Did Google ever really want a newspaper? Did it want the New York Times? Well it doesn’t now and has told the FT that it is really not interested. Maybe it has worked out that, well, while it can make money out of newspapers they in themselves are worthless black holes.
There had been speculation that Google might buy something like the New York Times and turn it into a charitable trust, but according to CEO Eric Schmidt this idea is as dead, well, as some US newspapers. He also appeared to rule out buying the 19% stake in the paper that is owned by investment firm Harbinger Capital (who are clearly wishing they never bought it).
FT: Would you ever consider buying a newspaper; they’re cheap right now?
Eric Schmidt: We’ve actually looked at this and we’re trying to avoid crossing the line between the infrastructure and technology that Google provides and the content that our partners provide. There is a line and we’re trying to stay on our side it.
FT: And so the Harbinger Capital doesn’t hold any appeal for you?
ES: I don’t want to comment about a specific stake and ownership but, in general, we have done well by letting content people do content in their own terms and in their own way, and working with them to try to make some significant money for them.
In short Google wants to focus on the bit of the business that makes money. And you have to get the irony here. Google has risen to fame and fortune to a great extent on the endeavours of others.
It is one of the few firms that have made a lot of money out of content online. That is the truth.
Google is a something of a sneaky operator. Having made all of this money out of content it should in some way now contribute, give something back if you want, for all that it has taken. Maybe buying a newspaper is one way of doing it. I’m sure there are others.
But what does Schmidt have to say about this? Well, as the FT put it, he “played down industry calls for Google to increase the amount of revenue it shared with news organisations whose content appears on Google News”.
“We’ve decided that the value we provide to the partners is the traffic. So we want to provide incredible numbers of users going to their sites, their content, which is why we urge them to make it deeper, stronger and use better tools and so forth. From our perspective, that’s where the real source would be.”
He apparently said that to do this Google would have to take money from “another pocket” to do so. Would that be another really deep pocket? I’m guessing so.
What Google is doing is working with newspapers in some shape or form including The Washington Post.
“With a number of newspapers, and The Washington Post being an example, we are very interested in trying to develop online news versions that somehow address the immediate needs of people and for which advertising works better. Without commenting specifically about products it seems to me that the newspaper that I read online should remember what I read. It should allow me to go deeper into the stories. It’s that kind of a discussion that we’re having.
Schmidt is also clear that as far as paid content goes, it is not going to happen except in specialist and B2B cases, which appears to be the general consensus.
“I think it’s [paid content] unlikely to work although people will certainly try it and they’re welcome to do so. And the reason is that for most content people are preferring an advertising model. There will be some very specialised content, you know, high-quality newspaper articles, magazines, that sort of thing, which I suspect subscriptions will work for. But for the average news that everybody gets today they would prefer an advertising-supportive model.”