JG: If I had to pick whether the newspapers should have invested heavily in television or the Web, I would have picked television. Just because it plays more to their strengths. And some did. Hearst has a very interesting portfolio in TV. The Times, unfortunately, got in on it too late. Many newspapers—because of their nature—bought into local broadcasts, which turned out to be irrelevant because everybody switched to cable. But, all things being equal, a cable channel turns out to be extraordinarily lucrative.

Creating television content is far more expensive than creating print content. So any place where the terms of engagement require cash favors the big guy over the little guy. The streaming of video content is very expensive. The distribution of content over cable is practically free- every incremental broadcast costs very little. Every stream that YouTube gives us costs them money. So television is, believe it or not, a more efficient way of distributing (visual) content, strictly from a cost perspective. Now from the user’s perspective it’s not. What the user really wants to do is do whatever they want whenever they want. That’s why people love YouTube.

Currently, the vast majority of content that people consume on the Internet is text. That is starting to change. We can’t know whether or not the YouTubes and the Hulus of the world will survive, because their business models are not viable. The Huffington Posts and the Daily Kos’s of the world will survive—at least for a while—because it doesn’t cost that much to distribute what they distribute.

In some way, a model that’s composed of mostly volunteers creating mostly crappy content is going to make some amount of money. Will it make great dollars? Probably not.

DD: What about advertising?

JG: Advertising on the Web is still massively overvalued. In general, the fact that it’s so incredibly inexpensive to create content is a big problem for the advertisers. We’re in a very difficult place with advertising. On the basis of sharing in whatever transactional profit the advertiser makes, there is a very healthy advertising market. The problem is that it’s very difficult to create any streams of revenue.

The main problem is that the banner ad model is just completely unviable. It’s just not valuable enough for the advertisers.

DD: Is there anything out there that could be of significant value to advertisers?

JG: It’s leads. If you have the vertical baby site and you go in and type in stroller and then you can get offers from stroller guys, that you can sell for a meaningful percentage.

DD: So, if selling leads is the way to make money with advertisers, is social media the place to do that?

JG: I think there are a lot of interesting things about Twitter. Twitter dovetails very nicely with marketers’ desire, after years of frustration, to have a direct relationship with their potential consumers. You don’t use the middleman. I’m going to be a great source of information on travel or shoes and people will come to me. Again, marketers are doing that everywhere. The thing with Twitter that’s so interesting is that you can do it so inexpensively. It’s the easiest to use platform, it’s the cheapest to use platform. It’s just incredibly viral, so your content gets spread wide without a whole lot of effort on the marketers’ part.

DD: Twitter as a source for news and marketing has a lot of verification problems, doesn’t it? Have we fooled ourselves into thinking that people care if their information is verified?

JG: I think people care. I don’t think the reputation of the media is in such high regard that they would be the solution to that problem. Verifiability is a very big problem. Twitter effectively created a lot of those problems. But, it’s not clear to me that, if The New York Times created a Twitter account, that people would assume that everything on there was true.

DD: So, if it is by far the most valuable marketing platform, is Twitter “it” for funding news content?

JG: No, nothing’s “it.” What’s it is that you turn on your device and—based on topics and places that you are interested in—it tells you that trusted sources have new information for you and you can basically see through those trusted sources in real time as they are interacting with the world.

Diana Dellamere is a former CJR staff writer.