Google chief looks ahead to U.K. ad goals

Eric Schmidt says Internet will shift to targeted advertising

CAMBRIDGE, England -- Google chairman and CEO Eric Schmidt on Thursday at the Royal Television Society conference sought to allay the concerns of a U.K. media industry facing a TV advertising meltdown.

Schmidt assured delegates that Google was building targeted advertising mechanisms that would return "hundreds of millions" of advertising dollars to content creators over the next decade.

"Our goal is to make large amounts of money for all the content partners in these industries," he said.

But he warned the audience of broadcasters and policymakers here that the next 10-15 years would see a shift "from untargeted advertising to targeted advertising" that would favor mobile and Internet platforms over television.

"I think it's helpful to try and figure what the world is like 10, 12, 15 years from now. What I do know is that advertisers are moving to the Internet and the Internet is more targeted than the traditional TV model," Schmidt said, via weblink from New York, in an interview conducted by BBC director general Mark Thompson.

"My television still shows me ads for products that I will never buy. Untargeted is going down and targeted is going up," he added. "In 10-15 years' time we (Google) will have advertising, micropayments and subscription models and we are working on all of them."

Schmidt said that while some niche content could be surrounded by a pay wall -- such as the News Corp.-owned Wall Street Journal, he did not believe that "in general" online news would become a paid-for product.

"You can't do it for all kinds of news -- the marginal value of news is not worth the cost when there is so much news that is free."

Elsewhere at the three-day confab, Thompson added to the war of words over the future of the BBC, describing News Corp. Europe and Asia CEO James Murdoch's controversial critique of the pubcaster as evidence of a "bi-polar" attitude to the U.K. media market, which only allowed for media that was either "state-controlled" or profit-oriented.

He also said that culture secretary Ben Bradshaw's attack on the BBC Trust was "frankly puzzling" because it was an institution set up by the Culture department.

Thompson said the U.K. had a healthy tradition of public, not-for-profit content that "exists not to make money but to serve the public," which was nothing like the state run or profit-oriented version of the U.K. landscape that Murdoch had sketched out in his speech at the Edinburgh International Television Festival last month.

"Wherever it can be -- and certainly in the case of the BBC -- public space is free at the point of use," said Thompson. "And public space is independent. We will fight tooth and nail to preserve our broad public remit," he said.