Google maintains its use of snippets is legal

Schmidt highlighted the significance of newspapers and talked about the challenges and opportunity that arose due to the advent of new technologies.

He assessed, “One of the fundamental problems with the Internet is that it doesn't respect traditional scarcity structures. It's very hard to hold information back.”

Referring to the fact that Google makes a lot of money through Google News that uses headlines and snippets of newspaper stories, he said, "We think the answer is advertising.” He admitted, "I guess we have a bias” as 98 percent of the company’s revenue comes from the Google's ad business.

He insisted that newspapers need to be more innovative. He averred that the only way to survive in today’s publishing industry is not to be bothered about controlling the content, but about making a profit from it.

The newspapers industry has been struggling to keep its head above the water. The Associated Press (AP) said Monday that it would ask Web sites that extract news information to first take authorization from the respective publication and then share profits with them.

Google stood by its stand and insisted that its use of snippets and headlines in Google News is legitimate under copyright law. Mr. Schmidt said of the controversy regarding Google News, “The ultimate resolution of all is this will be determined by how you interpret fair use.”

Jim Chisholm, a consultant with iMedia Advisory expressed surprise over the outcome of the meeting. He said, “I was surprised that the publishers really let Google off the hook. While Google News generates a lot of audience, ultimately, the question is going to be who is going to make the money out of that: Google or the publishers.”

Prior to Mr. Schmidt’s speech, William Dean Singleton, chairman of The AP, said, “We don’t plan for anyone to use our content unless they pay for it. The licenses we do in the future will limit how and where our content is used.”