Google CEO takes a slap at newspapers
The Newspaper Association of America got an earful from Google (GOOG) CEO Eric Schmidt. Newspaper executives got to sit and listen to a man whose company is making the extraordinary kind of money that they did a decade ago, in the age before broadband. Now consumers can turn to Google News and get much of what the newspapers used to deliver to their subscribers, and there is very little they can do about it.
There has been talk among newspaper managements that it may be a good idea to take legal action against Google for using their headlines in its Google News service. But these headlines point to newspaper websites, giving them tons of free traffic. The publishers can't afford to lose those eyeballs.
According toThe Wall Street Journal, "Mr. Schmidt compared the digital future of the publishing industry to that of the TV business, where broadcast networks draw the largest audience with an ad-supported model, and cable networks attract more niche audiences with subscription-based models and a combination of the two."
The Google CEO's suggestion might be right, but it comes too late for all but a few newspapers. A property like The Boston Globe, which is forecasting an $85 million loss this year, does not have the resources or personnel to overhaul its internet strategy anytime this year. With the number of people it plans to fire, it may never have the capacity to make significant changes to its online offerings. The same problem faces most large city dailies.
Schmidt knows that he was giving advice to a dying industry. It is a wonder he showed up to give his speech at all.
Douglas A. McIntyre is an editor at 24/7 Wall St.