Google’s Schmidt Says Newspapers Must Innovate

On the heels of yesterday’s brouhaha over online misappropriation of AP content, Google CEO Eric Schmidt delivered the closing speech at the Newspaper Association of America’s annual meeting yesterday. Schmidt praised the industry’s importance and efforts at innovation during the early days of the Internet but criticized its subsequent staidness, saying, “It’s obvious to me that the majority of the circulation of a newspaper should be online, rather than printed. There should be five times, 10 times more circulation because there’s no distribution cost.” He added, “I would encourage everybody: think in terms of what your reader wants,” he said. “These are ultimately consumer businesses and if you piss off enough of them, you will not have any more.”

Of the recent AP initiative to track and take legal and legislative action against those sites and services which the AP feels mishandle its content, Schmidt was largely reticent, saying only, “I was a little confused by all the excitement. We at Google have a multimillion-dollar deal with the Associated Press not only to distribute their content but also to host it on our servers.”

It’s hard to believe that the attitude at Google headquarters is really that cavalier. Earlier this week, Wall Street Journal Editor Robert Thomson called Google an “Internet parasite,”  sucking the blood (read: money) out of content without absorbing any of the costs. And the Google name has been mentioned by numerous sources as the biggest possible target of the AP’s wrath, “multimillion-dollar deal” notwithstanding. But, then again, public legal battles are nothing new for Google, so perhaps they’ve adopted a steely aegis against the haters. And with 72% search market share in February, according to Hitwise, Google’s naysayers don’t seem to have made any dent in the search engine’s popularity at all.