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Google CEO appeals to skeptical newspaper group

John Letzing
MarketWatch (MCT)

SAN FRANCISCO - Google Inc. Chief Executive Eric Schmidt sought to allay newspaper industry executives' concerns on Tuesday, telling them they need to work together with the Internet giant while downplaying recent indications of growing friction between Google and the Associated Press.

Schmidt's remarks came shortly after AP executives expressed concern publicly about the growing ability of Internet services such as Google to control access to the news without properly compensating the organizations that produce it.

Schmidt told an audience at the Newspaper Association of America's annual convention in San Diego that the notion that Google is now at odds with the AP is overblown. The CEO pointed to a licensing agreement Google currently has with the powerful news organization.

"We have a very, very successful deal with the AP and hopefully that will continue for many years," Schmidt said.

And while Schmidt offered praise for the way newspapers initially embraced the Internet in the 1990s, he offered a less favorable impression of how they've sought to avoid having the distribution of their content pulled out from under their control since then.

"There wasn't an act after that," Schmidt said. "You guys did superb job, and the act after that is a harder question."

However, Schmidt acknowledged the role of Internet services such as Google in altering the business of delivering news to their own financial benefit. And he underlined a fundamental disagreement between Google and many of its detractors over what constitutes the legal use of copyrighted material.

Schmidt took issue with a question about the impending "erosion" of intellectual property rights for news publishers thanks to the Internet, while allowing that his understanding of the "fair use" of copyrighted material differs on the Web from that of many in the legal profession.

"All of these partially thought-through legal systems are being challenged by the ubiquity of the Internet," Schmidt said.

Google has been sued for copyright infringement by media companies including Viacom Inc., book publishers and others.

Schmidt also addressed questions about Google's ability to sift through news content and selectively present it alongside advertising without input from news organizations. Google uses an algorithm to present news stories that is indecipherable outside of the company, and is constantly being tweaked.

While Schmidt assured the news executives that content from their publications would "float to the top in our search ranking," he said the company also seeks to provide a platform for lesser-known, quality publications. "We've not come up with a way algorithmically to handle that in a coherent way," Schmidt said.

The CEO also offered up some frank criticism of the technical capability Internet sites built by newspaper publishers.

"I think the sites are slow," Schmidt said. "They're actually slower than reading the paper, and that's something that can be worked on, on a technical basis."

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