FT: Would you ever consider buying a newspaper; they’re cheap right now?

ES: We’ve actually looked at this and we’re trying to avoid crossing the line between the infrastructure and technology that Google provides and the content that our partners provide. There is a line and we’re trying to stay on our side it.

What stood out to me in the full FT transcript is Schmidt’s positioning of Google as a technology company that (tries to) create advertising solutions for content providers, but one that seems fine with staying removed from creating content itself. This situation is complicated by Google’s seeming lack of success at extending its advertising services beyond the internet, as Schmidt acknowledges radio and print mediums do not offer the same amount of rich data feedback – meaning that essentially, what makes Google’s web-based advertising work so well has proven non-transferrable. The potential implications here in terms of the limits of viable opportunities for horizontal expansion are huge, even though Google’s current earnings multiple of 28x is far off its peak, earnings growth is still expected to accelerate over the next few years.

The conundrum Google faces – it needs good content, and the primary providers of quality content (print media) are struggling – is exactly what we were talking about in relation to the New York Times (NYT). From the three of us, the two divergent views on the NY Times, and major newspapers in general, were:

1. There is immense value in being the first call for newsmakers to reach out to – having a first-class newsroom results in getting leads (or today, leaks) first, which makes the content produced more valuable to end readers.
2. While there is a societal benefit to having critical journalists, it is not something that has been adequately compensated for through subscription revenues.