Google's New Plan: If You Can't Lick 'Em, Join 'Em

The WSJ reports today that Google’s new plan is to partner up with some old media content producers and share revenue with them.

Among the partner candidates are MTV, Fox Interactive Media and the good ol’ Associated Press. Apparently Google has pledged $900 million in minimum payments to Fox in connection with the content deal.

I found this quote, the functional equivalent of a repudiation of Google’s last new plan, interesting, inasmuch as it is basically saying “our last big idea was a bad one, but this one is a good one”:

“We can approach them (the media and entertainment firms) in a way that we can actually do business together and not screw things up,” said Google Chief Executive Eric Schmidt at a press conference Wednesday.

While this is a far cry from Google’s prior attempts to index old media content without permission or payment, it still sounds a little like Google tossing a ton of money at someone in the hope of catching lightning in a bottle again- the way it did with search.

And there’s another lurking problem.

Any time you leverage off of content created by others, there is the real risk, if not inevitability, that the content producers will try to take out the middle man and keep all the loot for themselves. We found that out with message boards back in Bubble 1.0. The record label cartel is finding it out now, as it tries in vain to stuff the cat back into the bag.

It’s one thing for these Web 2.0 companies to leverage off of bookmarks and links added by its users. Bookmarks and links cost no time or money to produce and have no intrinsic value. Not so with old media content that takes time, people and money to create.

In sum, I can understand the logic of Google’s plan. And it may work for a while. As more and more old media own up to the inevitable and stick their toes in the online water, they need a trusty guide to get them past the pirates and stealers (not all of whom live in Pittsburgh). But once they settle online, the guide becomes less valuable.

In the meantime, it’s going to be expensive for Google. $900 million is a boatload of AdSense impressions.

Google better get it while they can. Because, eventually, many of the content producers will try to remove the middle man.

You can count on it.