The Washington post financial woes in the recent past could have been sorted out once and for all in 1998. At the time, Google Inc (NASDAQ:GOOGL) was only starting up and co-founders Sergey Brin and Larry page invited the then Washington Post’s vice president, Ralph Terkowitz, to ask for an investment package. At the time, the newspaper was raking millions from advertisements and sales.
Washington Posts Biggest Misstep
Washington Post decided to opt out of investing in the startup, stating it had made investments in other fields, a decision that has come to haunt the paper ten years later. It is one of the biggest missteps that the Washington Post made as Google Inc (NASDAQ:GOOGL) grew exponentially to become a multi-billion dollar company to the surprise of many.
The digital revolution has had far much effect on Newspapers as more people moved online on their day to day operations. The digital era has posed the biggest headwind for owners of traditional media especially newspapers on the advertisement front.
Going online has not restored newspapers profitability as they continue to face immense competition on the advertisement front from the likes of Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) In the late 1990’s, the Washington post’s made profits nearing $120 million, but is now grappling with losses nearing highs of $40 million.
Competition on Advertising
The total advertising revenue for all newspapers in the U.S fell from a high of $63.5 billion as of 2000 to lows of $23 billion as of 2013. Advertisers in early 2000 were happy to place theirs ads on Newspapers as there were no other mediums but not anymore, in the day and age of digital advertising.
The emergence of Google and Facebook Inc (NASDAQ:FB) that are able to sort audiences in specific criteria continues to be the biggest challenge for newspapers in terms of advertising revenue. Google Inc (NASDAQ:GOOGL)’s advertising revenue has grown from a mere $70 million as of 2001 to a high of $50.6 billion as of 2013. The situation is expected to get even worse for newspapers as more advertisers switch attention to digital advertising.
