Stop Whining, Start Competing
by David M. Cole
"We want to let go of this notion that for Apple
to win, Microsoft has to lose."
--Steven Jobs at MacWorld in August
The future of the newspaper industry's technology hinges so strongly on that sentence, it needs repeating: It isn't necessary for Microsoft to lose for Apple--or newspapers--to win.
Over the course of the last few months, the newspaper industry has been in a tizzy about Microsoft. In developing its Web sites, the harangue goes, the Redmond, Wash., company is going to steal our classifieds. What's more, they're already stealing our reporters!
The Macintosh community has been in a similar stew: Microsoft stole our ease-of-use, our programmers and just about our whole damn business.
Of course, both positions are extreme, but the key issue here is that there are two ways to look at Microsoft: that it is the Evil Empire or that it is merely the largest, wealthiest company with which you must compete.
The newspaper side of it started with a presentation Microsoft's Bill Gates gave at the NAA Annual Convention last April in Chicago. During the presentation, Gates said that his company didn't hire "reporters," and that it had no plans to compete with newspapers--specifically in the classified-advertising arena.
Of course, Microsoft has hired a number of experienced newspaper journalists to populate its new-media operations--including people who work at Sidewalk, the software giant's local entertainment-and-listings Web site. I put this one down to an issue of semantics--we have a tendency to call anyone who works in the newsroom a reporter, whether they are a critic or a listings-gatherer. Gates thinks of Woodward and Bernstein as reporters, and he was right that Microsoft doesn't hire that type of worker. It's just a confusion of terms.
A recent report in The Wall Street Journal referenced an internal Microsoft memo, which advocated that some Microsoft Web sites--specifically those aimed at automobiles and real estate--should start taking classifieds.
My sources at Microsoft point out two things: One, the overall size of Microsoft indicates there are lots of people who may--or may not--have the ability to set corporate policy, and whether the author of that memo is one of them is open to debate; two, that this was an internal memo written to explore all possibilities.
There is probably no question that some Microsoft Web sites will sell classified advertising. At this point it doesn't look like Sidewalk will, but even if it does, this shouldn't be a particular bother to newspapers.
Let's face facts: Microsoft is a competitor. No amount of whining is going to change that.
During the Apple-alliance coverage, someone wrote that Microsoft is like the weather--it can make its own rain. It's been a long time since newspapers in the United States had anything to do with the weather other than report it. We're now amongst the more humble pursuits of commerce, which is not to say that we're not powerful voices in our own communities, but that newspapers--either individually or as an industry--don't dominate the business landscape the way Microsoft does.
In light of Microsoft's competition with the newspaper business, I have been asked a lot lately whether newspapers should buy Microsoft products.
On the face of it, I can certainly see the argument for avoiding Microsoft products, because any profits coming from those products can be used against you to compete for local advertising dollars.
But let's assume you made a strategic evaluation of all the computing products available for your needs and determined that Microsoft sells the best one. Do you spend your money with Microsoft?
The answer is yes, as long as you have done the research. Don't buy Excel because it's Microsoft's spreadsheet. Buy Excel only if you have evaluated all the other spreadsheet products and have determined that it is the best product for you. Make an informed decision.
The word out of MacWorld was that Apple "sold out" when it took a $150 million nonvoting investment from Microsoft. This is simply not the case. The money (as well as an unspecified patent settlement) are token payments that represent only a few day's cash flow for either company. What Apple got from Microsoft was a vote of confidence, which was something Apple sorely needed.
By investing heavily in new media (one Microsoft executive estimated the company would lose "hundreds of millions of dollars" in interactive media this year), Microsoft is extending another vote of confidence.
Every newspaper publisher should sit up and take notice that Microsoft has confidence in new media. But for newspapers to win at new media, it isn't necessary that Microsoft has to lose.
Cole is a San Francisco-based newspaper consultant and editor of The Cole Papers, a monthly newsletter on technology, journalism and publishing. E-mail,dmc@colegroup.com; phone, (650) 994-2100; fax, (650) 994-2108. The opinions expressed are those of the author and not necessarily TechNews or NAA.