But just blocks from the Gates residence, there is a less murky but equally consequential crisis: the collapse of an African American-owned newspaper, the Bay State Banner. And while this sad narrative may affect African American and Latino publications most acutely, it will soon infect the entire publishing industry. And in this story, the antagonist’s villainous role is even clearer. It’s the story of a monopoly that holds the power to crush community newspapers at will.
For 44 years, the Banner published the news of the day in Boston from an African American perspective, provided a forum for our views and covered stories from busing in the 1970s to Barack Obama’s race for the White House in 2008. Through it all, the Banner was there, providing a voice for African Americans when traditional media ignored us.
In the end, the paper’s fate came down to simple economics. Publisher Melvin Miller, who founded the Banner in 1965, announced in early July that the paper would shut down due to declining ad revenue.
The economic crisis has put many newspapers, especially Afro-American owned newspapers in decline.
Many African American publications have bet their hopes for survival on the printing press of the 21st Century: the Internet. One African American-owned newspaper, the San Antonio Informer, traded in its press for an online presence and the hope that a small portion of the $20 billion advertisers spend on Internet ads each year would help keep this African American media force alive.
But just as African American media adjust to the new economics of publishing there’s a new threat waiting to destroy their hopes for survival, the Goliath of online advertising, Google.
According to even the Bush Justice Department, Google has a monopoly in online advertising, controlling nearly 80 percent of all revenue. Citing the need for more competition, the Bush administration stopped Google from trying to acquire its next largest competitor, Yahoo!, which controls little more than 10 percent of the ad revenue.
Google’s monopoly power comes in part from selling ad space on other people’s Websites – a newspaper’s, for instance. Google is the preeminent broker of these ads, allowing it to overcharge advertisers for running their ads on a newspapers website, while paying the online newspapers next to nothing. As the monopolist in this two sided market, it can gouge advertisers and raise the cost of while starving online publishers – like African American newspapers – whose work is responsible for generating Google’s enormous profits.
Google also has a monopoly in “keyword” advertising – ads that pop up on your search results each time you type a relevant key word – “automobile” for instance – into Google’s dominant search engine. In this non-competitive market, Google can charge would-be advertisers artificially high ad rates – costs that are ultimately passed onto consumers. Smaller retailers and publishers who cannot afford Google’s anticompetitive rates wither away in the online graveyard with limited advertising or search exposure.
With the Bush administration arguing that the only antidote to this monopoly is greater competition, Microsoft and Yahoo!, competitors that together serve just 20 percent of the search ad market, have decided to provide the Google behemoth that a small dose of competition by creating a partnership for keyword searches.
Advertisers and publishers alike have lauded the proposal arguing as a glass of water for a thirsty man in the dessert. Advertisers now may have more leverage in seeking more reasonable rates – savings that consumers will ultimately enjoy –and publishers will suffer less under the abusive yoke of a monopolist who can starve them of advertising revenue and put them into search obscurity for failing to pay Google’s ransom like fees.
The Bay State Banner may benefit as well. Just when it seemed this legendary publication was doomed a small loan was provided and local financiers might just help the paper survive. But the Banner and other African American publications seeking to survive online will only be able to keep writing and fighting for us if new competition can protect them from the online Goliath.
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