I’m a bit tardy in catching up on Sam Zell’s deal for the Chicago Tribune, which Clear Thinkers favorites the WSJ’s Holman Jenkins ($) and Larry Ribstein have already analyzed with their usual sharp insight. As Jenkins and Professor Ribstein both note, the deal is potentially quite sweet for Zell and, of course, the sale of the Cubs will be a reasonably lucrative sideshow. However, the structure of the deal is that the Tribune employees will be the main owners of newspaper while Zell will control it. So, it’s pretty important to the employee-owners that Zell knows what he is doing in the quickly-changing media business. Based on Zell’s comments in this Washington Post article, my sense is that Tribune employees have much to be worried about:

It’s time for newspapers to stop giving away their stories to popular search engines such as Google, according to Samuel Zell, the real estate magnate whose bid for Tribune Co. was accepted this week.
In conversations before and after a speech Zell delivered Thursday night at Stanford Law School in Palo Alto, Calif., the billionaire said newspapers could not economically sustain the practice of allowing their articles, photos and other content to be used free by other Internet news aggregators.
“If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?” Zell said during the question period after his speech. “Not very.”
Newspapers have allowed Google to use their articles in exchange for a small cut of advertising revenue, but search engines also help to distribute their content to wider online audiences.

My goodness, what on earth is this all about? First, I don’t know much about Google News’ business model, but I’m pretty sure that it does not involve giving newspapers a cut of ad revenue. The reason I know this? Because I use Google News frequently and I haven’t noticed any advertising. Likewise, Google doesn’t steal media content. Rather, it simply indexes the content. Does Zell not understand the difference?
Zell is a smart guy with a track record of success in his ventures. But Zell’s comments indicate that he does not yet appreciate how people find information on the Internet, which is a pretty darn important thing to understand if you are going to run a company that produces a tiny bit of that sea of information. If Zell wants to make money with the Tribune online, then my sense is that he better make friends with Google, not threaten it.