Don't Blame Google for the Death of a Business Model
One of the most thoughtful analyses of what is happening to the traditional media industry I've read lately is Adam L. Penenberg's essay in MarketWatch in which he states: "What's the solution? There isn't one. We are in the midst of a paradigm shift. The big media companies with huge legacy costs pertaining to gathering, printing and distributing information either will adapt or die. That means getting a lot smaller -- and fast."
He also declares this truth flatly: "All this doesn't mean the death of journalism, it just means the end of a business model."
In that context, Google CEO Eric Schmidt's speech to the Newspaper Association of America (NAA) execs this week may not have broken any new ground, but it was notable that he didn't go for the rhetorical bait dangled before him by the likes of newspaper tycoon William Dean Singleton, current chair of the Associated Press.
Singleton is the posturer who threatened to take legal action against the search engines and news aggregtors who link to AP headlines and abstracts, but that dog don't hunt. Google, Yahoo, the HuffPost, et. al. send massive amounts to newspaper sites, and if the publishers don't want that free traffic, all they have to do is implement a simply piece of code blocking those links.
Schmidt knows this, though Singleton probably doesn't, so the Google executive focused on positive opportunities for cooperation in the future between media companies and the search giant. He encouraged a new wave of technology development, noting, for example, that mobile devices are the news platform of the future, so the time for innovation (and personalization of the news) is now.
He also urged the newspaper industry to experiment with more interactive ads, including e-commerce: "We think we can build a business -- again, with you guys -- with significant advertising resources, where the advertising is targeted to the content," he stated.
(BTW, my Bnet colleague Cathy Taylor is also covering Schmidt's speech today; please read her post here.)
And thanks to Brent Harrison for help on this post.