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In their own words


Ken Auletta: Google Is Not Trying to Harm Old Media
Many executives in traditional media fervently believe Google aims to conquer the world, says the author of a new book about the Internet giant. At least Google passed on buying the New York Times.


By Patrick Phillips
I Want Media, 11/03/09


Ken Auletta, the longtime media columnist for The New Yorker, explores "the roiling crosscurrents of the new media terrain" in his new book, "Googled: The End of the World as We Know It," published this week.

Auletta observes that professionals in newspapers, television and other media increasingly view Google as a possible threat to their livelihood, as the Internet behemoth prospers and many in "legacy" media flounder.

Google once discussed buying the New York Times, Auletta says in this Q&A interview. But the search leader decided that such a move would damage its "neutral" identity. [Update] Google "is not obsessed with killing competitors," Auletta adds. "They're obsessed with eliminating inefficiencies."


Why is your book subtitled: "The End of the World as We Know It"?

Ken Auletta: Because the media world we grew accustomed to is no more, washed over by the digital wave. This is not just true of newspapers and magazines and books, with their expensive and inefficient reliance on dead trees for paper and cumbersome printing presses and pollution belching trucks to distribute them.

It's also true of an advertising world that guesses who it is reaching when companies like Google can identify who is clicking on ads. It is true of movie theaters that may not be able to sell enough popcorn to withstand the threat from downloaded movies. It is true of telephone companies who will find it difficult to compete with free calls and applications that consumers -- not the telephone companies -- will control. It is true of software that may no longer be sold in expensive Microsoft packages and will instead be available for "free" on Google's cloud.

CEO Eric Schmidt told you that Google is poised to become the first $100 billion media company. So it's official: Google now defines itself as a "media company"?

Auletta: Yes, and the media companies that wail about Google's power attest to this as well.

Won't such a definition offend Google's content partners in traditional media?

Auletta: Yes, that's the delicate balancing act most companies must make in the new world. The word "frenemy" was invented to describe companies that are both collaborators and competitors.

Google is a media company in terms of generating advertising revenues, not producing content. Is there any indication that Google could enter content production?

Auletta: Google co-founder Larry Page and CEO Eric Schmidt told me that they had discussed buying the New York Times, but in the end decided that if they succeeded it would sabotage their identity as a neutral search engine. The reason they are interested in preserving the New York Times is that Google's search engine depends on good information, and the Times is the world's best newspaper.

On the other hand, Google already produces content. It has made production deals to create content for YouTube. It established Knol, its effort to compete with Wikipedia. The tensions between remaining the Switzerland of search and pushing its own content will only grow.

Google is often listed among the world's most trusted brands; many traditional media brands aren't. Why?

Auletta: Google is free, which instantly creates good will. Just as important, Google earned the trust of users by insisting, from day one, that they would not try to trap them in a Google portal as AOL or Yahoo did. Instead, Google chased them off its site and to their search destination.

They sacrificed revenues by refusing to clog their home page with ads. They expanded their array of free products to include about 150 offerings, including such cool apps as Google Earth or Gmail. And its "Don't Be Evil" slogan -- like Apple's uphill battle against mighty Microsoft -- positioned Google as the appealing underdog.

Rupert Murdoch has famously accused Google of "stealing" content from publishers. Your take?

Auletta: Like other newspaper publishers, Murdoch is alarmed that online news transforms much of his content into a commodity, and he wants to try -- as the Wall Street Journal and the Financial Times have successfully done but few others have -- to create a firewall so that newspapers can charge online. It is also the opening shot in what he hopes will be a negotiation, and that companies like Google will step forward to pay for the content of his newspapers.

Google allows news providers to opt out of having their articles indexed in its search pages. Why doesn't Murdoch simply opt out?

Auletta: Ah, the conundrum. Opt out of search and reduce the number of people exposed to your newspapers. Opt in and risk becoming a commodity. Google argues that by opting in Murdoch's newspapers will attract more eyeballs, which will allow them to sell more ads. Murdoch counters that the ads sold wind up selling for about one-tenth the price of a print ad, and generate little revenue. Both are right. Which deepens the conundrum.

You said recently: "In the Google world, the content creators are the engineers." What did you mean?

