Q: What will become of the New York Times?

A: Google.

In our previous post on the fall of the New York Times, a rude commenter actually asked a legitimate question: 'How can you possibly know what makes business sense to the NY Times?' We dumped the shrill comment, but the question is interesting.

Of course, it's the WRONG question. Who cares 'what makes business sense to the Times'? The paper's fortunes are rapidly deteriorating - its value is down seventy percent over the past five years. The course they are following is a disaster, and it has been for a long time. The NY Times' management is the last place to look for a business-saving idea.

The RIGHT question is 'How can we possibly know what makes business sense FOR the NY Times'? Let's start with two words: Warren Buffet.

Buffet will not invest in a business unless it has some unique advantage that is hard for a competitor to replicate, or has a significant barrier to entry (such as investment dollars, unique technology, or a meaningful first-to-market advantage).

By dumping news-gatherers in favor of columnists, the Times has chosen to compete in the area of the news business with the LOWEST barriers to entry. Times' columnists, traditionally, were not opinion-leaders not because they were 'right' more often than any other media source. Times' editorials and columnists have been about as howlingly wrong as any similar group of editorial opinion-leaders over the years. The Times has been able to set the opinion standard not because they were 'right' more often, but because they controlled the information channel.

Today, it is impossible for a newspaper to control the information channel. To the degree that the Times and their 'name' columnists are a brand, they still have influence. But the future of that influence is as limited as that of Polaroid film once the first consumer digital cameras came to market. The Times, looking forward, simply cannot force its opinions on the world any longer.

Understandably, that is a future the Times refuses to consider. Instead, they are looking backward, clinging to advantages they once had as if, by hanging on, those advantages would return to them. The fax will make a comeback against email before the conditions that made the Times dominant return. In hanging on to the past, they are choosing to compete in the worst possible arena, violating Buffet's most basic principles of a fiscally successful business.

The Times' stubbornness is institutional, and is typical of a newspaper industry that does not understand that its past successes were born more of their monopoly than any other factor. This is, of course, a bitter pill to swallow, but a necessary one.

Times' management has made it clear that they will go down with the ship, and the ship is indeed going down. So: What will become of the New York Times?

Google will acquire it.

Once the Times' stock sinks to a certain point (we don't know what that point is, but it's around here somewhere), it will be an attractive target for Google. An acquisition, by Google or someone else (there ARE other possibilities, ranging from Yahoo to Rupert Murdoch) is the only way to save the paper. Not because the acquirer would bring in vast sums of money to plug the leaks in the current business model, but because only an acquisition can force the institutional and philosophical changes the paper needs.

Before we get into what those changes are, let's note that this is not the first time it's been suggested that Google might or should buy the Times organization. We have found at least one similar idea in a cursory Google search:

RealClearMarkets: "In the last five years, the New York Times has declined in value by an astonishing 70 percent... The company that has the most to gain from buying the New York Times is Google. If it proffered a Murdoch-like, no-auction bid of $4 billion, wouldn't the Sulzberger family have to accept it? Every single class B shareholder would accept the offer. It's their only exit...

What's in it for Google? Well, for one thing, it's cheap. Sell off the New England properties and the real cost is $3 billion. That's not much money to buy one of the premier brands of the information age. It also comes with some excellent real estate, which further reduces the risk. And happily enough, it will probably get cheaper in the coming months. So the price is definitely right...

A Google acquisition of the New York Times would... attract people of great talent to a fascinating and challenging project: the reinvention of a great newspaper across multiple platforms and within a variety of applications."

Another site, Condé Nast's 'Portfolio.com', quotes Google's Eric Schmidt on this subject. Schmidt dismisses the idea out of hand, but this should not be taken seriously. The last thing Google would do is announce its intention to buy the Times - especially not with the company's stock dropping like a rock. (The interview with Schmidt came in the aftermath of the recent RealClearMarkets article.)

Valleywag also followed up the RCM piece with its usual snarky take: "Bloggers hope Google will buy NY Times, hire them". (We wonder how this writer thinks s/he has the right to be smug - s/he is, after all, paid by Nick Denton, and not earning an independent living. Projecting much?)

So, what's in this for the Times? Primarily, a complete reworking of the business model from a fresh perspective, unshackled by outdated, unsupported concepts, by 'tradition' - and by the Sulzbergers, who are running it into the ground.

