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Schmidt to Newspapers: Google Can Help

by Terrence O'Brien on December 3, 2009 at 05:00 PM

Google News is a great tool for searching out the latest information about current events. But it's no secret that some news outlets (particularly newspapers) are growing irate with their inability to cash in online like Google has. The search company is raking in cash from ads displayed alongside search results that link to news outlets' stories. One notable media mogul, Rupert Murdoch, has threatened to remove all content produced by his various outlets from the Google index entirely.

Murdoch gave Google CEO, Eric Schmidt, a chance to defend his company and explain how Google could actually help newspapers in an editorial published in the Wall Street Journal. Schmidt explains that far from being competitors, Google and newspapers are symbiotic organisms relying on one another to drive traffic, sell ads, and deliver content. Schmidt points out that while Google News generates a billion clicks per month for online news publishers (with an additional three billion coming from other Google tools) ads displayed alongside news searches generate only the tiniest fraction of the company's revenue. And logically this makes sense -- what ad could possibly seem appropriate when searching for "Afghanistan" or "car bomb?"

Schmidt says that it's natural to look for someone to blame, but that Google isn't stealing revenue from newspapers. Searches on Google show only a headline and quick clip (outside of some outlets with whom it has licensing deals), so the reader must still click through to the publisher's Web site to read the whole article. He advocates developing a new revenue model that involves a combination of subscriptions, ads, and micro-payments, but above, all sees the unstoppable march of technology as a challenge to newspapers to provide compelling content.

As hard as it may be for media execs to hear, Schmidt may be on to something. The solution doesn't lie in finger-pointing, or removing content from Google searches, it lies in innovation. As he points out, "Video didn't kill the radio star. It created a whole new additional industry." [From: The Wall Street Journal]

Tags: Eric Schmidt, EricSchmidt, google, newspaper, top, wall street journal, WallStreetJournal

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