Google CEO says not to blame for news industry woes

Thu Dec 3, 2009 9:57am EST

Related Topics

* News search ads a "tiny fraction" of Google revenue

* Publishers need to provide free and paid access to news

NEW YORK Dec 3 (Reuters) - Google Inc (GOOG.O) is not to blame for the news industry's problems but is committed to playing a role in helping struggling publishers survive the transition to the online age, CEO Eric Schmidt said.

Publishers need to explore new ways to make money from news on the Web, including the traditional advertising-based model as well as subscription-based access to content, Schmidt wrote in an opinion piece in the Wall Street Journal.

"With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame," he wrote in the article published on Thursday.

"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," he said. "The facts, I believe, suggest otherwise."

Revenue from ads that appear alongside news articles on Google's search engine represent a "tiny fraction" of the company's overall revenue, Schmidt said.

Developing new technology that makes it easier to reach readers and keeps readers engaged longer will be important for publishers, he said.

Google is the world's largest search engine with roughly $22 billion in annual revenue.

Schmidt's comments come as news publishers adopt an increasingly antagonistic tone towards Google and other search engines.

Last month, News Corp (NWSA.O) chief Rupert Murdoch threatened to block Google's search engine from accessing his newspapers' content on the Web.

Earlier this week, Google announced a change to its technology that would allow publishers that charge subscription fees for online editions, such as News Corp's Wall Street Journal, to limit the number of times Web surfers can access free versions of articles via Google searches.

Individual news articles accessed through Google can often be read for free, even if the newspapers' actual website charges a subscription fee.

"We also acknowledge that it has been difficult for newspapers to make money from their online content," Schimdt wrote. "But just as there is no single cause of the industry's current problems, there is no single solution." (Reporting by Alexei Oreskovic; Editing by Ted Kerr) ((alexei.oreskovic@thomsonreuters.com; +1 415 677 2511; alexei.oreskovic.reuters.com@reuters.net))

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.