Google CEO: Newspapers Can Make Money Online

Google Inc. Chief Executive Eric Schmidt told a group of editors Sunday that he is confident that newspapers will find new ways to make money online by harnessing the vast reach of the Internet.

Media executives have accused Google of draining readers and advertising from newspapers' Web sites. But in a speech to open the annual conference of the American Society of News Editors, Schmidt said Google recognizes that newspapers are vital to democracy and provide a critical source of online content.

"We understand how fundamental your mission is," he said.

Schmidt predicted that the news business will find a new model, based on a combination of advertising and subscription revenue. He said Google hopes to facilitate that, but he offered no specifics.

"We have a business model problem. We don't have a news problem," Schmidt said. He added: "We're all in this together."

Schmidt encouraged his audience to experiment with everything from social media to personalized content to engage readers.

"Technology allows you to talk directly to your users," he said.

He also said the news business needs to reach out to readers using mobile technology, delivering content through wireless devices such as Amazon.com Inc.'s Kindle, Apple Inc.'s iPad and Google's own Android smart phones.

Reaction to Schmidt's speech was mixed.

Anders Gyllenhaal, executive editor of The Miami Herald, said that even though Google drives a lot of traffic to his newspaper's site, he remains unconvinced that Google sees newspapers as true partners. "We really are going in different directions," he said.

Still, Jonathan Wolman, editor and publisher of The Detroit News, said he was "heartened to hear the Internet geniuses talk about newspaper content as an essential ingredient."