All Posts Tagged With: "eric schmidt"

I’ve tried to make the case in the last couple of blog posts that it’s in Google’s interest to share ad revenues with news providers, by opening up Google News fully to advertising and offering a story-clickthrough-based rev-share program for participating publishers tracked by the service. Without throwing a good-sized financial bone at the news folks, putting more ads on Google News (there are very few currently) will create an uproar among news companies and give Google a black eye that will tarnish the company’s golden reputation.

I haven’t had the chance to meet or interview CEO Eric Schmidt (working on it), but seeing his public speeches I’ve generally had a good feeling about the guy. But after reading New York Times columnist Maureen Dowd’s column on interviewing Schmidt, “Dinosaur at the Gate,” I’m beginning to wonder if he’ll end up with a Bill Gates reputation. (That’s Gates the ruthless businessman before he turned to philanthropy.)

Writes Dowd:

“Why can’t Google, which likes to see itself as a ‘Don’t Be Evil’ benevolent force in society, just write us a big check for using our stories, so we can keep checks and balances alive and continue to provide the search engine with our stories? After all, Schmidt acknowledges that a lot of what’s on the Internet is ‘a sewer.’ He told me people don’t come to Google for ‘crap,’ but for what’s ‘useful.’

“He declines to pony up money, noting that newspapers could opt out of giving their content to Google free and adding, ‘We actually like making our own money for obviously good capitalist reasons.’

“He says: ‘The best way to get out of this is to invent a new product. That’s the way Google thinks. Incumbents very seldom invent the future.’”

Dowd didn’t ask the question the way I would have, but many of her commenters on that column got the point right. Wrote one Dowd reader:

“Google should somehow partner with the content providers not out of charity but because they won’t have anything worthwhile to search for in a few years if they don’t fork over some of their profits.”

And another…

“News, analysis, opinions, etc. need to be created on an ongoing basis. If as a consequence of Google not sharing any revenues with newspapers, the latter cannot operate any longer, then in essence Google would have slayed the goose that lay the proverbial golden egg.”

As I’ve said in my last two blog items, it’s in Google shareholders’ interest for the company to share its ad revenues with news providers. (And I don’t mean only newspapers and other big media companies; such a program as I’ve proposed would cover even the tiny new-media start-up news sites that Google News tracks and links to.) Schmidt’s unwillingness to come up with a mutually beneficial sharing strategy is just about to push the best journalism behind pay walls, a panicking-publisher movement that appears unstoppable. That’s not exactly in Google shareholders’ best interest.

So what’s the deal, Mr. Schmidt? Have you deleted Sergey Brin and Larry Page’s “Don’t Be Evil” mantra from the corporate mission statement? Because by not helping maintain a strong press (and this has NOTHING to do with saving newsPAPERS; it’s about saving quality journalism), you’re allowing a once strong watchdog press to lose its fangs.

This isn’t about charity to news companies that didn’t have the smarts to reinvent themselves for the digital media era. It’s about turning one of Google’s assets, Google News, into a profit center that also happens to serve a public good: financially supporting news organizations from big to small.

If Schmidt has his way, as expressed to Dowd, it’s not just dinosaur media like newspapers that will suffer. The news entities being formed today to replace newspapers will have less of a chance of making it, because there’s not enough advertising money to go around (and Google grabs so much of it now).

Schmidt told the Newspaper Association of America recently, “Let me just say precisely: It’s a sewer out there.” So I guess he’s willing to allow pissed-off and scared news executives to put the quality content of theirs that Google News tracks to go behind pay walls and the content universe that Google News tracks to get a bit smellier, rather than come up with a plan that prevents that and helps to reverse a journalism (NOT just a newspaper) crisis.

C’mon, Mr. Schmidt, do the right thing. Don’t be evil. It’s even in your best interest!

(Note: I have specifically suggested that a news-provider revenue-share program be limited to Google News, because it tracks a limited and select number of news providers. Sharing revenues on Google.com web searches that lead people to news sites is more troubling; it could mean that all manner of websites want their cut. Let’s not go there just now.)

I was disappointed in Google CEO Eric Schmidt’s keynote speech to the Newspaper Association of America today. (Audio here, courtesy of Bill Densmore. Transcript of Q&A portion of Schmidt’s session, thanks to Poynter.org.) Oh, it was a fine speech and Schmidt educated some of the backward-thinking publishers in the audience, no doubt, about what’s ahead.

But Schmidt has expressed his respect for newspapers and a desire to help them survive. Well, he’s not promoting newsPAPERS surviving, but rather their large newsrooms of reporters capable of well serving society’s need for watchdogs of the powerful. That’s a role that Google does not want to play. He thinks that newspapers should use the Internet to get 10 times their current audience online and with mobile (cutting back on print), and he thinks that advertising will (eventually) be their salvation.

I was hoping for more from Schmidt. With a few instructions to his managers, he could direct billions of dollars to content producers, including news organizations. I don’t get why he doesn’t do it.

Why should Daddy Googlebucks help those newspaper publishers who are too behind the times to understand how to survive in our new world? Well, first, I want Google to support quality news content, which may come from a newspaper company, a news-oriented start-up, or a quality blogger who produces news. So I’m not talking about Google saving just newspapers, but rather about the company financially supporting quality content and journalism.

