Google’s chief executive officer spoke on Tuesday at the annual meeting of the Newspaper Association of America advising newspapers to innovate and think of ways of taking advantage of new technologies such as mobile phones.
Tension grew when the Google’s Eric Schmidt took questiones from the newspaper executives attending the conference. As expected, the questions were focused on one point: whether Google News’ strategy of using headlines and snippets is fair under copyright laws.
One of the first suggestions Schmidt emphasized to newspapers was that they are not just generators of professional content, but at the same time aggregators of new kinds of content from the Web. In Smith’s model of the news market, “newspapers become platforms for the technology to use their services."
The other key solution to survive and eventually prosper is innovation, said Schmidt. However, the Google CEO did not mention any plan of sharing the approximately $22 billion annual revenue it makes with news publishers. Instead, Smith gave the newspapers several recommendations on how to run their business.
The Associated Press said it plans to sue in order to protect its content. The major news agency said it would make efforts to require Web sites that use content generated by them to obtain permission and share revenue with them. “We don’t plan for anyone to use our content unless they pay for it,” said William Dean Singleton, chairman of The A.P. and chief executive of the MediaNews Group.
Referring to Google’s relation with The Associated Press Mr. Schmidt said that the Web search giant and the news agency are collaborating under a multimillion-dollar deal through which Google is paying AP to host and distributed its content.
"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. Schmidt urged newspapers to make an effort and think this issue in terms of what the readers want, because “if you piss off enough of them, you will not have any more."
Google’s CEO praised the newspapers for the way they embraced the Internet, but added that they kind of “dropped the ball” since then and allowed Google to take over the distribution of the content they generate.
Mr. Schmidt downplayed the newspapers’ argument that Google has been eroding their intellectual property rights. The chief executive said there will always be a tension surrounding fair use, but fair use is “a balance of interest in favor of the consumer."
However, news companies produce the professional content and Google gets its lion’s share of the revenue. It’s an equation that doesn’t sound very fair, unless you’re Google. But Google’s use of headlines and snippets, apart from generating controversy, also drove much more traffic to the newspapers’ Web sites, thus increasing the add-generated revenue of the sites.
If they want to declare war on Google, newspapers can easily block the traffic they get from Google’s search engine or Google News, but none of them has chosen to do that.
