Does Google hold the key to the future of journalism?

Why does the world’s smartest company act dumb when asked tricky questions?

Try asking Google executives about its emerging monopoly in search. Typically, the conversation grinds to a halt with this stock phrase: ‘It’s our intention to continue developing software that delights users.”

Ask about copyright, and you get another templated response. ‘We believe that the producers of content should be rewarded fairly.”

Google’s rapidly expanding army of publicists hammers out these messages on a near-daily basis, drawing a discreet veil over Google’s increasingly complex relationship with the news industry.

This complexity increased noticeably last month when Google announced big changes to Google News, the aggregation service that has lived a low-profile existence since its beta launch five years ago.

In the most dramatic development, Google reached agreement with the Press Association, Associated Press, Canadian Press and Agence France-Presse on the way it uses their headlines and abstracts in Google News. In some cases, Google will now host the agencies’ stories on its own servers.

Google also announced plans to purge the duplicate wire stories published by online news sites and offer a right of reply to the subjects of indexed stories.

From a broader perspective, Google’s deals are part of an inexorable process in which the company is being drawn into commercial relationships with the content producers whose work it indexes.

The process has been messy and aggressive. In the US, for example, Associated Press brought Google to the negotiating table by launching a lawsuit. In Europe, it was AFP which took Google to court. Both cases have now been dropped.

In such cases, Google’s legal tactics are precisely calibrated. In the words of Michael Kwun, one of the 100-plus lawyers the company employs, Google’s aim is to ‘litigate to the point where we get rulings on the issues that matter to us”.

Google tries to do this without giving away information about its proprietary techniques. Many of its lawsuits are settled on the steps of court after a lengthy pre-trial conflict.

One of Google’s key objectives has been to promote the company’s US-centric view of copyright in Europe, where notions of ‘fair use’are more heavily weighted in publishers’ favour than in the US.

In particular, Google’s caching of third-party web pages and its use of headlines and copy snippets are far more vulnerable to legal attack.

In Belgium, the newspaper industry association Copiepresse recently won a court ruling defining Google’s US-style approach to fair use as illegal.

Almost certainly, the Copiepresse ruling played a big part in persuading Google to cut deals with the agencies.

One obvious question is whether anyone else can force the company to pay for content.

In copyright terms, it’s hard to see the difference between a news agency and, say, The Guardian or The Times.

But in practical terms, further deals will become a realistic option only if Google decides to sell advertising on the back of Google News.

By selling ads on Google News, and then routing readers direct to specific story pages on news sites, Google would theoretically deprive news organisations of the premium ad revenues they could charge for running ads on their own home pages.

Predictably, however, Google has served notice that it won’t be a pushover.

If other news organisations make demands, Google will argue that it provides a unique service for news agencies by hosting their stories on its own servers. (Handily, this also allows the agencies to deny that they are competing directly with their customers for ad revenues.)

The accompanying moves to credit original sources and strip out duplicate wire stories from Google News should also be seen in this context.

These measures are a direct challenge to news organisations that rely on agency copy. If Google thinks – quite plausibly – that their regurgitated agency stories aren’t viable for readers, it certainly isn’t going to pay money to sell ads against them.

The reality is that Google is a quoted US corporation valued at £80bn. Its shareholders have forked out a lot of cash to buy its stock. And they have big expectations.

Among them is the hope that Google will continue to find new ways of siphoning off revenues from the cosy ecosystem inhabited by content producers and ad agencies.

Paying fees to dozens or possibly hundreds of news organisations around the world was never part of the game plan. It still isn’t.

It’s also true the nationals have some good reasons for holding back from a major conflict.

At the moment, building big audiences as rapidly as possible is their primary objective. Alienating Google might not be in their best interests.

Meanwhile, Google News contributes a small fraction of the traffic arriving at most mainstream news sites. In most cases, it’s a low, single-digit, percentage proportion of in-bound traffic. A lengthy conflict isn’t worth the effort – yet.

The politics of this conflict are further complicated because, within the next year or two, Google’s monopoly grip on the search advertising market could force an incoming Democratic administration in the US to consider a Microsoft-style anti-trust investigation of the company. In Europe, the EU’s trust-busters are already sniffing around Google.

Such investigations only ever weaken the target company. From this perspective, Britain’s nationals might be well-advised to keep their powder dry.

In the meantime, the precise terms of Google’s deals with the news agencies will continue to be a source of fascination. How much has Google agreed to pay for agency copy?

Knowing the answer to this question could tell us a lot about the future of journalism.

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