Fortune Magazine has an interesting interview with Eric Schmidt about Google’s relationship with newspapers:
Maybe their time [newspapers’] has just come and gone?
No. They don’t have a problem of demand for their product, the news. People love the news. They love reading, discussing it, adding to it, annotating it. The Internet has made the news more accessible. There’s a problem with advertising, classifieds and the cost itself of a newspaper: physical printing, delivery and so on. And so the business model gets squeezed.
So what else can Google do?
We have a mechanism that enhances online subscriptions, but part of the reason it doesn’t take off is that the culture of the Internet is that information wants to be free. We’ve tried to get newspapers to have more tightly integrated products with ours. We’d like to help them better monetize their customer base. We have tools that make that easier. I wish I had a brilliant idea, but I don’t. These little things help, but they don’t fundamentally solve the problem.