So Google’s not buying a newspaper.
In an interview with the Financial Times, CEO Eric Schmidt said he had looked at the possibility, but ultimately decided that Google is a technology company that doesn’t want to be in the business of producing content.
“There is a line and we’re trying to stay on our side of it,” Schmidt said.
No, Google’s business is not producing content, but organizing and monetizing other people’s content. Trouble with newspapers — the monetization has been falling behind, and it’s dragging the content with it.
“From our perspective, we depend on the production of very, very high quality content,” Schmidt said. “If the people who are producing that are getting laid off, it’s really a tragedy for both.”
But Schmidt and others from Google have been meeting with newspaper executives to discuss partnerships, of some sort.
“With a number of newspapers, and the Washington Post being an example, we are very interested in trying to develop online news versions that somehow address the immediate needs of people and for which advertising works better,” Schmidt said. “Without commenting specifically about products, it seems to me that the newspaper I read online should remember what I read. It should allow me to deeper into the stories. It’s that kind of discussion that we’re having.”
Still advertising based, eh? But what about charging those free-riding readers, say through micropayments or subscriptions? Probably not going to work, except for highly specialized news — in-depth newspaper pieces or magazine features, Schmidt said.
And trying to rewrite fair use law or newspapers trying to grab a bigger piece of the revenue pie from aggregators like Google News? Nope. The well-established fair-use doctrine has spread into so many corners of the economy that trying to reargue its basis now is beyond hopeless. And asking Google for more money isn’t going to work, because Google doesn’t really monetize its news section.
“We’ve decided that the value we provide to the partners is the traffic,” Schmidt said.
So the search continues for that killer ad product for newspapers. If Schmidt and his team at Google can find it, we’ll all be better off for it. But looking at their continuing frustrations with making money from YouTube, and the abortive experiments in serving ads on old-line media like radio, one might be forgiven for a holding onto a bit of skepticism.