Google CEO Takes On Newspaper Conference

The search engine is criticized for not sharing profits

Over recent months, the search engine giant Google has come under increased attacks from news agencies and newspapers, which wonder if the company's news aggregator is not a breach of copyright, and if the company has the right to take all of its materials and index them in its engine. They are also pondering the possibility of making Google pay for using their content, or at least have the search engine pay them a cut of the millions of dollars it makes in profit from inserting news into an aggregator. In turn, Google CEO Eric Schmidt has replied harshly, at the Newspaper Association of America's (NAA) annual conference, held in San Diego.

“I would encourage everybody to think in terms of what your reader wants. These are ultimately consumer businesses and if you piss off enough of them, you will not have any more. There wasn't an act after that. You guys did a superb job, and the act after that is a harder question,” Schmidt said at the conference, referring to the fact that newspapers did a good job when they first entered the online space. Afterwards, Google's CEO added, the companies that owned the newspapers lost initiative, allowing news aggregators to go live and to pick up the pieces in order to fill in the demand.

The entire conflict was triggered by the fact that an ever-increasing number of newspapers is losing its client base, as well as its financial means of survival, and risks going bankrupt. Some larger ones already did, while others are resorting to measures such as selling luxury headquarters or employing ads on their front page, just to stay afloat. Schmidt also explained that newspapers should move to the online environment, on account of the fact that the Internet had become the second largest source of information for the average individual, following TV, and before newspapers.

“From our perspective, there is always a tension around fair use and fair use is a balance of interest in favor of the consumer,” Schmidt answered a reporter when asked if he didn't feel that the Internet was attacking the intellectual property rights that newspapers had on their content.

“The real question is is it fair for news companies to produce all this content for Google and for Google to keep the lion's share of revenue. What we should be focusing on is 'fair share.' Google is a wonderful company and has done wonderful things as an aggregator and search and built a model on the fly that means whoever gets the last click gets all the benefit. It's time to reboot the system,” Ken Doctor, an industry analyst for Outsell, told the BBC.

“We drive traffic and provide advertising in support of all business models – whether news sources choose to host the articles with us or on their own websites. Users like me are sent from different Google sites to newspaper websites at a rate of more than a billion clicks per month,” the Associate General Counsel for products and intellectual property at Google, Alexander Macgillvray, replied.

“There is a collective consciousness among content creators that they are bearing the costs and that others are reaping some of the revenues. There is no doubt that certain websites are best described as parasites or tech tapeworms in the intestines of the Internet,” Wall Street Journal Managing Editor Robert Thomson lashed out. He was in tone with magnate Rupert Murdoch, who said that, “Should we be allowing Google to steal our copyrights? If you have a brand like the New York Times or the Wall Street Journal, you don't have to.”

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