Auletta: Start from the assumption that anything that captures our attention -- a YouTube video, e-mail, a social network, a game on our smartphone -- is content. The folks who create that content are engineers. Google News aggregates rather than creates content, but the engineer who designed it succeeded in capturing the attention of a vast audience. A reason Google awards its engineers a day a week or 20 percent of their time to work on any project of their choosing is because they want them to create new products -- content -- to capture the attention of users.

Is content king -- or is technology?

Auletta: The consumer is king, and technology enables this. It allows consumers to choose what they want and when. It provides portability. It provides choice. And it broadens the definition of content. If I'm spending two hours on Facebook, that's two hours not spent on some media content company like CBS or on a book. Is Facebook content? It is to the person spending two hours on Facebook.

Eric Schmidt says he believes that newspapers won't die, adding that Google "needs these content partners to survive." But he is obviously aware that Google could be contributing to their demise. How does he come to terms with this paradox?

Auletta: He doesn't really. Google pumps some money into newspapers with its AdWords and AdSense programs, but Schmidt acknowledged to me that these will not restore newspapers to good health. Some newspapers will die, he also acknowledged. It is true that Google search needs good information, and many newspapers provide it. But Google is under no illusions that the "good old days" will return, or that Google is responsible for the demise of newspapers. Schmidt's soft words are meant, in part, to take the onus off Google.

Does Google really "do evil" to traditional media?

Auletta: Google is not composed of cold businessmen; they are cold engineers. The difference is that Google is not obsessed with killing competitors; they're obsessed with eliminating inefficiencies. They're not trying to harm the New York Times with Google News or NBC with YouTube. In some ways, they help them. A reason NBC's "Saturday Night Live" is reaching a younger audience is because it winks as YouTube downloads its skits.

But Google and the Internet do disrupt traditional media business models. More than a few traditional media executives fervently believe Google aims to conquer the world. By obsessing about Google's "evil" intentions they spend too much time playing defense and not enough time figuring out their own digital offense.

What do you see as Google's biggest challenge going forward?

Auletta: Google has many challenges, both internal and external. Internally, size is a challenge -- how to avoid becoming bureaucratic? How does Google retain good engineers and executives who might want to join upstarts where their opportunities to play bigger roles, and make a financial killing, increase? How does Google not succumb to hubris and become self-satisfied? Externally, Google need worry about: new search competitors; the many threatened corporations that want to gang up on them; and the government bear that can, as Microsoft learned a decade ago, smack them down.

Could Google come to be eclipsed by social media, such as Facebook or Twitter?

Auletta: Yes. Instead of getting thousands of answers to a question about, say, what's the best camera to buy, what if Facebook or Twitter users could ask their friends for recommendations? That's a more trustworthy search result than a flood of anonymous search results.

Google co-founder Sergey Brin told you that "people don't buy books anymore" and that you should put your new book online for free. Your response?

Auletta: When Brin told me this I asked him a series of questions. Who, I asked him, would pay me a salary to work on the book? Who would pay for my 13 trips to Google, including airfare, hotel and car? Who would edit the book? Who would do the book tour and marketing? Who would prepare the index? Who would do the legal vetting?

By the end of my questions, Brin wanted to change the subject. The reason, I think, is that he has an innocent faith in the Internet and inadequate knowledge about how books are published.

Will we see "Googled" online for free?

Auletta: No. Writing is how I earn a living. For me "free" would send me to the poor house.




 
Update:

Google CEO Eric Schmidt addressed the talk of his company's interest in buying the New York Times during an interview on Nov. 5 with Neil Cavuto of Fox Business Network:

"We had a series of conversations about what to do about content, and we ultimately decided to not to get into the content business. We looked at the New York Times but also other institutions. Rather than naming them, let's just say we did a survey. And our conclusion was we are not very good at [content].

"We like information, but we think it's better for those to be managed the professionals that are managing them well. I'm careful not to ever rule out anything, because that's a mistake as a CEO. But I would tell you it's highly unlikely we would get into the content business.

"It's fundamentally better for us to be the supplier of platforms and monetization and revenue and advertising and subscription services to all of these players. We desperately need the newspapers, the magazines, the media companies to be successful because we need their content.

"The thing we can offer is better monetization, better targeting and a better user experience viewing content created by very, very sophisticated people. ... If it's content, where you have people producing content that viewers are looking at, we're better off powering it, not writing it and owning it."



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