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Eric Schmidt on Google's New Plan for the News
The upper crust of Hollywood swirled about the vestibule and dining room of Arianna Huffington’s Brentwood mansion on Friday night at a party for author Kathy Freston, and to kick off this weekend’s L.A. Times Book Festival. (More on this later.)
DreamWorks’ Jeffrey Katzenberg was there in his trademark cashmere V-neck; Fox mogul Jim Gianopulos strolled down the block from his own house to check out the action; Universal’s Ron Meyer showed up with an entourage of women (including his wife Kelly); and ex-Viacom chief Tom Freston – husband of the feted author of a new diet and health book – rubbed elbows with UTA’s Jim Berkus and a smiling WMA (soon-to-be WME) chairman Jim Wiatt. A single suicide bomber would have ended filmed entertainment for the rest of the decade.
But the most popular guy in the room was most probably Eric Schmidt, the PhD, chairman of the board and CEO of Google, as un-Hollywood as they come, wearing a suit and round, rimless glasses. He’s also the man who rules my personal universe since the founding of TheWrap.
I seized the opportunity to ask him about his role in building the future of the news.
The crumbling world of newspapers is looking to Schmidt in the hopes of convincing him to save the New York Times by buying it, or the Washington Post, before they sink into insolvency. Google has helped destabilize the world of printed information, goes the argument, it should now step in to save it.
Schmidt is distinctly aware of the newsprint meltdown going on in an information world dominated by his company, and that this system only works as long as there is someone to report the news that his system delivers to readers.
I asked if the rumors I’d heard, that Google was changing its mind about getting involved with creating original content, were true.
No, he responded, quite convincingly, they’re not. Google is not a content company, and is not going in that direction, he explained.
But Google does have plans for a solution. In about six months, the company will roll out a system that will bring high-quality news content to users without them actively looking for it.
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 – based on search words, user choices, purchases, a whole host of cues – to determine what the reader is looking for without knowing they’re looking for it.
And on this basis, Google believes it will be able to sell premium ads against premium content.
The first two news organizations to get this treatment, Schmidt said, will be the New York Times and the Washington Post.
Does the New York Times make more money from this arrangement, I asked? No, Schmidt confirmed, it won’t. But by targeting the stories that readers will want to read, it will get more hits out of the stories it has, which will drive its traffic and ultimately support higher advertising rates beside the stories.
I salute this attempt to improve the digital revenue stream for newspapers but confess that this does not seem likely to offset the fundamental imbalance between the costs incurred by the Times and the Post in gathering the news versus the revenue they are able to make in online advertising. Online advertising would have to inflate in value by something like 10 times current rates to support a large, profitable news operation.
Why doesn’t Google share the premium ad revenue against this premium content?
Personally, I think the way of the future is more in the direction of what we are trying at TheWrap: small, nimble, cost-conscious news operations oriented toward a single subject area.
I think we will see a lot of these types of organizations popping up in the next year or two; all that lost talent needs somewhere to go.
Schmidt agreed that this made sense, but observed: “Journalists say they’ll do it, but most of them don’t do it.”
He’s right about that. I’ve been approached by many colleagues and peers who say they would like to try their hand at creating a news organization. In almost every case, those inquires have melted away into something less risky -- and less ambitious.
But I believe we ultimately have very little to lose by trying something daring. This is an historic period of change that we will not see again in our lifetime. It us a time of rare opportunity. Arianna Huffington, who hosted last night’s event, is there to prove the point by her success.
To my fellow journalists who find the notion daunting, I can only say: Take a single step, followed by another. I predict you will be surprised by how far you can get with that method.
As for the L.A. Times Festival of Books (which no longer has a separate book review section, sigh), we will be talking about this at a panel on Sunday at 2, where I hope you will stop by. The topic is, “Media: Where Do We Go From Here?” My fellow panelists will be Arianna, Marc Cooper and Andrew Donohue; the L.A. Times’ Jim Rainey will moderate.
I’ll also be speaking about the book as journalism at a panel at noon, together with John Powers, Dan Baum and moderator Elizabeth Taylor.
Hope to see you there.
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I don't think anyone has a clear idea of what's going to happen, but you're right about the fact that journalists aren't doing anything about it. That's only delaying printed media's death. They appear to be holding out with the hope that somebody or something comes along and saves them, ala, the automobile industry.
Fact is, printed media needs to die so that it can be reborn, so the business model adjusts into something that works.
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Some have served their entire adult lives--30-35 years--at one newspaper. Seems like the wrong people are ashamed.
Liseli Sikiş Says
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 – based on search words, user choices, purchases, a whole host of cues – to determine what the reader is looking for without knowing they’re looking for it.
John Says
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GL Says
The "new" google news layout is extremely annoying. All fancier now with prettier pastel colors but still no options for the user to control the layout. Socialism - one fit for all. The site takes 10 times longer to load, nags users with "would you like to set your homepage to google news", wastes screen real-estate with more annoying 'columns' etc. Google is the worst at providing options to users and the worst when it comes to understanding UI layout and human factors and they are the worst at NOT leaving things alone for awhile. Every nine months a google product UI "changes" somewhere or another. We're talking about the same company that for 10 years still only allows at most 20 results per page for google image search. Google products used to load quickly and used to be clean/minimal. Now it's all fancy-a$$ nonsense with no opt-out of all the annoying ui "inventions".
