RESEARCH TRIANGLE PARK, N.C. – As newspaper chains such as McClatchy (owner of The News & Observer in Raleigh and The Charlotte Observer) wrestle with declining profits and rumors of layoffs, Google’s top executive is taking pity on them.
“It’s a huge moral imperative to help here,” Google CEO Eric Schmidt said at a conference Wednesday in San Francisco.
Who would have ever thought that the newspaper industry would have ever needed help from Google, let alone anyone else?
Let’s be quick to point out that TV and radio networks and stations face their own challenges in the rapidly changing media news and entertainment world. Ratings aren’t great overall, and like newspapers the networks are rushing to the Web in search of dollars. ("Why does my TV show me ads I couldn’t possibly be interested in?" he asked, Web news service Cnet said. It’s a waste of advertisers’ money, he added.)
Cnet, by the way, framed Schmidt’s remarks as applying to publishers, not just TV. Many Web publishers, including Cnet, haven’t hit advertising motherlodes on the Net, either. And Cnet is certainly one of the best online news generators.
However, Schmidt’s remarks were especially striking in terms of the newsprint world.
One, he is stating the obvious – newspapers are in big financial trouble.
Here’s The Associated Press key paragraphs: "Newspaper publishers also are boosting their online revenue, but so far those efforts haven’t been nearly enough to offset the decline in print advertising. Last year, for instance, the U.S. newspaper industry’s overall ad revenue fell by 8 percent to $45.4 billion, according to the Newspaper Association of America.
"Meanwhile, Google’s revenue last year rose 56 percent to $16.6 billion, widening the company’s lead as the Internet’s most profitable business."
Two, his company is one of the major reasons as people stream to the Web and away from print.
Three, the Web would be a lot leaner in terms of value without newspaper content.
After all, people want quality news no matter what means is used to deliver it.
Schmidt acknowledged that Internet services even as large and as profitable as Google rely on newspapers for quality content. And what’s Yahoo! without newspaper stories or links other than a Web farm for wire services which themselves rely heavily on their print partners and competitors?
"That’s bad for Google. We are critically dependent on high-quality content," he said in reference to people going to the Web while not paying for content.
Of course, Google’s “moral imperative” also includes the sale of DoubleClick Web advertising sales to newspapers. In other words, profits.
How can Google help?
"Publishers can use DoubleClick and monetize their Web sites better," Schmidt said.