Eric Schmidt fights back the Newspaper Industry attacks by defending Google’s role in News distribution with a full page opinion piece in the Wall Street Journal. He argues that Google is not profiting from news “The claim that we’re making big profits on the back of newspapers also misrepresents the reality” and blames the Newspaper business for their own demise by quoting Rupert Murdoch “It is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.” At the core of his argument is the idea that newspapers can choose to block links and enforce subscriptions, that Google is providing a value added service through distribution, and the technology Google provides is good for the industry. I happen to agree with all of this, but he adds something that I found a bit strange:
The best newspapers have always held up a mirror to their communities. Now they can offer a digital place for their readers to congregate and talk. And just as we have seen different models of payment for TV as choice has increased and new providers have become involved, I believe we will see the same with news. We could easily see free access for mass-market content funded from advertising alongside the equivalent of subscription and pay-for-view for material with a niche readership.
Now as I read that, I can’t help but wonder if he is telling the newspaper industry to be more like Google. After all, Google is an ad based model, it is building social networks and above all, it is the number one aggregated distributor. People start there news search on Google, not at the New York Times. That’s why the newspapers are suffering – and everyone else in the publishing business; Google is the front door. The TV networks could rely on advertising because they owned the eyeballs – now Google does, so should the newspaper industry try and become the next Google? Of course what he means is that they should use Google Adwords, create communities on orkut, and ultimately be part of Google Wave (see my other post on Wave.) In summary Schmidt says:
I certainly don’t believe that the Internet will mean the death of news. Through innovation and technology, it can endure with newfound profitability and vitality. Video didn’t kill the radio star. It created a whole new additional industry.
Perhaps news won’t die, but they may end up loosing complete control of distribution. Is that a bad thing? I don’t know but radio sure hasn’t gotten better since video came around….