“‘I think Schmidt understands this.’ That sounds like you think he *wants* newspapers to go out of business to speed the transition.”

Honestly, I have no clue what Schmidt wants, but I also don’t think it matters – his obligations as CEO aren’t a matter of personal preference. What I said really is what I meant – I’d assume he recognizes this shakeout is both epic and unavoidable, and that any maneuvering by Google would have almost no effect in the best case, while at the same time opening them up to a weak bargaining position, damaging public opinion or both.

I appreciate your concern about the democratic function of journalism – I share it, truly, that is why I am starting up jseed.org. I just think you are underestimating the scope of what is happening and overestimating any impact Google might have.

As for shakeout, Google is powerful enough and could affect situation enough that we have either a painful shakeout with a period of weak press and lesser watchdog journalism as old news institutions continue to fail while new ones struggle to find enough revenue to grow, or a smoother one where old media companies hang on longer and make transition to digital *at the same time* as new news entities form and mature with more revenue available to succeed. I agree, shakeout will happen, because some old media companies are incapable of transforming. It’ll happen whether Google helps of not.

“I think Schmidt understands this.” That sounds like you think he *wants* newspapers to go out of business to speed the transition. I seriously doubt that, and that’s not what he has said publicly. He’s said he’s worried about a deteriorating news media, deteriorating reporting, and lesser watchdog role played by a weakened press.

If he understands news at all (that’s not clear), he would utilize Google’s power to fund ANY quality news provider, which would include 150-year-old newspapers all way up to 1-month-old digital-only news start-ups. And he’d make that decision based on his self-interest, so that Google News could be turned into a strong revenue source for the company while at the same time serving the public good.

I’m not asking Schmidt to make a charitable decision to “bail out” old media. I’m asking him to turn on a new revenue spigot (Google News) that’s sitting mostly dormant, when the spigot can only be turned on full by sharing revenue with news providers that are tracked by Google News. Obviously, Schmidt can’t turn on the ad-money spigot without cutting news providers in the deal, because of the “PR problem” you describe and a likely revolt by media companies.

“Why not turn on the ad spigot now?”

I’d say there are two reasons: Google is teetering on a serious public relations problem here. Generating even more revenue around news content – revenue Google doesn’t need – might fan the flames if bickering ensued around how to split that new revenue. Following on from that, if their public image takes more of a beating, they might feel forced to act in ways against their better judgement (see below).

“Schmidt himself has bemoaned the state of journalism and the decline of the watchdog press; he’s personally worried about it.”

Yes, the state of journalism, not the state of the enterprises currently stewarding journalism. This is a shakeout – it’s painful, it’s ugly, and it will take some time. And we might see some temporary ebb in important journalistic functions, though I would suggest these functions were already largely offline given the last eight years. Google could add cash to the current scenario – maybe that would defer the pain a bit – but the shakeout still needs to happen. I think Schmidt understands this.

As long as they don’t suddenly just get a check in the mail some day for a program they didn’t sign onto.