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August 27, 2008

Google stoops to conquer: Schmidt frets about decline of US investigative journalism

By Peter Kirwan MM blog

Last year, Sly Bailey cheekily appended a quote from Larry Page, co-founder of Google, to a presentation she gave to analysts and investors.

Page’s quote ran: “Newspapers have a good future. A laptop runs out of battery and you can’t tuck it under your arm.”

Nice, upbeat, stuff. During the past year, however, the prognosis from The Googleplex seems to have darkened a bit.

During June, Eric Schmidt, Google’s chief executive, was to be found telling conference audiences that there was a “a huge moral imperative” to help the US newspaper industry with a “shared problem” that he described like this:

“Newspaper demand has never been higher. The problem is revenues have never been lower. So people are reading the newspaper they’re just not reading it in a way where the newspapers can make money on it.”

But only a month later, at a conference held by AdAge in the US in late July, Schmidt has started to sound doubtful about the possibility of helping the news business.

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At this conference, Schmidt started by criticizing the “conventional wisdom”:

“More people are online than ever, the existing ‘older businesses’ will in fact discover how to monetize in the new formats, that new information will become possible, and we’ll all get through this.”

Schmidt wasn’t buying it. He told the audience: “I’m sorry to be such a downer, and I’m very worried about it, so I’d rather just confess. . . The evidence does not suggest it’s true.”

Schmidt went on to describe the prognosis for US newspapers as “particularly bleak”:

“It’s a tragedy for America because the newspaper industry — in particular investigative reporting — is so fundamental to how our democracy works.”

“The classic example is how many people are covering the war in Iraq to find out what’s really going on — after we as a country spent a trillion dollars on it? Seems like we should spend a little more to cover it.”

Indeed. These latest (apparently unscripted) comments mean that Schmidt has been caught ruminating publicly upon the problems of the US newspaper industry three times in as many months.

Call me fanciful, but this does make me wonder what’s being discussed away from the podium. If Schmidt’s comments indicate the existence of smoke, where’s the fire?

PS: For those of you with a strong constitution, Valleywag, Silicon Valley’s in-house gossip site, has an little survey entitled “Five ways the newspapers botched the web”.

It’s a bestiary of messed-up Stateside efforts at online diversification that runs from Knight Ridder’s 1983-vintage effort Viewtron (“We’re dancing naked on the stage of history”) to New Century Network, launched in 1995 (“The graddaddy of fuckups”)

It’s gory in extremis. Coincidentally, the dismissive tone nicely captures the attitude among many in Silicon Valley toward the US newspaper industry.

It’s a fact that large swathes of the US software industry regards the news business as the latter-day equivalent of the midwestern steel-making plants that shut their doors during the Reagan era.

This may put Schmidt’s touchy-feely obsession with newspapers into context. The cynical interpretation is that Google’s chief executive shares the views of his peers, but needs to massage perceptions of his company in the run-up to US government anti-trust intervention.

Clearly, The Googleplex would also like the US media to take an enlightened view of its emerging monopoly status. This is something that certainly didn’t occur in the case of Google’s rival Microsoft, which endured a decade of negative media coverage after the Department of Justice instituted anti-trust proceedings in 1998.

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