Why Doesn't Google Notice that the Barn Is Burning?

Sharon Waxman has a post based on an interview with Google CEO Eric Schmidt. One comment she reports underscores how little the search company seems to understand about content, the dire straits of those who produce it, and just how tenuous Google's own fortunes -- and others who would make their money off the content of others -- might be.

No, they won't get involved with content companies, he said. But apparently Schmidt and his team have a Plan -- use the latest search technology to deliver high quality news to people that they weren't specifically looking for:

Under this latest iteration of advanced search, users will be automatically served the kind of news that interests them just by calling up Google's page. The latest algorithms apply ever more sophisticated filtering â€" based on search words, user choices, purchases, a whole host of cues â€" to determine what the reader is looking for without knowing they're looking for it.

There's just one problem. Neither paper gets a direct penny from the arrangement. Instead, Schmidt trusts to the power of driving traffic to their sites that will ultimately result in higher ad revenues for the papers.

What have they been smoking out in Mountain View?

Let's take this apart to see just how out of touch Google management seems to be. The friction they've been getting for years from publishers of all stripes -- newspaper, book, magazine -- is that Google has become like your Uncle Morrie, the schnorrer. In both Yiddish and German, the term refers to someone who constantly is looking for a freebie, and who feels entitled:

A man goes to a doctor for a serious problem. The doctor cures him and hands him a bill for $100. The man gasps, saying, "I can't afford that!"

The doctor, befuddled, says, "Alright, if you're having hard times, let's make it $50." The patient says, "What, you think I'm made of money?"

The doctor answers, "How about $20?" The man says, "I don't have a cent."

"I'll have you know I'm a big specialist in this area. I studied for many years, spent a lot of money, all to learn what I know!" says the doctor. The man says, "I know, and that's why I came here." "But why did you come to see me if you didn't have the money?" the doctor asks. The man says, "Doctor, for my health, nothing is too good!"

I find it next to impossible to believe that, in his most rational moments, Schmidt actually believes this. But, then again, Silicon Valley has long been a land where people talk themselves into the most ridiculous things, sure that their vision of how the world should work will eventually triumph. Sometimes it does. But oh, so often it doesn't.

If the New York Times and many other sources of the expensive work of reporting and gathering information go under, where is Google going to get its premium advertising rate for content that no longer exists? I know the standard Kool-Aid answer: an army of Netizens, using blogs and Twitter, will disseminate all the information you might need. Unfortunately, only a few are either trust fund babies or have already made their drop-dead money.

Most people, though, have to earn a living. For all the dilettantes out there, let's note that to really do reporting, to really write pieces with a lot of information from a range of sources and not just the people who attend the same business functions as you, takes time. A lot of time. Oh, it's easy to spout opinion -- to blogviate, as it were -- but to report is a whole different animal. A decent story can easily take 12 to 20 hours of work on the part of the reporter alone, not editors, designers, and fact checkers. For more complex stories, the time goes up rapidly.

If you're going to have reporting that digs through corporate filings and government reports and that digs up people who aren't spending much of their time trying to be professional sources as a form of self promotion, you need people to spend time and not just approach this as a pastime.

I'm sure this sounds like the usual journalistic wailing, but I'm talking about something different. Forget sympathy; let's focus on business reality. If you are in management in a high tech company, then you know what it's like when people complain about the cost of software or even hardware. They look at the very end product and ask why it has to be so expensive. They don't understand all the work necessary that eventually has to be paid for.

The same is true for content, only many firms have become the consumers that say everything should be free. That's nice, but it can't be, because content is the raw material. You can't expect on the kindness of strangers to provide electricity, raw materials, bandwidth, servers, and so on. Even if people started to do such things on the side, they'd get distracted and you couldn't expect regular delivery of what you needed.

Google is not totally dependent on Google News to drive ad views, but I'm guessing that it's a significant part of the pie. Clearly they know there's value in people getting the information they want. But how long will it be before news organizations, out of economic necessity, prevent aggregators from coming through content?

I agree wholeheartedly with the notion that there is a lot less value in many stories then the producers think. Often a headline either alone or with a single paragraph will suffice, suggesting that most people don't need to click through most stories. The value of much of the material disappears as soon as it appears in headline form. It's a simple result of people wanting fairly straight information for much of their reading and the divergent interests of people.

So what "premium" content will Google deliver? Headlines people didn't expect to look for? Is that really going to drive so many more readers to the sites of newspapers that they suddenly find themselves economically viable through nothing else but online operations? Please, don't make me mock.

Many online companies have been poisoning the communal content waters for years. I understand that they like high margins and the idea of finding ways to make money without investing in the creation that underlies it all. But as we've seen many times in the past, when a business is nothing but a distribution point, it is vulnerable. The attack may not come today or next week, but such companies really depend on being in the right place at the right time, and that time eventually passes. We've seen it with retailers, who depended on location to become the way for people to get non-perishable goods. We've even seen it with newspapers, which depended on the delivery mechanism of cheap paper for their success.

All the tech companies that are trying to model success on "free" content have left themselves wide open, because if that content is no longer available for whatever reason, they have nothing left to sell.

Burning newspaper image via Flickr user matt1125, CC 2.0.