The newspaper industry continues to blame Google (GOOG) for its woes, and Google continues to claim its innocence. The search engine giant's CEO, Eric Schmidt, says that his company could actually help the newspaper industry survive the shift from print to digital ... a shift that's been more than a decade in the making, he was kind enough not to note.
According to Schmidt, publishers need to dig into the online environment and find new ways to generate revenue. "With dwindling revenue and diminished resources," he wrote in an op-ed piece published in News Corp's (NWS) Wall Street Journal, "frustrated newspaper executives are looking for someone to blame."
He continues, "Much of their anger is currently directed at Google, whom many executives view as getting all the benefit from the business relationship without giving much in return." He disagrees, saying that the facts "suggest otherwise."
Of course, the time spent complaining would probably be better spent looking for a solution.
The newspaper industry believes that Google is profiting by running ads alongside their content. Meanwhile, Google, which pulls in revenue of around $22 billion a year, says that ad revenue associated with news articles accounts for a "tiny fraction" of its revenue.
The missing link, here, is that the destruction of newspaper value does not necessary translate to an increase for Google. The availability of content via Google has wreaked havoc on the newspaper industry, effectively eliminating a market. The result is something less than a zero-sum game.
Schmidt's op-ed comes shortly after Google struck a deal with News Corp. to protect more of the news provider's content from free access without depriving its websites of search-based traffic.
Diplomatically, Schmidt communicated a vision of the future, in which a combination of free and paid content is accessed via e-readers, much as they thumbed through the newspaper ... once upon a time.
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