Green Taxi

At this point it looks inevitable that Tribune Co will be filing for Bankruptcy. There has been much speculation over the past several weeks and BusinessWeek is today reporting that CEO Sam Zell is considering bankruptcy seriously.

The Tribune story seems to be a bit complex, so let me simplify.  The Tribune was taken private just over a year ago by employees and other investors. The buyout valued the company at roughly $8.3 billion and now the company has about $11.8 billion in debt due to that buyout and other losses. The company has been losing money at an increasing pace. Oh, and it is an “old” and “big” media company in every sense of the terms. They manage the LA Times, the Chicago Tribune, the Baltimore Sun, the Orlando Sentinel, over 20 television stations, Apartments.com, Cars.com and many more big businesses.

There will or could be huge shifts in the domain industry from this bankruptcy. The underlying businesses will be forced to clean up shop, either as they are sold off, shut down completely, or made more efficient.

In the geodomain industry this means major competitors for city geodomains could be falling off the radar. No matter what happens with the papers themselves, there will also be many top, local writers and reporters available for hire on the cheap after the layoffs begin. The city geodomains in these areas should act smartly here.

As an example, if the LA Times has to close down or at least lay off a lot of staff, LosAngeles.com should look to hire many of its writers. The content they could provide is gold.  The key is to not structure the business according to the old salary structure.  Instead, LosAngeles.com should treat these writers almost as bloggers and pay a much smaller salary and a much larger portion of revenues. The writers could be paid off of the ads that are sold on the pages of their articles or other affiliate revenues resulting from that authors expertise.

The same could also be done via video.  Tribune owns KTLA, a local Los Angeles news channel, along with roughly 20 other big city stations across the nation.  There could be reporters and producers being laid off that could easily make the jump to Internet video news.

Now, unfortunately LosAngeles.com, Chicago.com, Baltimore.com, and Orlando.com have been slow to become content providers in terms of live news.  The technology behind Chicago.com could make it happen.  Boulevards New Media, the owner of LosAngeles.com has the technical structure in place to make this jump easily as well.  Currently they are streaming RSS feeds from local papers, including the LA Times, and thus acting as content brokers sending traffic away from their sites. Why not create the content directly and cheaply yourself through this opportunity and market yourself as THE Los Angeles news provider? The opportunity for this sort of progression is slowly beginning to present itself.

On the other side of the Tribune situation is what will happen with the category killer generics such as Apartments.com and Cars.com. If these are thrown into the firesale, there is an obvious opportunity for an investor to pick up these top assets of the business. Most likely these businesses will be salvaged as they have been optimized and must be generating steady revenue. I still think there is a lot more those sites could do, but the difference in terms of business optimization between the LA Times and Cars.com is night and day. If they become available or are sold, I will not be alone in analyzing those businesses. Until then, let’s focused on the distressed side of the business.

This is the perfect storm setup for the next quantum leap in Internet media.  The slow death of old media has been in the works for several years now.  With this bankruptcy and the geodomains in place in each prospective market, the stars are aligned for the geodomain industry to facilitate this transition into new media perfectly.  Personally, I think the right business strategies implemented from these geodomains have the ability to save a major industry in this staggering economy.  The viewers still want the content, they just want it in the right location (a simple web destination) and correct format (short news blurbs and 60 second video splashes).  The business plan must change, which even Sam Zell agrees with, and geodomain businesses have proven revenue models now (see Richmond.com) and the room to grow.  If this transition does not take place now, it will still happen, only at a more gradual pace.  But big change could bring ideas into light quickly and could create a whole new industry for our economy to lean on.

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