Tin Cup Time

According to a story in the Los Angeles Times, there seems to be little interest among the wealthy in Silicon Valley in 'investing' in the San Jose Mercury News. Among those who are concerned is former business/technology writer Dan Gillmor who abandoned the paper in order to come up with an alternative to the paper. On the heals of his own lack of success, Gillmor laments the fact that the Merc is being abandoned by those who were successful. Huh?

It's little wonder that Silicon Valley billionaires wouldn't be interested. Investments are generally seen as a way to increase wealth, not lose it. Sure the Merc makes money, but it doesn't take financial genius to see where things are going. Some of these geniuses have been on the receiving end of Mercury News articles that have alerted them to the problem. One top executive complained to me that based on his personal knowledge the paper was a highly unreliable source of information. If those in position to know so distrust the paper, why would they continue to believe others would be fooled. When your business model is selling unreliable information you might want to seek investment capital from the National Enquirer.

Newspaper writers want job security and they sell this by telling readers how valuable a local news product is. For that reason potential 'investors' from other media conglomerates, such as MediaNews or Gannett that focus on cost cutting, are seen as undesirable. Meanwhile inexperienced investor Yucaipa is desirable on the basis that they are employee friendly. This is delusional, but it may be useful in finding money to continue. Silicon Valley's billionaires fund a wide array of foundations. Foundations give money away without the need for a return. It might be time to get out the tin cup at the Mercury News.