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Google CEO offers advice to newspaper industry

(Agencies)
Updated: 2009-04-08 14:04

WASHINGTON – Google chief executive Eric Schmidt told worried US newspaper owners on Tuesday they need to work with the Web giant as they struggle to find a new business model for the ailing industry.

Google chief executive Eric Schmidt, pictured in 2008, told worried US newspaper owners on Tuesday they need to work with the Web giant as they struggle to find a new business model for the ailing industry. [Agencies]

Speaking to a meeting of the Newspaper Association of America in San Diego, California, Schmidt praised the role the press plays in a democratic society and stressed that newspapers should see Google as a partner not a rival.

Schmidt said Google, which has been criticised by some US newspaper owners for linking to their websites without sharing advertising revenue, focuses on the user experience and newspapers need to do the same.

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"If I were involved in the digital part of a newspaper I would first and foremost try to understand what my reader wants," the Google CEO said.

"These are ultimately consumer businesses and if you piss off enough of them you will not have any more," he said. "If you make them happy you will grow them quickly. We try really hard to think that way."

Schmidt said newspapers need to improve their websites. "I think the sites are slow. They literally are not fast," he said. "They're actually slower than reading the paper."

Schmidt addressed the newspaper executives a day after the US news agency the Associated Press announced plans to take legal action against websites that publish stories from the AP or its member newspapers without permission.

The AP did not mention any particular websites in its copyright initiative but some newspaper executives have singled out Google News, Google's popular news aggregation site, for criticism in the past.

"We can no longer stand by and watch others walk off with our work under misguided legal theories," said Dean Singleton, the chairman of the AP, a cooperative owned by more than 1,400 US newspapers.

"With respect to the Associated Press, we at Google have a multi-million dollar deal with the Associated Press not only to distribute their content but also to host it at our servers," Schmidt said.

"So I was a little confused by all of the excitement in the news in the last 24 hours," he said. "We have a very, very successful deal with the AP and hopefully that will continue for many, many years."

Agence France-Presse also has a licensing deal with Google.

Schmidt expressed optimism about the future of the media despite the closure of two major newspapers recently and the bankruptcy of others, but made it clear he does not expect most readers today to pay for news online.

Although micropayment systems were improving, Schmidt said, "the reality is that in this new model the vast majority of people will only deal with the free model."

"You'll be forced, whether you like it or not, to have a significant advertising component as well as a micropayment and a traditional payment system," he said.

"What we have to do is find models that involve very broad distribution and that make money all along the way," Schmidt said. "We, of course, are in the advertising business and we think that money will be there.

"We think that is the ultimate outcome for how all of this will play out," he said. "We have to embrace what users want together and by doing that I think we can win big."