Right now legacy news executives are panicking, especially newspapers. They’re discussing schemes to put news content behind walls, away from Google’s prying eyes, and despite many rational and convincing arguments as to why that is a DUMB idea except in special cases, the movement appears to be gaining speed. (As to why it’s dumb, I urge you to read this great piece by search guru (and ex-newspaperman) Danny Sullivan, “Google’s Love For Newspapers & How Little They Appreciate It,” and Steve Yelvington’s month-old advice, “Eight barriers to local paid content.”)

If news executives continue down this misguided path, this loss of quality content will not be good for Google (nor the public). Sure, if a bunch of newspapers led by dinosaur executives cut off their noses to spite their faces, new news entities will arise and journalism will live on after a short period of ugly transition where the watchdogs are few and the bad guys in government and business get away with more than usual. It can’t be in Google’s interest to let this happen, and the quality of the web content it thrives on wither, even if only for a year or two.

What can Google do? What order do I wish Schmidt would issue to the Google troops from his lofty office? Here are two possibilities:

1. Turn on ads for Google News, and share some of the pie
Google News already has started putting contextual ads on searches of Google News. (Example.) Why not go further and turn on ads for all of Google News? Click the sports news category and see Google ads in the right column. See them on the Google News homepage.

Of course, if Google did that now, the screams of “Google is making money from my content!” by the media dinosaurs would grow even louder. Some would remove themselves from Google’s reach. But Google could calm down those ancient media beasts by simply starting a program where any publisher that’s tracked by Google News could participate. It would count the number of clicks through to a story that any publisher gets, then at the end of the month distribute a pile of money based on popularity of the various news sources.

The money pool would be filled with the money that Google advertisers paid when users clicked on the ads while using Google News. Google would allot a percentage of the revenue to be split among the publishers.

Why would Google do such a thing? Because going whole-hog on ads on Google News would incense publishers; doing it in a limited way (just search queries, as is the case now) would get less resistance, but Google keeps all the money. I’d think that full-out Google News advertising and Google voluntarily paying out a slice of Google News ad-click revenues to news publishers would mollify the seething and panicking news executives, and probably leave more money in Google’s account. Perhaps some of those dumb proposals to lock down news content would become unnecessary with a healthy revenue stream from Google for quality news publishers. (I emphasize “quality” because this simple scheme would reward the most money to news sites that get the most clickthroughs from Google News.)

I don’t believe that the news industry should demand this. Calling out the lawyers to demand that Google share Google News ad revenues seems like the wrong approach. But Schmidt says he wants to help pay for quality news content and keep reporters working. Google could send waves of money to news producers who continue to give their content away for free online. (Ditto for blogs, if such a program were instituted on Google Blogsearch.)

Based on Schmidt’s words to the NAA today, he thinks that Google can just get more people to click through Google News headlines, in such large numbers that advertising revenue will support news organizations online. I doubt that, and suggest that Schmidt take one step further back and get news publishers money directly from participating in a Google News ad-share program.

How about it, Eric?

2. The perpetual Google pledge drive
This second idea could complement the first. … Not long ago I ran across and wrote about Silicon Valley start-up Kachingle, and I fell in love with the concept. It’s a simple voluntary subscription that you (the online user) pay $5 a month for (or whatever amount you decide), and then that money is divided up each month among websites that you LIKE and that you VISIT. Publishers become Kachingle participants for free and display a medallion, and when Kachinglers who like your site visit, you get some of their money based on how often they visited your site compared to other sites they’ve told Kachingle they like.

It’s a bit NPR-ish in that you voluntarily donate to all the websites and blogs you like; and if you are a cheapskate and want all your content online free, don’t pay but still see everything. Like the scheme above, Kachingle supports quality content sites; popular news sites presumably will get more money from their fans. And money flows automatically, month-after-month, with regular credit card deductions from Kachingle member accounts.

Google could easily support this on Google News, by indicating when its source news sites (and blogs) are Kachingle members, and encouraging GN users to support news and online content by becoming a Kachingle member.

Why would Google to this? Pretty much the answer is the same as for idea No. 1 above. By using the power of Google’s many millions of users to drive voluntary regular contributions to Kachingle, Google would be financially supporting news sites and bloggers who produce quality content. Again, this would be a move to prevent panicky publishers from taking their content away from Google News because they’d have yet another revenue source to support them.

Schmidt told the NAA earlier today:

“If you see a headline what I want you to do is I want you to think, ‘Oh that’s interesting, I want to know more,’ and then based on that I want you to click to the newspaper Web site or to Wikipedia or to wherever. If we can build products — and we have teams at Google working on this — to roughly work like that where there’s a one-liner that’s interesting and you click and go into layer after layer after layer of information — and by the way, not just text but also video and entertainment, and so forth and so on — that’s personalized, we think we can build a business — again, with you guys — with significant advertising resources, where the advertising is targeted to the content. To me that’s the only solution we’ve come up with to this problem.”

Well, that’s going to take a while. Meanwhile, major metro newspapers, some in existence for 150 years, have died, and more will die. The simple ideas above would allow Google to quickly address the media crisis in a meaningful way, AND it would benefit Google.

Mr. Schmidt, I don’t expect you or Google to single-handedly save journalism and the news industry. Yet you have the power to improve the situation significantly. And it’s in your own interest.

What are you waiting for?