microsoft reported financial dismalities as well because, in trading eyes (but not really) the PC is, like, an endangered species. And the French are perfecting a law that would protect their ink-and-paper newspapers from being cited in Google searches. Why? To protect the papers from loss of advertising revenues.

Now it is striking that advertising, measured against the economy as a whole, is virtually invisible. In an earlier post (link) I noted than in 2008 it was 0.99 percent of U.S. Gross Domestic Product. And it is also obvious that the leading business news most days is also about advertising, directly or indirectly. Bad news at Google—directly. Advertising clicks are Google’s only real food. Bad news at Microsoft—indirectly. Mobile devices are cannibalizing the market for larger computers—and the aura of “excitement” that surrounds mobility is caused by the presumed rise of a new advertising market. But the advertising market is not infinitely expansive. There is only so much to go around, and advertisers are like ducks at the edge of the pond when people arrive with bags of dried bread. They flock to the most recent arrival. Newsweek now, U.S. News and World Report two years ago, Time Magazine at some future date are abandoning or will abandon their defining businesses to garner ad-crumbs on the Internet.

So what’s ahead? We’ll probably have, sooner or later, an advertising melt-down on the Internet as well. Easy to predict, actually. Everything changes. Towering growth—exhaustion. I feel a little exhausted this morning. This site permitted, until this morning, Anonymous comments. I’d put that in place to help family and friends avoid having to key in almost illegible test-words before sending a comment. Little did I know. At first a trickle and now an avalanche of comment-spam began arriving. Today a hundred pointless comments, each with a commercial link embedded, caused me to spend three precious minutes erasing all the garbage. Sooner or later even the Russians (who generate most of these comments in sometimes comical English) will grow weary. Which reminds me. I ought to give Putin a heads-up. He is quite reliable when it comes to crushing infamy.

The Self-Devourer

The image of the snake eating its own tail arose this morning as I read a story in The Wall Street Journal telling me that world-wide PC sales are slumping, down 8.3 percent from 3Q 2011 to 3Q 2012. This comes despite the fact that Microsoft is just about to launch Windows 8, an operating system that attempts to fawn on the modern customer who is supposed to love “touch technology,” thus the ability to paw the screen instead of using a mouse. WSJ recites among the reasons for what it calls a “tailspin” competition from tablets and also bad economic times, including sluggish demand in emerging economies. Both reasons are logical, but the bottom line is that the personal computer is now a mature industry; its real market is not personal but business use; and its likely future will have less to do with the growth of dollar output and more with growth in employment. The real motive for buying a computer is hiring a new employee. The image, however, of the leading edge of the computer industry, viewed generically, thus tablets and smart phones included, “cannibalizing,” as the Journal puts it, the PC market, does suggest that mythic Uroboros.

In the sense that industries mature, great success always morphs into failure. Success is measured by ever advancing annual growth rates, and in that sense the PC market has been suffering for quite a while. The very effort to keep growth growing by introducing ever more popular devices with the same functionalities, causes dismay to the older parts of the industry even as everyone celebrates Apple’s most recent triumphs. Trying to boost PC sales by giving them features almost necessary in products barely bigger than a small calculator—thus screen-pawing powers—is a form of desperation. It’s one thing to hold a phone in your left hand while your right index finger messes with the screen; quite another to reach out to a screen. From the keyboard to the screen? Sixteen inches, in my case. To the mouse, half that distance. The “touch” solution goes against established habit. But when you haven’t got any good ideas, and there is a deadline by which you must become creative, grabbing popular features from a distinctly different device is a great temptation. The same sort of desperation is present at Microsoft too, to be sure. Windows 8? Already? Windows 7 is only 28 months old, issued in July 2009. And we’re supposed to get excited?