

Eric Schmidt: How Google Can Help Newspapers  - ilamont
http://online.wsj.com/article/SB10001424052748704107104574569570797550520.html

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raheemm
People are willing to pay for indepth reporting - this type of content can be
sustained by subscriptions. People are not willing to pay for newsbites or
breaking news, since this type of content is widely available for free - this
kind of content can be sustained by advertising. But can these two models
combined match the pre-internet revenues newspapers are used to? Probably not
because of the cost models of pre-internet news gathering and also because of
the choices advertisers now have.

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jedc
The problem with the industry is that the world is shifting to new (lower)
revenue models but most newspapers/publishers are still living with old (HUGE)
cost models.

I'm still waiting for the first big media company to make a truly radical
shift in their cost structure... only then can they survive. (IMHO)

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ippisl
Schmidt contradicts himself : He tells us that newspapers can get good money
using targeted ads , and then he tells us that google(which is the leader in
ad targeting) get very little revenue from ads next to newspapers stories.

So ads might not be the solution for the current problems of newspapers.

But if you look at google news , every story gets published in hundred of
newspapers with some little variation. Seems like a huge redundancy , that
takes a lot of work , and shares the ad revenue between many many sources.

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Xichekolas
> _every story gets published in hundred of newspapers with some little
> variation. Seems like a huge redundancy, that takes a lot of work, and
> shares the ad revenue between many many sources_

Exactly. The newspaper industry as a distribution model, with many players
redistributing content created by a few, and sharing the revenue, just won't
make sense when distribution online is effectively free... both in terms of
cost and expectation of cost.

However, the content creation industry will thrive. Non-syndicated,
subscription services like the Economist will do just fine.

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anonymousDan
I think what annoys murdoch et al. is that they are dealing with a commercial
entity (Google) over which they have very little leverage, if any. This puts
them in a very weak negotiating position. However, I read an article recently
speculating on whether it might be in their interest to foster competition
between search engines for their content, and in particular between Bing and
Google. To do this, the article suggested they ban Google from indexing their
content, and get Microsoft to pay them for the privilege.
[http://www.economist.com/businessfinance/displaystory.cfm?st...](http://www.economist.com/businessfinance/displaystory.cfm?story_id=14955213)
The open question with this strategy is whether they could make enough money
from Microsoft to offset the loss of click through revenue from Google.
Moreover, it is unclear whether they could get sufficient scale to hurt Google
in terms of the number of news organisations that participate.

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biznerd
_The claim that we're making big profits on the back of newspapers also
misrepresents the reality. In search, we make our money primarily from
advertisements for products. Someone types in digital camera and gets ads for
digital cameras. A typical news search for Afghanistan, say may generate few
if any ads. The revenue generated from the ads shown alongside news search
queries is a tiny fraction of our search revenue._

This argument is disingenuous.

Sure, the big G doesn't make any money off of news searches. But the triple-A
content provided by newspapers are what makes Google so useful in the first
place.

Google is then able to monetize its relationship with users when they do
highly profitable product searches. It's like people going to the gas station
and picking up a candy bar from the convenience store (where all the money is
made.)

~~~
apowell
_The revenue generated from the ads shown alongside news search queries is a
tiny fraction of our search revenue._

Translation: We make so much money that the piddling revenue your entire
industry generates means nothing to us.

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ilamont
I think that Google and publishers are placing far too much hope in targeted
advertising. The reason: As Rupert Murdoch has pointed out in the past, there
is a nearly infinite supply of advertising inventory thanks to the explosion
of online outlets and social networks. How many billions or trillions of page
views are served every day by media sites, YouTube, Facebook, etc? Even if ads
were perfectly matched to the people who were reading them in terms of
demographics and relevance to their buying interests, the problem would not go
away -- there are still billions or trillions of pages being served, albeit
with fewer wasted impressions. In this kind of environment, prices have to
stay low.

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dtf
Interesting that comment about atomicity of consumption. A similar thing
happened to the music industry, who relied for so long on the ability to shift
a lacklustre album on the back of a popular single. There were loud complaints
from up high when consumers got the power to cherry-pick the good tracks and
leave the dross on the shelf. I'll spend £2 on a Sunday paper and read less
than 5% of it. Is that a good thing, to waste that much paper, that much
labour on filler articles just to make a profitable package? If they attempt
that same tactic on the internet once the paywalls go up, I can't see it
working.

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unwind
Also here:
<[http://news.ycombinator.com/item?id=974342>](http://news.ycombinator.com/item?id=974342>).

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sanj
Why is he listed as "Mr. Schmidt" rather than "Dr. Schmidt"?

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ilamont
He's not a _real_ doctor. :)

Seriously, though ... The WSJ probably has a style guide which tries to avoid
honorifics and degree references. It is hard to track and verify, and is
inconsistently used among recipients.

BTW, a problem which I think requires a solution is a degree verification
marketplace -- not just for employers and reporters to check someone's
credentials, but also for people who may need to get some sort of confirmation
on their own for whatever purpose. My wife had to do that for a vocational
school which wanted to make sure an earlier degree from a foreign college was
legit, It involved mailing or faxing a copy of her transcript to some service
which sends back a letter saying it's real -- and costs $75. Inefficient,
labor-intensive prone to abuse, and way too expensive -- prime candidate for a
software solution, IMHO.

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clistctrl
A bit off topic, but there's a second problem to be revealed from this. It
seems like google is trying to provide more, and better quality content to
consumers. I feel as a consumer of information, its an addiction. Once I start
reading I find hours have passed. There's a loop of finding something
interesting, and thought provoking. Often questions arise, as I research the
answer to those question more arise. Then i'll click another link and the loop
continues. This is a problem I've thought quite a bit about solving. The
solution always seems to be gain more will power. But I find it really
difficult.

