Google Executive: Newspapers need to experiment, experiment

Google is fighting back accusations that it’s stealing newspapers content when it puts excerpts on its sites. The company has always claimed that it sends a significant amount of traffic to the original sites and therefore feels it plays an essential promotional role for newspaper websites. Hal Varian, Chief economist at Google has now written a blogpost with a number of points claiming the internet (and Google) are not the reason for the demise of printed newspapers. These are his main points:

  • Newspapers circulation has been falling since 1985
  • 40% of internet users looked at online news ‘yesterday’
  • Average time looking at online news is 70 seconds (news is mostly read at work)
  • Average time looking at a print edition is 25 minutes
  • Less than 5% of advertising revenue comes from online
  • Search engines deliver 35-40% of traffic to major news sites (comscore)
  • News is not the biggest advertising generator, the specialist verticals are
  • These verticals have subsidised the news parts but now people go to other sources

He then proposes that there is not one solution for newspapers other than try all the options that are out there.

“In my view, the best thing that newspapers can do now is experiment, experiment, experiment. There are huge cost savings associated with online news. Roughly 50% of the cost of producing a physical newspaper is in printing and distribution, with only about 15% of total costs being editorial. Newspapers could save a lot of money if the primary access to news was via the internet.”

He mentions the Kindle and iPad as devices that may encourage people to read more news. Google has also developed a number of ways to make news accesible in new ways with Fast Flip, Living Stories and Starred stories. He believes the opportunities liee in multimedia content, interactivity and reader involvement. Varian also made the following presentation: (listen to the audio version: audio of Hal’s presentation).

030910 Hal Varian FTC Preso

Marco | Editor

Editor at large and founder of a bunch of stockphoto businesses