Google addresses newspaper woes

The majority of newspapers should be online, says Google boss Eric Schmidt, amid criticism it should share some of the millions it makes from newslinks.

Media owner Rupert Murdoch has questioned if aggregators like Google should pay to use content.

The Associated Press is to sue to protect its content at a time when the industry is losing readers to the web.

"I would encourage everybody to think in terms of what your reader wants," Mr Schmidt told newspaper bosses.

"These are ultimately consumer businesses and if you [annoy] enough of them, you will not have any more," he warned the Newspaper Association of America's (NAA) annual conference in San Diego.

While he praised the way newspapers initially embraced the internet, Mr Schmidt said they had since dropped the ball allowing the likes of Google to take over content distribution.

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

"Fair use"

In a question and answer session at the end of his keynote address, suggestions that Google and the internet were eroding the intellectual property rights of newspapers was downplayed by Mr Schmidt."From our perspective, there is always a tension around fair use - and fair use is a balance of interest in favour of the consumer."

Industry analyst Ken Doctor of Outsell told the BBC this was the wrong way to look at the argument over how Google profits from newspaper content.

"The real question is, 'Is it fair for news companies to produce all this content for Google and for Google to keep the lion's share of revenue?'

"What we should be focusing on is 'fair share'." said Mr Doctor.

In a blog post, the search engine giant claimed it did provide a financial kickback for newspapers through online advertising.

"We drive traffic and provide advertising in support of all business models - whether news sources choose to host the articles with us or on their own websites," wrote Alexander Macgillvray, Google's associate general counsel for products and intellectual property.

"Users like me are sent from different Google sites to newspaper websites at a rate of more than a billion clicks per month."

Techmeme, which is an aggregator of technology news, agreed that the value of what they did was in driving traffic back to the original publisher of a story.