FT.com / Companies / Media & internet - Google chief dismisses rivals’ criticism

FT.com / Companies / Media & internet - Google chief dismisses rivals’ criticism


Google chief dismisses rivals’ criticism

By Aline van Duyn in New York
Published: March 6 2007 19:41 Last updated: March 6 2007 19:41

Eric Schmidt, chief executive of Google, on Tuesday shrugged off criticism being heaped on the internet company by rivals and some media companies over its approach to copyrighted content, dismissing it in barbed comments as a form of negotiation.

“The kinds of comments you’re referring to [criticising Google] are in the context of a business negotiation,” Mr Schmidt told investors at a Bear Stearns conference.

“I have learned that as part of being a player in the media industry, the way one negotiates is everything is leaked and you’re sued to death. So the lawsuits...appear to be in the course of doing normal business,” he said, adding this might reflect the preponderance of lawyers in the media industry.

“It is not normal in the technology industry, I can assure you,” he added.

Mr Schmidt’s comments follow a fierce attack on Google by its rival Microsoft over its “cavalier” approach to copyright. Tom Rubin, associate general counsel for Microsoft, earlier accused Google of exploiting books, music, films and television programmes without permission.

A number of book publishers have sued Google for making digital copies of copyrighted books from libraries without permission. In addition, a number of media companies have stepped up pressure on Google to remove their video content from the popular video sharing site YouTube as some negotiations to license the content and share advertising revenues have stalled.

Among the companies facing difficult negotiations with Google are Viacom, CBS and NBC Universal. The discussion started last year after Google paid $1.6bn to acquire YouTube, the most popular online video sharing site. As well as large amounts of videos created by YouTube users, people also share illegally copied videos.

Google has grown to be one of the world’s biggest media companies on the back of strong growth in search advertising, a market it dominates around the world. Google is working to extend its ability to target advertising to other online sectors as well as traditional advertising markets, such as television and radio.

Mr Schmidt said on Tuesday that there was a “genuine disagreement” between it and media companies about the value of copyrighted video material.

“The value is determined by whether people view it, and in our world value is measurable,” he said. “People say: my product is worth x, and Google says: prove it. In that context there is a genuine disagreement.”

Google plans to introduce targeted advertising to the US radio market this year and it is experimenting with introducing it to the television market. Mr Schmidt also said that mobile advertising could become a huge new market sector.

Copyright The Financial Times Limited 2007