Business Week” A Cautionary Tale for Old Media. The collapse of Silicon Valley’s daily newspaper is in many ways the story of American newspapers in the 21st century. The industry has reached a near-crisis point. Many dailies are losing circulation at an alarming rate, and local newspaper ad spending fell 3.1% last year, to $24.4 billion, while Internet advertising rose 17.3%, to $9.8 billion, according to Advertising Age.
But the shivers rippling through the Mercury News also serve as a dramatic example of what happens when industry leaders get complacent in the face of fundamental shifts. Andy Grove, who helped sow the Internet revolution when CEO of Intel (INTC ), says that cross-industry disruptions follow a predictable course: Executives ignore the challenges. Then they try to resist. Only when it’s too late do they make radical changes. Grove, who now teaches a strategy course at Stanford University’s School of Business, summarizes the newspaper industry’s prospects: “Your doctor says you’re going to die, but if you don’t smoke, you’ll live a little longer.”
