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April 12, 2010, 8:28 a.m.

The future is mobile, and other thoughts from Google CEO Eric Schmidt’s speech at ASNE

Yes, he got the inevitable “shouldn’t you pay content providers?” question from an audience member. And, yes, he gave the inevitable “most news organizations actually want the traffic we provide” answer. But for the most part, though it tread familiar territory, Google CEO Eric Schmidt‘s speech last night — delivered to a packed half-ballroom at the American Society of News Editors conference in DC — was an impressive feat of rhetorical tight-rope-walking. (Text: You, news editors, are guardians of democracy. Subtext: You, news editors, should probably rethink your patrol systems.)

So was the speech well-received? My read: the crowd reception to the uber-exec and his thoughts was cordial, but — despite the many, many compliments Schmidt paid to journalism and journalists during the course of the talk — not overly friendly. (Usually, at a speech like this, there’d be a vibrant back-channel conversation, via Twitter, that would allow a more nuanced assessment. Last night’s speech didn’t have that back-talk; relatively few people were tweeting it, though many were taking notes on reporters’ pads.)

Below, I’ve excerpted the sections of the talk that I found most interesting; they’re listed in chronological order to give you an idea of the arc of the speech.

On newspapers and discovery:
I love newspapers. I love of reading them — that when you’re finished, you’re done, and you know what’s going on. I love the notion of discovery that newspapers represent…. Newspapers are fundamental, not just in America, but around the world.

On information and democracy:
We have goals in common. Google believes in the power of information. We believe that it’s better to have more information than less. We also understand that information can annoy governments and annoy people…but that ultimately the world is a better place with more information available to more and more people. And the flow of accurate information, of the diverse views and debate that we’re so used to, is really, really fundamental to a functioning democracy.

On criticism (and sympathy):
You all get criticized all the time. On the left, you get criticized for being too liberal. On the right, you get criticized for being too conservative. In our case, we just get kicked out of China. Same thought.

On journalism as an art form:
We’re not in the news business, and I’m not here to tell you how to run a newspaper. We are computer scientists. And trust me, if we were in charge of the news, it would be incredibly accurate, incredibly organized, and incredibly boring. There is an art to what you do. And if you’re ever confused as to the value of newspaper editors, look at the blog world. That’s all you need to see. So we understand how fundamental tradition and the things you care about are.

On the best of times, the worst of times:
You have more readers than ever; you have more sources than ever, for sure; you have more ways to report. And new forms of making money will develop. And they’re underway now…. So we have a business model problem. We don’t have a news problem. That’s ultimately my view.

On our new emphasis on now-ness:
What do our children know now that our parents did not know when they were the age of our children? They know about now. They know about precisely now, in a way that our parents’ generation did not. That this now-ness drives everything…and what happens is, you experience the reality of the moment in a way that’s much, much more intense.

On the implications of now-ness:
It’s creating a problem which I’m going to call “the ersatz experience problem.” On the one hand, you have a sense of connectedness to everything — literally, every event globally…but you also have a false sense of actual experience, since you’re not really there. So the trade-off is that you know everything, but you’re not physically in any one place. And that shift is actually a pretty profound one in the way society’s going to consume media and news and so forth. And all of us are part of it. And Google is obviously moving it forward.

On Google’s “mobile-first” focus:
It’s important to understand that three things are coming together: the powerful mobile devices that …are paired with the tremendous performance that we can now get on computers…it is the sum of that, and the capabilities and the technologies that will exploit the sum of that, that will define the next ten or twenty years for all of us. So when I say “Internet first,” I mean “mobile first.”

Now, some of the most clever engineers are working on mobile applications ahead of personal computer applications. People are literally moving to that because that’s where the action is, that’s where the growth is, there’s a completely unwashed landscape, you have no idea where folks are going to go.

On news’ mobile/personal/multi-platform future:
Google is making the Android phone, we have the Kindle, of course, and we have the iPad. Each of these form factors with the tablet represent in many ways your future….: they’re personal. They’re personal in a really fundamental way. They know who you are. So imagine that the next version of a news reader will not only know who you are, but it’ll know what you’ve read…and it’ll be more interactive. And it’ll have more video. And it’ll be more real-time. Because of this principle of “now.”

When I go to a news site, I want that site to know me, to know about me: what I care about, and so forth. I don’t want to be treated as a stranger, which is what happens today. So, remember me. Show me what I like. But I also want you to challenge me. I want you to say, “Here’s something new. Here’s something you didn’t know.”

On the sheer volume of information out there today:
The Internet is about scale. I was studying this, because I was trying to figure out how big this thing is. Between the dawn of humanity and 2003, roughly 5 Exabytes of information were created. (An Exabyte is roughly a million gigabytes.) We generate that amount in every two days now…. So there is a data explosion. And the data explosion is overwhelming all of us. Of course, this is good business for Google and others who try to sort all this out.

On the future of display ads:
If you think about it in this context — you have this explosion of mobile devices, you have this connection, and so forth — what does this mean for the business world? Well, it’s obvious that advertising, which is the business Google is in, is going to do very well in this space. Because advertising works well when it’s very targeted. Well, these devices are very targeted. So we can give a personalized ad.

Furthermore, Google — and others — are busy building vertical display ads that look an awful lot like the ads that look an awful lot like the ads that are in traditional newspapers…. In the next few years, you should be able to do very, very successful display advertising against this kind of content. You may not be able to do it against murders, because it’s very difficult to get the right targeted ad in that case — what, are you going to advertise a knife? It’s obviously terrible. I’m not trying to make a joke about it; it’s a real business problem.

On the future of subscriptions:
We and others are working on ubiquitous ways in which subscriptions can be bundled, packaged, and delivered. We’re seeing this today with both the Kindle and the iPad. Both of which have this subscription model which you can test. You can actually find out, “What will people pay for this?” And eventually that model should have higher profitability. Because it has a low cost of goods, right, because you don’t have the newspaper and the printing and distribution costs. So there’s every reason to believe that eventually we’ll solve this and ultimately bring some significant money into this thing.

On the need for experimentation:
A Ralph Waldo Emerson quote is, “Don’t be too timid and squeamish about your actions; life is an experiment.” On the Internet, there is never a single solution…. The fact of the matter is there are no simple solutions to these complex problems. And in order to really find them, we’re going to have to run lots of experiments.

POSTED     April 12, 2010, 8:28 a.m.
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