News Herald

So.  Alea iacta est, as Julius Caesar might have said, if there had been a major Roman chariot manufacturer in putative need of nationalization.  The nation's largest automaker, our most iconic firm, is bankrupt,  GM and Citigroup exit the Dow in favor of Travelers and Cisco. 

The first obvious thing to say is that the only alternative the US government probably had to this massively expensive reorganization was probably liquidation.  I take seriously the claims that there was no DIP financing available for the automakers.

However.  The reason there was no DIP financing available is, at least in part, that there's no obvious upside here.  The government is acting as if GM's main problem is that it stubbornly refused to enter the lucrative market for small, fuel-efficient cars.  But the market for small, fuel efficient cars is not lucrative--they're the cars with the thinnest margins.  And no one's making it up on volume, either:  at the height of last year's oil spike, when barrels of Brent Crude were being quoted in first-born sons, small cars soared to . . . 20% of the American market.  Yes, there was a glut of SUVs, but that's because American companies were making a lot of SUVs.  Foreign companies make money on small cars because they develop them for lucrative home markets before modifying them for American production.

GM's main problem is not that the market is unreasonably unwilling to finance a potentially profitable company.  Nor that it can't produce an awesome small car that shockingly few people want to buy.  (Believe me, as the owner of a tiny, ultra-efficient car, I would that there were higher demand for my rapidly depreciating asset).  GM's main problems are

1)  A terrible, bloated cost structure
2)  A terrible, bloated bureaucracy
3)  A bunch of meh car lines

Which of these is the government going to solve?  That terrible, bloated cost structure supports a bloated union whose jobs are the entire rationale for the government intervention.  Leaning on the parts suppliers just risks UAW jobs further down the supply chain.  Maybe we can take it out of the budget for copy paper and pencils.

Forgive me if I am skeptical that the government is going to show GM how to streamline its bureaucracy.  Nor do governments historically have a good record as cutting-edge auto designers.

All the government can give GM is money.  Our money.  Perhaps we should change the name to American Leyland.

In the race to build a better blogging business model, GigaOm is hoping to sprint into the lead. On May 28, GigaOm Network said it will start selling subscriptions alongside the site's existing free, widely read tech blogs.

For $79 a year, the new GigaOm Pro will offer access to premium content, including research reports and long-form stories in such areas as wireless technology and cloud computing.

GigaOm is at the forefront of a push by bloggers and other online information providers to find new ways to generate revenue as demand for online advertising slumps. Online ad revenue at the four largest Web portals, Google, Yahoo!, Microsoft's MSN, and AOL, fell 3.3 percent in the first quarter, according to consultant eMarketer. Newspapers and magazines are under even greater pressure as their circulation numbers dip and print ad sales plummet.

Ad sales rose in the first quarter for closely held GigaOm, says Paul Walborsky, CEO of Giga Omni Media. Still, the site is hedging its bets. "We believe that new media companies out there are going to have multiple revenue sources," he says. The company, which boasts about 3 million unique visitors to its site a month, also makes money from coordinating industry events. GigaOm provides blog content to BusinessWeek.com.

Information providers have a mixed record in getting users to pay for online content. The Wall Street Journal is one of the few newspapers that charges a subscription for online content. Others, including The New York Times, have ceased charging readers for access to some content.

Murdoch: Time To "Pay Handsomely"

The Wall Street Journal is looking to expand paid offerings. In a May 6 earnings call, Rupert Murdoch, CEO of Journal owner New Corp., said his company will start charging users for access to the newspaper via Apple iPhone. "In just three weeks, 360,000 people have...