Google pays $51.7m for newspaper destruction metaphor

Project Will Power eats paper mill

homeless man with sign

If there's one moment that sums up the gradual destruction of the world's newspapers, this is it.

Google, the world's largest online ad broker, has just paid neatly $52 million for a 53-year-old paper mill in southern Finland, hoping to replace it with a data center.

This morning, global paper-maker Stora Enso told the world that the online ad giant is shelling out 40 million euros for its Summa Mill in Kymenlaakso, Finland and most of the surrounding land.

Google's Mountain View Chocolate Factory did not immediately respond to a request for comment. But a European spokeswoman tells Reuters the company is "considering" the possibility of building a data center on the mill site.

Stora Enso shut down its Summa Mill early last year, citing a decrease in newsprint and magazine-paper production that lead to "persistent losses in recent years and poor long-term profitability prospects."

The company also cited the rising cost of wood. But we all know the mill was killed by the online ad broker that eventually bought its rotting carcass. In the recent years, the world's news readers have jumped from the printed page to Google's search-engine monopoly - and the ad dollars have jumped with them.

Google CEO Eric Schmidt says he wants to save newspapers from himself. But he has no idea how.

"We have a mechanism that enhances online subscriptions, but part of the reason it doesn't take off is that the culture of the Internet is that information wants to be free," the Google Willy Wonka recently told Fortune. "We've tried to get newspapers to have more tightly integrated products with ours. We'd like to help them better monetize their customer base. We have tools that make that easier. I wish I had a brilliant idea, but I don't. These little things help, but they don't fundamentally solve the problem."

Two years ago, Google launched a Print Ads programs designed to help newspapers sell more ads. But it went tits up last month.

Schmidt is happy to say he could purchase the world's newspapers. But he's unhappy to say this wouldn't make sense: "The good news is we could purchase them. We have the cash. But I don't think our purchasing a newspaper would solve the business problems. It would help solidify the ownership structure, but it doesn't solve the underlying problem in the business. Until we can answer that question we're in this uncomfortable conversation."

In the meantime, he might as well buy up the world's failing paper mills and turn them into super-secret Google data centers. This will bring Google even more online ad revenue and make life even harder for the newspapers he hopes to save.

Then he can buy more paper mills. And so on. And so forth.

Google already operates 33 data centers across the globe and it's piecing together three more. According to an ex-employee, it's now the norm for Google to construct its data centers by piecing together intermodal shipping containers pre-packed with custom-built servers and cooling gear.

In 2003, Google filed for a patent on this breed of modular data center, and the patent was granted in October 2007. Inside the Mountain View Chocolate Factory, Google calls it Project Will Power. ®

Update

Kay Oberbeck, Google's Head of Communications and Public Affairs for Northern and Central Europe, has responded to our inquiry about the Summa Mill site. "We are looking at the opportunities offered by this site, and yesterday we signed agreements with the Stora Enso group of companies to purchase a portion of the Summa Mill land and related assets," she said.

"There is more work to do on the legal side before the deal is done and the transaction is finally closed.We are currently considering building a data center at this site, and, as with any sort of construction project, there are a number of contingencies to be resolved and plans to be put in place. We don't have anything more to announce at this time.

"Google is a truly international company and we are constantly working to provide an ever better user experience for our users in Europe and elsewhere. With our data center in St Ghislain, Belgium and our recent land acquisition in Kronstorf, Austria, the signing yesterday represents an additional step in this direction."

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