They may think this sounds good on paper but if they kill publishers earnings then the writers just wont write any new or useful content anymore which will eventually lead to a negative experience on the internet.
In a way it almost looks like Google is moving away from search results.
Remember, when yahoo and msn could not provide good search results, people started using Google. Are we gonna see the trend that will lead to more bing users.
Also remember what happened to AOL. No one even thinks about using them anymore.
One fact for sure - The market will react if they screw up and it could lead to their downfall.