Wednesday, January 07, 2009

Eric Schmidt: Google Wants to Help Newspapers

Fortune Magazine's Adam Lashinsky has an interesting interview with Google CEO Eric Schmidt in which they discuss the future of the newspaper industry. The bottom line? Google would love to help, Schmidt wants newspapers to succeed, they just don't know how to do it. It happens that Dan Froomkin has some good ideas.

I agree entirely with Schmidt on this:

They don't have a problem of demand for their product, the news. People love the news. They love reading, discussing it, adding to it, annotating it. The Internet has made the news more accessible. There's a problem with advertising, classifieds and the cost itself of a newspaper: physical printing, delivery and so on. And so the business model gets squeezed.
Yes, that's exactly the point. People WANT information. They demand it. It's a strange industry in which demand is high, supply is strong, but it still can't figure out how to sustain itself.

For years the industry has been giving us the news for free while feeding us ads. Even when we subscribed to physical newspapers we never paid full value for the news. Those pages upon pages of classified ads, as well as the display ads paid for by the likes of Macy's, Filene's and Jordan Marsh managed to keep our news fully subsidized.

Those days are gone. The business model just doesn't work. We need something else.

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