I agree that Google is forcing a new business model down old medias' throats (such as the newspaper), and I agree with Kevin's comment that Murdoch is merely testing how much he can get away with in this 'new world'. However, Google did cave in and closed a 'loophole' in this free access to paid content on News Corp.
But I do differ on the point about Schmidt's fantasy '..suggests ignorance of what news actually is...'.
Schmidt's 'fantasy' is 3 fold:
Know who I am
Personalization starts with this. For any recommendation based service one must know who you are delivering this recommendation to, by definition a recommendation is personalized or customized.
Knowing "who I am" is not limited to knowing my name, or date of birth for example. It can include many other things that span where I was born, my current and past fields of work, where I went on vacation, my blog, my twitter, etc. Odds are "privacy" comes to your mind right now, but if you are a member of any online network you are already sharing more about yourself today, than you ever did in any other form in the past. Think about your Twitter account, Facebook profile, Amazon, Flickr, eBay, MySpace, Hi5, blog, RSS feeds you subscribe to, etc. etc. Why not put "your lack of privacy" to a good use? such as receiving better news.
Know what I like
You buy a newspaper today and you get a dozen different sections, all of which you have technically paid for but in reality you might not read them all. You get the main paper, the financial pages, sports, entertainment, comics, health/living.
I never read anything past the main page of the financial times, I never read the health/living pages, I never read non-football (or soccer as it is called in this part of the world) news - why should I pay for them? I rarely buy a newspaper, I read it online, why should the online version be modeled exactly like the paper version.
Kevin claims this will lead to tunnel vision, but on the other end of the spectrum I don't have time to digest 60 pages of news. I do see his point though, just because news about the Middle East is more often bad news than good, doesn't mean this fantasy gadget would block it from me. By knowing who I am personalizing my news would mean that news about the Middle East would bubble to the top of my reading list - maybe not your reading list.
I would also argue that the current model results in tunnel vision. Looking at the Toronto Start page today I see news about PM Harper's stop in China, Lessons of the Montreal Massacre, Michael Bryant, Pakistan troop surge, Russian nightclub, GM shakeup, violence and racial slurs in kid's hockey, etc.
Seems like tunnel vision to me. What I see is completely controller by the paper's editors, not me.
The only thing I clicked on that front page was the Montreal Massacre link, why? because I learned of it at McMaster were I studied.
Its not a lack of creativity, its a lack of courage and the ability to know when a business model has passed its final stretch. It was a good run. Move on.
Know what I have read
This one is the most important step, not because it decides what not to show me again, but vice versa. Knowing what I have read, helps identify what follow up stories I need to see. By reading about the real estate fiasco in Dubai the past few weeks, I would like to see what happens next.
Google can help newspapers
Yes, Google wants to do that, not because it wants to help them, but because it wants to shape them into a business that it can benefit more from. Asking them to share their 'treasure trove' i.e. access to users' data - for free - is absurd. But by investing in AdSense, the newspapers can gain access to this treasure. Why should Google give 'unrestricted access to the data of its users'? , they worked hard to get that, and provided a lot of free services to gain access to that treasured currency.
Murdoch Fantasies
Murdoch is a business mastermind, but I think he got this all upside down. People don't pay for content, and whether its on Google or on Bing I will get a link from Twitter that will point me to a 3rd party site that aggregates this news or some other way that bypasses the wall he is erecting around his content.
Can you really believe you don't need Google?
Ten years ago people paid for online content, only because it was a new way to deliver newspapers i.e. you didn't have to wait for it to be delivered, or end up with a stack of papers to throw out next to the shoe rack. People will pay for how content is delivered, but unfortunately delivering it via a browser is a decade old model. Today there are many other forms that people would pay for such as on your phone or Kindle. Its the same content though, and some might not want to pay for it. However, personalized news is yet another form, and personalized form delivered to your favorite portable gadget is yet another. Now that is something I would subscribe for or watch ads to read.