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Google CEO advises newspapers to innovate

Eric Schmidt tells print media to to make reading online more appealing and offer not just the usual stories but whatever content people need.

April 08, 2009|David Sarno

Google Inc. Chief Executive Eric Schmidt delivered Tuesday's closing keynote at the Newspaper Assn. of America annual conference in San Diego, conjuring up visions of an open, interactive future for the audience of newspeople.

In order to move forward, he said, newspapers will have to get used to the idea that they are not just generators of trusted, professional content, but also aggregators of the new kinds of content the Web has enabled.

Whatever information consumers need is fair game, whether it's collective knowledge storehouses like Wikipedia, user-generated blogs and video, or Twitter-like systems for real-time conversation.

"In that model, newspapers become platforms for the technology to use their services," Schmidt said, "to build businesses on top of them, and also to interlink -- hyperlink -- all of the different information sources that end-users will take."

Perhaps not surprisingly for the leader of one of the most inventive technology companies of the 21st century, Schmidt's prescription for newspapers -- an industry that has struggled to escape a dying, century-old business model -- is innovation.

What Schmidt did not mention, however, was any plan to share Google's nearly $22 billion in annual revenue with news publishers, whose content forms the basis for the search company's highly trafficked Google News page.

"You're talking to a group of publishers who think they're on a desert island and trying to figure out how to get off," said Ken Doctor, an analyst at Outsell Inc., a media research and advisory firm. "And you're telling them how to write a five-year business plan."

Instead of sending news publishers a direct lifeboat, Schmidt made a series of broad recommendations -- for starters, finding a way to make reading online more appealing.

"From my perspective, the online experience can be thought of as terrible compared to what I view as this wonderful experience with magazines and newspapers," he said.

The day after the Associated Press announced its intentions to more aggressively control the dissemination of proprietary news content, Schmidt noted that the natural laws that govern digital information flows make that kind of control difficult.

"One of the fundamental problems with the Internet is that it doesn't respect traditional scarcity structures," he said. "It's very hard to hold information back." The trick, he said, is to worry less about controlling the content, and more about making a profit from it.

"We think the answer is advertising," Schmidt said, noting that Google's ad business accounts for 98% of its revenue, so "I guess we have a bias."

On the recent fuss over Google's relationship with the AP, Schmidt invoked the multimillion-dollar deal through which his company pays the news association to host and distribute its content.

"I was a little confused," he said. "I'm not quite sure what they were referring to."

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david.sarno@latimes.com

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