According to an interview with the Financial Times, Google (NYSE:GOOG) has been considering buying a newspaper or using the charitable arm of the search giant to support new businesses that seek not-for-profit status, but now CEO Eric Schmidt says they are “unlikely to pursue either option.”
In the interview, Schmidt said that buying a newspaper could be “crossing the line” between content aggregation and content creation, and that the candidates evaluated for acquisition were deemed either too expensive or too laden with liabilities to be viable.
When pressed for comment on various suggestions for saving newspapers, Schmidt reiterated what he had said during John Kerry’s recent senate hearing, which can be boiled down to a) people aren’t going to pay for content because they will always be able to find it free, and b) Google isn’t stealing your revenue, it’s sending you free traffic.
“Clever” schemes to shelter newspapers by turning them into not-for-profit entities aren’t likely to succeed either, according to Schmidt, at least not without massive corporate bankruptcies first.
Schmidt’s position on the not-for-profit status plan is completely logical. Not-for-profit status would grant the newspapers some tax benefits and would prohibit “excessive” profits or dividends to be awarded to individuals or shareholders, but would not dramatically change their corporate structures, would not automatically change their business model, would not magically fill their coffers, and, most notably, would prohibit them from engaging in excessive lobbying efforts for political parties. Depending on the party in power, this could put newspapers with editorial viewpoints deemed “non-mainstream” at risk. At risk of what exactly? Not sure. Ask Rick Wagoner what happens when you take “help” from the government.
Ultimately, the only advice Schmidt offers newspapers is to embrace the fact that the public now has multiple means of getting news and information, and to ensure their information is getting in front of as many eyeballs as possible. Schmidt also advised papers to make their news more useful to the digital consumer by making it easier for the reader to delve deeper into topics. The subtext, of course, is don’t sue Google because you don’t know what to do with the traffic being sent to your Web site.
Assuming that suing Google is not a viable business model, what should newspapers do with the traffic being sent to their Web sites to increase revenues? Encouraging the readers to stay longer and increase pageviews and time-on-site to justify raising ad rates would be a great start.
Example: Instead of running a news story exactly as it appears in print, make important words in the story hyperlinks to tag pages or category pages (or even wiki-like background information pages), so readers who want more detail and historical information can access it quickly. Every additional click puts one more page of the site in front of the user (and that means one more opportunity to view ads) and keeps the user on the site longer (which increases time on site and reduces bounce rate). Additionally, scraper sites do not generally pick up these embedded links, so in theory, the same story appearing on a scraper site will have less value for the newspaper. Scrapers (or syndicators) that do pick up and include the embedded links will be directing traffic back to the originator’s site, so while some initial traffic might be lost, there will be some recovery of those eyeballs and an opportunity to show them the superiority of the user experience.
Just slapping sociable at the top of stories and having some “related article” suggestions at the bottom of the story aren’t enough to keep readers engaged. Satisfy the reader’s need for more detail and deeper background information and they’re likely to keep coming back for more.