Local media companies need to “listen” to Eric Schmidt

Long ago, I wrote that the online world is almost entirely counterintuitive to traditional media thinking, and nowhere is this reflected more than in the business practices of Google. In a fascinating interview (transcript) this week with CNBC’s Jim Cramer of Mad Money (you either love him or hate him — I love him), Google CEO Eric Schmidt made statements about their fundamental beliefs that must leave media company executives shaking their heads.

He said the company gives up billions in revenue by keeping ads off the home page. Why? Because it would upset users. “We prioritize the end user over the advertiser,” he told Cramer. This simple statement — if truly adopted by media companies — would revolutionize all of online media. We’d have a race to see who could better serve the wants and needs of the people formerly known as the audience, and that would be a refreshing change from words like capture, drive, and my favorite, monetize.

Google doesn’t provide any guidance whatsoever to stock analysts, and Schmidt’s answer, again, is profoundly simple when he says it would “get in the way” of running the business, adding, “If we started giving quarterly guidance, all of a sudden the whole company would start focusing on the quarter rather than trying to change the world.”

On the company’s heretofore unsuccessful attempts to make money from YouTube, Schmidt said it didn’t matter, at least not right now. He said they make plenty of money already, because YouTube places users in the stream of Google’s other businesses, and that cannot be overlooked. “I’d be worried if people weren’t using to YouTube,” he told Cramer. “Since it’s an enormous success globally, we know we will eventually benefit from it.”

Cramer began the interview with a personal story of how his 5th grade daughter was prohibited from Googling the topic of a class project, which evolved into a discussion of whether Google is “dumbing down” people. Schmidt disagreed and compared academia’s complaints about access to knowledge with the complaints about portable calculators in the 70s. I agree with that, which is why you’ll often hear me reference that we’re in the midst of a second Gutenberg moment in Western Civilization.

Do yourself a favor and go watch the interview. Note Schmidt’s sometimes subtle references to Google as an advertising system. The interview is in three parts (part one, part two, part three). CNBC, by the way, could learn a lot from Google, because they don’t provide the embed code that would allow me to present the videos here. Sigh.

Comments

  1. Google gets it. Broadcasting does not. Cut jobs. Cut spending. Put ads all over your net real estate to try to savlvage the struggling business, while continuing to kill it by that very approach. *Sigh* We need to get focused on “changing the world.”

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  1. […] ‑Richard Terry Heaton also has a nice take on Eric Schmidt’s appearance on his Pomoblog titled: Local media companies need to “listen” to Eric Schmidt […]

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