Can Google Save the News?

Despite a history of highly publicized tensions between Google and major news organizations, a recent Atlantic article by James Fallows discusses efforts Google is making to help news organizations transition to the 21st century market for online content.

Below are some of the article's points I found most interesting:

1. What's in it for Google (pretty obvious) - Google executives do not claim to be altruistic in their news experiments since the launch of GoogleNews and Google Alerts in 2002. Projects such as "Living Stories", "Fast Flip" and "YouTube Direct" are a reflection of the company's conclusion that their future in facilitating access to meaningful content is dependent on premium content providers surviving.
   
2. Subscriptions or not (or is the question moot)? - Google executives interviewed do not waist time debating the various business models for monetizing content, suggesting that similar to print, various providers will find a pricing scheme that best reflects their particular cost/profit curves and their audiences' demographics and online tendencies. Whether it be purely advertising based (similar to the analog free Metro newspapers handed out on the subway) or various types of paywalls, such as absolute barriers (subscriber only - "Financial Times"), metered approaches (giving free access for a certain amount of clicks per month), or first click free methods (which only show a small portion of the article - think "Times Select" circa 2005). Google, instead is focusing more on coordinating with the implementation of whichever model is chosen, i.e. how to deal with the nuances of ranking Financial Times articles for subscribers vs. non-subscribers and how the search engine recognizes which they are.
3. Optimizing Online Advertising - Currently most news organizations sell their online advertising in two different splits - premium space (through direct deals) and remnant space (through some sort of exchange or network). Google contends that they can do for news organizations what yield management systems did for the airlines by optimizing this process through a dynamic ad sales system that maximizes profits in real-time (claiming that it can increase revenues by 130%).

Overall, it is good to have reaffirmed that Google has an interest in a well-functioning professional news sector - the question that remains for me is how sufficiently news organizations are forced to unbundle content due to search and if so how the future of news looks when the funding for long-lead/investigative journalism is no longer easily subsidized by the more profitable components of a news paper's catalog (i.e. fashion)? To me the main problem with unbundling is that it allows the market determine what is newsworthy and unless organizations have the brand of the New York Times, the Wall Street Journal, etc... it becomes harder to justify the subsidization of some of the most essential components of news for a well functioning democracy (i.e. foreign correspondence, investigative journalism, sophisticated political coverage). This is perhaps precisely what Google wants to help avoid and perhaps why they are the perfect partner to help news organizations design their offerings of these essential components to help them find ways to force the market to incorporate their social and long-term benefits more accurately in the way they price them.