Seattle Times’ Brier Dudley: “Zillow is emerging as the latest big threat to newspapers, which are watching a series of Internet companies go after their dominant share of advertising and undercutting them with free services.”
As someone who worked 38 years for newspapers, it’s tough to watch a hallowed industry melt to a puddle. If papers saw themselves as a service rather than a product, they might have a chance in the online game. Brier makes several good points about the changing marketplace, not all of them consistent: He goes from a header warning “Watch out, newspapers!” to a concluding sentence: “It’s hard to compete with free…but the site also has a long, long way to go before it has papers’ reach and market penetration.” (I guess Brier didn’t need a disclosure statement there!)
And that’s just the problem. If newspapers simply take the money while letting “free” services compete on price (or non-price), they’ll lose mindshare and brand value when, inevitably, critical mass shifts. Craigslist would not exist (in its current popularity) if papers had simply started giving away classifieds. But they couldn’t leave the revenues on the table.
(Another debate is whether, particularly in a down market, the Internet is changing the business of real-estate. I know three people who sold their homes via Craigslist and were much happier doing so — starting with, no seller’s commission. Dudley rightly notes the “channel conflict” Zillow faces as well in doing brokerage deals: Whose interests is Zillow defending, buyers or sellers?)
Dudley ID’s the progression here: Craigslist, Google, Yahoo, Zillow. I’d add Facebook to the list as well. But the real threat to newspapers began with the World Wide Web. The Web is the newspaper. Everything else is just a tweak in the machine.