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How Google can help newspapers: Eric Schmidt
By siliconindia
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Friday, 04 December 2009, 19:54 IST
Bangalore: "It's the year 2015. The compact device in my hand delivers me the world, one news story at a time. I flip through my favorite papers and magazines, the images as crisp as in print, without a maddening wait for each page to load.
Even better, the device knows who I am, what I like, and what I have already read. So while I get all the news and comment, I also see stories tailored for my interests. I zip through a health story in The Wall Street Journal and a piece about Iraq from Egypt's Al Gomhuria, translated automatically from Arabic to English. I tap my finger on the screen, telling the computer brains underneath it got this suggestion right.
Some of these stories are part of a monthly subscription package. Some, where the free preview sucks me in, cost a few pennies billed to my account. Others are available at no charge, paid for by advertising. But these ads are not static pitches for products I'd never use. Like the news I am reading, the ads are tailored just for me. Advertisers are willing to shell out a lot of money for this targeting.
This is a long way from where we are today. The current technology, in this case the distinguished newspaper you are now reading - may be relatively old, but it is a model of simplicity and speed compared with the online news experience today. I can flip through pages much faster in the physical edition of the Journal than I can on the Web. And every time I return to a site, I am treated as a stranger.
So when I think about the current crisis in the print industry, this is where I begin - a traditional technology struggling to adapt to a new, disruptive world. It is a familiar story: It was the arrival of radio and television that started the decline of newspaper circulation. Afternoon newspapers were the first casualties. Then the advent of 24-hour news transformed what was in the morning papers literally into old news," writes Google CEO, Eric Schmidt in the Wall Street Journal.
A lot has been said and written about the need to charge for online content. After a sustained campaign of verbal assaults and thinly veiled threats spearheaded by News Corporation Head, Rupert Murdoch, the search engine giant Google has offered an olive branch to the newspaper industry.
According to Schmidt, it was the arrival of radio and television that started the decline of newspaper circulation. Afternoon newspapers were the first casualties. Then the advent of 24-hour news transformed what was in the morning papers literally into old news.
Now the Internet has broken down the entire news package with articles read individually, reached from a blog or search engine, and abandoned if there is no good reason to hang around once the story is finished. "It's what we have come to call internally the atomic unit of consumption. Painful as this is to newspapers and magazines, the pressure on their ad revenue from the Internet is causing even greater damage. The choice facing advertisers targeting consumers in San Francisco was once between an ad in the Chronicle or Examiner. Now search engines like Google connect advertisers directly with consumers looking for what they sell," says Schmidt. "With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame. Much of their anger is currently directed at Google, whom many executives view as getting all the benefit from the business relationship without giving much in return. The facts, I believe, suggest otherwise."
Google sends online news publishers a billion clicks a month from Google News and more than three billion extra visits from its other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenue-for free. In terms of copyright, another bone of contention, Google only shows a headline and a couple of lines from each story. If readers want to read on, they have to click through to the newspaper's Web site.
"We want to work with publishers to help them build bigger audiences, better engage readers, and make more money. Meeting that challenge will mean using technology to develop new ways to reach readers and keep them engaged for longer, as well as new ways to raise revenue combining free and paid access," says Schmidt.
Google is already testing, with more than three dozen major partners from the news industry, a service called 'Google Fast Flip.' Schmidt says, "The theory, which seems to work in practice, is that if we make it easier to read articles, people will read more of them. Our news partners will receive the majority of the revenue generated by the display ads shown beside stories. Nor is there a choice, as some newspapers seem to think, between charging for access to their online content or keeping links to their articles in Google News and Google Search. They can do both.
This is a start. But the acceleration in mobile phone sophistication and ownership offers tremendous potential. As more of these phones become connected to the Internet, they are becoming reading devices, delivering stories, business reviews and ads. These phones know where you are and can provide geographically relevant information. There will be more news, more comment, more opportunities for debate in the future, not less."
