I'm a small-town newspaper editor. I'm feeling the pain, though not nearly as bad as most papers are. We're independent, so we actually have to run as a business and not as an overleveraged financial con game, the way so many large news chains are these days. This turns out to mean that we weather the storm far better than the big guys.
The Associated Press' recent saber-rattling in Google's direction is, I believe, nothing more than some moguls' desperate attempt to wring some cash out of some successful Internet companies on their way out the door. The fact is that there was always a five-minute remedy to the supposed wrongs done to them -- robots.txt -- will probably devastate their case. But who knows? Maybe they figure they can get some go-away money. The legal system doesn't always go the way you might expect it to.
That said, Schmidt's idea that newspapers should live in fear of "pissing off" readers is fatuous and lame, and exactly wrong. Sure, this should be the case when it comes to usability -- by all means, get the info in front of eyeballs any way you can, and with the absolute minimum amount of pain on the user's end. That should be everyone's goal.
But then there's content, and here it is absolutely essential to risk pissing off your readers with every issue. The news people need to hear -- the news that it's important for them to hear -- is bad news. The fact that you print bad news is going to inevitably piss people off. Maybe a lot of people. You want news that pisses no one off? You're asking for a Chamber of Commerce newsletter, not a newspaper. And look how well read those are.
FORTUNE'S FUN FACTS TO KNOW AND TELL: A cucumber is not a vegetable but a fruit.