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April 8, 2009
Google Insists It’s a Friend to Newspapers
By MIGUEL HELFT
SAN DIEGO — It had the makings of a high-tension face-off: Eric E. Schmidt, Google’s chief executive, spoke Tuesday at a convention of newspaper executives at a time when a growing chorus in the struggling industry is accusing Google of succeeding, in part, at their expense.
Any open controversy reverberated little more than a soggy newspaper hitting a doorstep. Mr. Schmidt’s speech closing the annual meeting of the Newspaper Association of America here was a lengthy discourse on the importance of newspapers and the challenges and opportunities brought about by technologies like mobile phones.
His speech was followed by polite questions from industry executives that only briefly touched upon a perennially sore point: whether the use of headlines and snippets of newspaper stories on Google News is “fair use” under copyright law or a misappropriation of newspaper content.
“I was surprised that the publishers really let Google off the hook,” said Jim Chisholm, a consultant with iMedia Advisory, which advises newspaper companies around the world. “While Google News generates a lot of audience, ultimately, the question is going to be who is going to make the money out of that: Google or the publishers.”
On Monday, The Associated Press said that it would work to require Web sites that use the work of news organizations, including The Associated Press and its member newspapers, to obtain permission and share revenue with them.
“The ultimate resolution of all is this will be determined by how you interpret fair use,” Mr. Schmidt said of the broader debate around Google News. But Mr. Schmidt said that he was “a little confused” by news reports that singled out Google as a target of The A.P. effort. He noted that Google currently licensed and hosted news stories from The A.P. He did not directly address newspaper content, which the company does not license.
Google has long insisted that its use of snippets and headlines in Google News is legal. It also said Google News drove a huge amount of traffic to newspaper Web sites, which the publishers monetize through advertising.
Newspaper publishers do not want to cut off the traffic they get from Google’s search and news services and from other search engines. It is technologically simple for any newspaper Web site to keep content off Google and Google News, but few if any newspapers have chosen to do that.
Publishers do resent that the company, which recently began showing ads on Google News, is profiting from their content.
The A.P. has not given details about exactly how it plans to tackle the issue. Just before Mr. Schmidt’s speech, William Dean Singleton, chairman of The A.P. and chief executive of the MediaNews Group, said: “We don’t plan for anyone to use our content unless they pay for it. The licenses we do in the future will limit how and where our content is used.”
Mr. Singleton said that executives at The A.P. would offer recommendations on how to proceed in the coming weeks. Newspaper companies have been unwilling to test the issue in court, where Google’s fair-use arguments could prevail, and it is not clear that The A.P. plans to do so.
Mr. Singleton said he expected some of MediaNews’s newspapers, which include The San Jose Mercury News and The Denver Post, would come up with a way to charge for some of their content by midyear, a model that a growing number of publishers are considering.
“It’s a balancing act,” he said. “We’d like to have a pay wall but we like the traffic we get from search engines.”
In his speech, Mr. Schmidt encouraged publishers to create more personalized news products that could be delivered effectively on the Web, cellphones and other devices. “We think we can build a business — again, with you guys — with significant advertising resources, where the advertising is targeted to the content,” he said. He acknowledged that many publishers were increasingly thinking about charging for their content, and said he expected the newspaper industry to eventually resemble television, where some content was free, some was purchased by subscription and some was paid for every time it was viewed. But he said he expected that advertising would remain the leading revenue model in online media.
In a meeting with reporters afterward, Mr. Schmidt said Google was unlikely to license newspaper content, as it has done with The A.P., even if that content was behind a pay wall.
“In a scenario where a newspaper had a subscription product, what would Google do?” he asked. “It’s highly unlikely that we would buy a subscription and give the content away free. We might be able to help the distribution of that content, but the user would have to pay.”