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Google CEO Eric Schmidt to newspapers: Innovate your way out of it

April 7, 2009 |  1:08 pm
Schmidyt
Google CEO Eric Schmidt at the White House in January. Credit: Matthew Cavanaugh / EPA

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

In order to move themselves 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 information the Web has enabled -- the collectively edited knowledge structures like Wikipedia, and user-generated information like blogs, images and online video. 

"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. 

"Innovation is bizarre because it's very difficult to centrally plan," he said. "But you can architect a structure where innovation is welcome, and where it's taken advantage of."

Among his recommendations were ...

... taking advantage of mobile technology as a distribution mechanism, beginning to think of stories not as happening on a given day, but as continuous and "living," and, of course, improving the experience of  reading online.

"We need to reinvent the way the Web delivers this content," he said, "so that you can have the kind of experience, when people are wandering around with their phone and so forth, that you can have with a printed magazine.

"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."

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. It's very hard to hold information back." In order to create value from content that can be difficult to control, he said, "We think the answer is advertising." 

On the recent fuss over Google's relationship with the AP specifically, Schmidt said that because his company pays the news collective through a multimillion-dollar hosting and distribution deal, "I was a little confused by all the excitement in the news in the last 24 hours. I'm not quite sure what they were referring to." 

"There's always a tension around fair use," he said a moment later, referring to the legal concept that allows for limited reuse of proprietary content -- as Google News does by aggregating headlines.   "Ultimately fair use is a balance of interests in favor of the consumer."

"Think in terms of what your reader wants. These are ultimately consumer businesses. If you piss off enough of them you will not have any more, or if make them happy, you will grow them quickly."

-- David Sarno

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