• by Laurie Sullivan , Staff Writer @lauriesullivan, April 13, 2010

When Google CEO Eric Schmidt addressed the American Society of News Editors on Sunday, he told the crowd the industry had a business model problem, not a news problem, according to reports.

So what's the next step in finding alternatives to generate revenue? We all know Android, mobile phones, Web sites, publishers, and advertising integrate well with video games. This, of course is all hypothesis. We're not in Schmidt's head.

Setting the stage, I'll tell you about one publisher, Philly.com, the online unit of the Philadelphia Inquirer and the Philadelphia Daily News, that launched a legal online betting service called Instant Fantasy Games. But I'm not so sure Schmidt had a legal gambling business model in mind.

Think more along the lines of online video games supported by AdSense on publisher Web sites, in social networks like Facebook, and on mobile devices, such as phones and Google's tablet. Clix Marketing Founder David Szetela says Google might want to evangelize developers to create games for the Android operating system (OS).

On Monday, Google named Mark DeLoura "Developer Advocate" for games, as the company continues to expand into game-related areas. A well-known name in the video game industry, DeLoura's LinkedIn profile lists experience as vice president of technology at publisher GreenScreen Interactive, technical director at Ubisoft San Francisco and manager of developer relations at Sony Computer Entertainment America. He also worked as lead engineer at Nintendo of America.

Between the iPhone OS and Android, the world should expect to see Apple and Google continue to duke it out in the mobile marketplace. "The key to success will become encouraging developers to innovate on their platforms," says Aaron Goldman, managing partner at Connectual. "Apple has more than 150,000 apps that developers have built on its platform. Android has something like 20,000. I'm not sure hiring one 'advocate' can close the gap but it certainly signals Google's commitment to the developer community."

Some folks like SEO-Shop.com's Steve Gerencser, who published a gaming magazine in the 1990s, believe Google is missing out on a massive market with social gaming revenue going through the roof. "I'm surprised they've waited this long to throw their hat in the game biz," he says. "Games have always been sort of niche marketing and revenue, but with free and micro payments in games on sites like Facebook, suddenly huge opportunities for in-game advertising are opening up."

SeoPros Founder Terry Van Horne sees APIs as a possible connection point for third-party developers. Google seems to rely on search API for shopping, maps and more. He points to JSON and JQuery APIs written by Googlers. He says the APIs are "very cool" for interactive Web pages.

Google Modules allow people to add gadgets to Web pages. The APIs do most of the heavy lifting so complicated programs become very easy. Van Horne tells me that Google may see an opportunity for supporting gaming sites with HTML 5.

Nearly one year ago, Rowan Wilson explained how HTML 5 would allow page authors to reference and embed video games on Web site pages without requiring publishers to have a specific browser plug-in installed. At the time, Adobe's Flash and Apple's Quicktime were the most popular methods for getting content into Web page -- which irked many purists who believe requirements to install these plug-ns undermined the goal of a truly open-standards Web site.

Perhaps Google hiring someone specifically to focus on games sends a signal to developers and publishers that the Mountain View, Calif. company recognizes the growing importance of games as a medium and advertising tool.