Google CEO: Consumers Won't Pay for Most Online News

At NAA: Eric Schmidt Tells Publishers They'll Make Money From Ads, Micropayments, Regular Subscriptions

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SAN DIEGO ( -- The newspaper business and other publishers will end up using a combination of advertising, micropayments and regular subscriptions to support its content online, much the way cable TV already operates, Google CEO Eric Schmidt told newspaper executives today. "I think you're going to end up with all three," he said.

Eric Schmidt
Eric Schmidt Credit: Art Beaulieu
But despite some hope to the contrary, especially as ad support has dropped, people will still get most of their online news free, Mr. Schmidt said. "It's very difficult to hold information back."

Mr. Schmidt's remarks came in the closing session of this year's Newspaper Association of America convention, a modest affair in San Diego that attracted about 200 attendees. His talk also came amid growing agitation over the way the web allows others to collate or riff on the headlines produced by newspapers and other traditional media at great expense.

Freedom of expression
He returned frequently, however, to freedom of expression, which has both enabled newspapers to contribute so significantly to society and enabled the kind of innovation that's delivered the media business to such a chaotic crossroads. America is a great idea precisely because it is open to change, he said. He didn't say so explicitly, but the argument implies newspapers should stop painting Google so large in their troubles.

It's a topic Mr. Schmidt has had to tackle with other media sectors before. Last fall he flattered magazine executives by saying their brands were essential to navigating the web, which was fast becoming a "cesspool."

Apparently the web hasn't gotten any cleaner. "Let me just say precisely," Mr. Schmidt said today, "it's a sewer out there."

More recently, however, some news executives have accused Google search of contributing to the cesspool -- by often directing people to blogs and aggregators before original sources.

Pressed on that today, Mr. Schmidt said Google News already looks to certain trusted sources but argued that the general search function shouldn't be tilted toward Google's perspective. "For general search, we've been careful not to bias it on our assumptions of trust," he said.

Yesterday the Associated Press announced plans to track its news around the web, to threaten or pursue lawsuits against the sites it decides use its content improperly and to build search-friendly pages of "authoritative" news. Mr. Schmidt said today he didn't understand all the excitement that announcement caused, at least in the case of Google, which has a multimillion-dollar deal with the AP to distribute its content and to host it on Google servers.

Consumer behavior
When an audience member said Google News encourages people to consider a headline and lead sentence "good enough," discouraging them from clicking through to whole articles on newspapers' sites, Mr. Schmidt disagreed. Google News isn't that different from what you hear on the radio, he argued.

But if people are increasingly settling for headlines and blurbs summarizing most news stories, declining to click through to the original source, that's up to them, he said. Google doesn't want to condemn consumer behavior. "These are ultimately consumer businesses," he said, "and if you piss off enough of them, you ultimately won't have any."

From newspapers' perspective, in a wired world based on ubiquity of information instead of scarcity, the trick is making their content more attractive. "If you see a headline, what I want you to do is think, 'Oh, that's interesting,'" Mr. Schmidt said. "'I want to see more.'"

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