The Four

hermes.com could get more traffic. We committed one of the great
missteps in modern business history. Overnight we took a luxury
brand, spread it through sewer-like distribution, and let the sewer
owner charge less for it than we were charging in our own store,
through subscriptions.
I was resolute, armed with data, and I represented the largest
shareholder. I fantasized that one day there would be case studies
about how an angry professor helped the Gray Lady, and journalism as
a bonus. I made the case to the board that we needed to shut off
Google’s crawlers and create a global consortium of premium content.
And in the hour that followed, there actually was semi-serious debate.
It featured a group of mostly middle-aged, highly pedigreed gridiron
greats who didn’t know a fucking thing about technology. To her
credit, Janet took the suggestion seriously and said management
would evaluate my proposal.
A few weeks later the board received a thoughtful memo that said
the New York Times should not shut off the search engine, as the
paper couldn’t risk angering Google, because About.com depended on
Google for traffic. If we turned off Google, Google might counter by
tweaking its algorithm, relegating About to search engine purgatory.
This, in a nutshell, is the problem with conglomerates—and the
Innovator’s Dilemma. The whole is often less than the sum of its parts.
That was true both of the Times and About. In a sense, we and Google
were both using each other. Google used our content to attract billions
of clicks for its ads, and we used their search algorithm to drive traffic
to About. However, Google had far greater power. It ruled like a lord
over a crucial swath of the internet. We were the equivalent of tenant
farmers on that turf. Our fate was determined from the start.
It took a while, but in February 2011, Google finally tired of the
antics of content farms, including About.com, and it swatted them
away. The search giant performed a “Panda algorithm update,” which
exiled much of the content farm traffic, and business, into Outer
Oblivion. With just one tweak, Google pummeled the Times, diverting
millions in online revenue to other sites and cutting About’s value
dramatically. It appears that, unlike us, Google was making business
decisions based on the long-term value of the company, unafraid of
our reaction. About was worth $1 billion before the update, and less