Google’s Schmidt encourages newspapers to go online for more profits

Google’s CEO Eric Schmidt unveiled his belief at the annual conference of American Society of News Editors in that newspapers can make money online.

Schmidt lauded newspapers as "fundamental" to democracy and predicted the newspaper business would formulate a new business model based on advertising and subscription revenue.

As he noted, newspapers actually don’t have news problem, but do have business model problem.

He also suggested that newspapers tap social networks and personalized content to engage readers, the AP reported.

Obviously, readers have increasingly gone online for their news, that’s why papers have suffered declining subscriber numbers and lower advertising revenue, resulting in a dramatic industry contraction.

Newspaper publishers and the Associated Press have accused Google and other news-aggregation sites for their woes, leading to threats that they will delist their content and begin charging online readers.

In January, the New York Times announced that it would institute a metered pay plan next year in which readers would have access to a limited number of free articles before being invited to subscribe. Newsday, announced plans in February 2009 to begin charging online readers for access to its content.

In a more innovative direction, The Wall Street Journal was planning to begin charging nonsubscribers micropayments for access to individual articles. The system would reportedly charge small fees to occasional users who may not be willing to pay more than $100 a year for a subscription to WSJ.com.