SEOMike Says
This is a major move. The AP has been complaining about not getting compensated for their news being displayed on some websites. If they are going to complain like that, there needs to be a new company to step up. Our current news model is archaic and dieing. If Google succeeds in taking over the market it will usher in a new era of reporting. Pretty soon Google will be paying reporters. Google will pay handsomely to keep other competition, like the AP, from breaking stories. You all know Google. They don't mess around. When they want to dominate something, they do. We're seeing the start of a paradigm shift and it's about time.
Peter Tobia Says
Ben Franklin said: "Anger will blow out the lamp of the soul." Disrespect and arrogance need to be left behind.
Newspapers across the country need to get together and decide they will all charge for content. Once that is established they, or a representative group, should get together with Google and each should work with the other to assure that a strong press equals a strong democracy. Gathering information accurately, intelligently and balanced cost money. We have seen what greed can do to peoples lives and I think most will agree greed should be replaced with collaboration helping both newspapers and digital media in the long run or in the transition.
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hint to the author: check out the What's Popular iGoogle widget...
Could THIS be the founding block of what Eric is describing?
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mediawiseguy Says
Mr Schmidt does not have the answer. He is about repurposing content, not creating any of it. The Huff is the same, an unimaginative socialite, with no moral fiber, who will turn writers into her serfs and the public into her subjects.
Schmidt's outlook is at least benign. But his"search" algorythms have their inherent bias. They promote hits over substance, and sleaze over journalism. He also condones the assassination of high profile people on his search engine.
The answer is NOT narrow ,single subject texts. It is high quality, tough stories that are created by journalists with backbone. Where is IF Stone when we need him. Does Schmidt know Izzy or AJ or ,even, Jack Anderson?
Jon Johnston Says
Some nasty comments for a fairly serious subject. That's unfortunate.
I don't think anyone has a clear idea of what's going to happen, but you're right about the fact that journalists aren't doing anything about it. That's only delaying printed media's death. They appear to be holding out with the hope that somebody or something comes along and saves them, ala, the automobile industry.
Fact is, printed media needs to die so that it can be reborn, so the business model adjusts into something that works.
Jon Johnston Says
Some nasty comments for a fairly serious subject. That's unfortunate.
I don't think anyone has a clear idea of what's going to happen, but you're right about the fact that journalists aren't doing anything about it. That's only delaying printed media's death. They appear to be holding out with the hope that somebody or something comes along and saves them, ala, the automobile industry.
Fact is, printed media needs to die so that it can be reborn, so the business model adjusts into something that works.
Jon Johnston Says
Some nasty comments for a fairly serious subject. That's unfortunate.
I don't think anyone has a clear idea of what's going to happen, but you're right about the fact that journalists aren't doing anything about it. That's only delaying printed media's death. They appear to be holding out with the hope that somebody or something comes along and saves them, ala, the automobile industry.
Fact is, printed media needs to die so that it can be reborn, so the business model adjusts into something that works.
Jon Johnston Says
Some nasty comments for a fairly serious subject. That's unfortunate.
I don't think anyone has a clear idea of what's going to happen, but you're right about the fact that journalists aren't doing anything about it. That's only delaying printed media's death. They appear to be holding out with the hope that somebody or something comes along and saves them, ala, the automobile industry.
Fact is, printed media needs to die so that it can be reborn, so the business model adjusts into something that works.
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Marty Pickle: Newspapers are those things that you don't read, which is why you're an ignorant asshat.
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What are newspapers?
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You know why my site is so "successful?" Because I pay the people who write for it nothing - nothing! And check out other ways I'm branching out to make my site more "successful." Just about every day now, we feature a scantily clad D-list model or a C-list Hollywood celeb making an asshat of themselves. The clicks go skyrocketing dahling!
Oh, and the beauty of it all is that I get to claim my site is "serious" news, because we pirate stories from all the big papers, slap a new lead on them and one of our gratis-faux "journalist's" mugshots and try to call it our own original content.
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John Says
Google - the great American thieves of the work of real journalists.
kristin Says
I find Google News annoying because less- than- credible sourced materials mix with the LATimes and other best sources. Now it appears they will target me with only certain headlines (?) based on my surf habits. That's scary. If Google becomes the only gateway after print persishes, Eric Schmidt will our omnipotent big brother. Time for a boycott, fellow lovers of the fourth estate?
Oops, first I have to find a new email, delete my Google Earth and...
And one other thing--why don't news orgs put names on those laid off so the public who are loyal fans at least know? Some have served their entire adult lives--30-35 years--at one newspaper. Seems like the wrong people are ashamed.
Sharon Waxman Says
enlighten us, then, bob. i never claimed to be a tech-head.
bob s Says
stick to the other b.s. you cover. you obviously have no handle on technology.