There goes the neighborhood: Google moves in

GoogleMaps is offering local merchants the chance to add free, printable coupons to their listings there. Google will make money later by offering with keyword search ads. And they’re priming the pump with ValPak coupons.

This is a stake in the heart of local newspapers. Mind you, most of these small, local merchants never could afford to advertise in newspapers anyway because they are too big, too inefficient, and too expensive. But one of the promises of online was the opportunity to go hyperlocal — not just for content but, importantly, for advertising, to be able to target ads so finely and to eliminate the costs of sale and production so that these small guys could finally advertise with a newspaper company. That was one hope papers had for replacing the advertisers who have disappeared in classified, thanks to the internet, and retail, thanks to consolidation, Wal-Mart, and the internet, too. Strategically, some on the newspaper business understood this. But tactically — take it from me — it was nearly impossible to implement because newspaper business people are incapable of thinking small. They’ve spent so many years just maintaining big accounts that had nowhere else to advertise that they don’t know how to replace them with hundreds and then thousands of smaller accounts.

We tend to concentrate on the editorial side of newspapering when we lament the lack of progress to update the institutions. But editors are catching on. The problem is that publishers often are not. And they don’t have bloggers and consultants and professors and other obnoxious people pestering them at every turn. They just keep going to golf tournaments while Google steals their business. It’s time to pester the publishers. Wake up, gentlemen: You have a new neighbor.

LATER: And here‘s Peter Krasilovsky on the Google gambit.