Who's Gonna Pay for the Party?

Content is king, but why? Because Google has decided so. We are lucky, cleaning the web of useless content is a very good decision to make. But content generation is still in transition from the old newspaper's business models to the new digital era models. Newspapers want to keep control over their online advertising inventory, but maybe they have to realize that monetization on the internet is a very sophisticated issue for a media company and they have to leave this in hands of a technology company like the one and only: Google.

Media companies are suffering, but they must survive because there is a lot of money for them at the end of the tunnel. They have to reduce jobs and cut costs. And not shave, but cut with a scalpel. They have to think about the Demand Media business model and see if they can capture part of their essence, where the user is the producer and costs are reduced to minimums. The unique debate to confront is how to keep investigative journalism alive in that context. Google, like always, is giving us some advice: they will provide better rankings for high-quality sites with original content and information such as research, in-depth reports, thoughtful analysis and so on.

It starting to look like the late 90's, where audience and the number of page views that you had where the variables for your company valuation. But now, there is a new element: Google can provide you high eCPMs for your advertising inventory. Tell me the number of page views you have and your targeted audience and  I will tell you how much money are you making. The name of the game is to produce good content at a reasonable cost. If you achieve this, you will enjoy the magic of the digital era: profit margins around 40%. Even Skype will roll out ads to bolster revenue ahead of IPO! It seems that finally online adversiting will pay for the party. Thanks to Google, the host.

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