How would the Times be reworked? This is an issue we touched on a couple of years ago. But we've seen changes in the blogosphere, and have altered our approach a bit. The New New York Times would become more of an information-gathering organization, like AP or Rutgers, except that they would also print their own paper. Google would use its skills and corporate culture to place the Times firmly at the center of the news community. They would not 'hire' bloggers, as Valleywag satirically suggested, but they would 'Times-certify' them, just as they now certify Google News sources.

'Times-certified' bloggers would work with Times' staffers, who would be 'in charge' of working with bloggers in different regions of the country. Those bloggers would get placement for their unique stories on the Times' site, at the editorial discretion of the Times. Bloggers would be stringers, responsible for making their own living, but would be paid by the performance of their pieces on the Times' site. Google already provides bloggers with the free blogging platform, Blogger. Through Blogger, 'Times-certified' bloggers would receive auto-installed targeted ads, maintain editorial contact with Times staffers, be put in wiki-contact with other 'Times' bloggers known to be working on similar stories, and enjoy other services and resources yet to be determined. These bloggers would be sovereign on their own sites, but would enjoy traffic and notoriety from links to their Times' posts, and of course would be compensated for stories that made the Times. Obviously, by failing to maintain a certain standard in their work and on their blog, they could lose their certification and the advantages of being linked to the Times.

This is not very different from the way blogging empires like Gawker or Pajamas Media are run today. The competition to gain placement for stories is not dissimilar to the competition for Digg's front page.

With more sources of news flowing into the Times' site, the Times will have to be far more user-customized than it is now. Online users - and perhaps even subscribers to the print edition - will be offered stories based less on editorial preference, and more on what the user has clicked on in the past. (All stories will be available to all online users - it's just a matter of preferential placement.) This will be the most significant cultural change in the New New York Times - it will be far less inclined to push a 'Times-approved', centrally-mandated opinion on its users. (The degree to which this happens will of course depend on how well this strategy is carried out.) Stories on the same subject, but from different points of view, will often be available. This diversity, and likely controversy, will be good and healthy for the news community, from which most of the paper's revenue will be generated.

Clearly, what the Times gets from all this is survival. What does Google get?

Google gets quite a bit, actually. It gets a well-known brand, with branches outside New York, at a relatively bargain-basement price. (Unless, of course, Murdoch turns it into a bidding war.) Unless the Sulzbergers completely dismantle it, Google  gets a trained, well-educated information-gathering machine, which it can expand through intelligent leveraging of its existing Blogger, Ad Sense, YouTube and DoubleClick properties. This suits Google's core function as a search engine, as well as the way it has gone about its business in recent years.

WILL this happen? Not if Google really doesn't want it to. But we think Google is interested, despite Eric Schmidt's protests to the contrary. The Times fits into Google's sociopolitical culture. (It's also favored by Steve Jobs, who has significant business relationships with Google.) The Times fits into Google's overall mission, and is a good match for the major strategic acquisitions it has made in recent years.

WILL anyone else be interested in acquiring the Times, and bidding against Google? Well, anyone seeking control of the paper must (a) raise several billion dollars without too much pain, (b) have a fighting chance of turning the paper around, and (c) not scare off the staff.

Aside from Google (or maybe Yahoo), we can't think of anyone who fits that description.

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THIS AD AGE series promises to have some input on Google's view of newspapers in a future edition, and may be worth following.

On reflecting further, we should note that Yahoo, instead, may acquire The Times. Same basic principles apply. We've heard here and there (and agree) that Yahoo's strength is news.

AND: It's not the 'newspaper business' - it's the NEWSPAPER - While NYT declines, the WSJ gains (slightly). (Editor & Publisher, may go behind firewall) The difference? The gaining (or at least stable) papers (WSJ, USA Today) had more hard news, the decliners relied more on opinion. (The other winner listed was the Baltimore Sun, which we are not familiar with. WIthout knowing the factors involved, we can't comment on them.)

RELATED: NYT in proxy fight (PDF), A hedge fund manager goes after the paper, more speculation re Google (Bloomberg is also invoked as a savior/suitor), and has Murdoch been thinking about jumping in?

LESS RELATED: Angry journalist.