"Why is a media titan like The New York Times Co. -- already stretched thin by the challenges of a faltering business model -- dabbling in community news, tradi

"Why is a media titan like The New York Times Co. -- already stretched thin by the challenges of a faltering business model -- dabbling in community news, traditionally the bottom of the journalistic food chain? Call it the Google Effect. The search giant's model, described by author John Battelle as "a billion dollars, one nickel at a time," is a perfect description of how media companies hope to take tiny sources of local revenue and roll them up into big money." I think the New York times is missing the point of how Google makes money and how their income model works. The reason Google makes obscene amounts of money even though they only make a nickel per customer is twofold: They have lots of customers, and their expenses per customer is less than a nickel. While I agree that local advertising is a great potential untapped revenue stream that can be harnessed through local news I think they have a bad business model. It appears that they try to set up an old-fashioned news outfit complete with editors, journalists et al. This adds substantial cost to the venture, and all of a sudden you need to make more than a nickel per customer to cover your costs. In short it looks like an old media empire misunderstanding online businessmodels, namely create a service that might cost you a lot in initial effort but will scale (almost) effortlessly to millions of users, thus making your cost per customer approach zero. An editor and a few journalists for every community isn't cheap and doesn't scale.