For a while, the blogs were burning with the rumors that Google was going to buy a newspaper. Eric Schmidt has laid these suspicions to rest by announcing that Google will not pursue that option.
The speculation was not without warrant. Google was considering either purchasing a newspaper, such as the struggling New York Times, or otherwise helping new businesses in some way, particularly business which were emerging as non-profits.
The decision not to proceed with a newspaper acquisition is based on the company’s determination not to cross the line between technology on the one hand and content on the other. Without question the newspaper industry needs help, but how to help them is yet an unanswered question. Although Rupert Murdoch’s News Corp. may try to charge for their news service, few if any will bite, simply because news—any news—is available for free anywhere else on the web. The only source for newspaper income can come from ads. That’s where Google comes in.
While Google wants to use technology to enhance content, a close linkage, like actually buying a newspaper, may be counterproductive. As an alternative, Google will focus their efforts on improving web technology that helps publishers. In the end, this help should improve online ad revenue for publishers. Besides, as Eric Schmidt observed, the newspapers that they were considering as acquisitions were a bit too expensive. Furthermore, buying newspaper would land them in a litigious pool that they do not have the appetite for right now.
The non-profit ideas originated around some discussion of turning failing newspapers into nonprofit organizations. Google’s charitable arm, Google.org, received encouragement to contribute their resources to move this idea ahead. Again, Schmidt put these speculations to rest by explaining that moves like this “are unlikely to happen without some massive, massive set of corporate bankruptcies.”
