Google and Associated Press deal makes sense

Stan Beer
Sunday, 06 August 2006 07:46

Opinion and Analysis

The agreement between Google and Associated Press (AP) in which the search leader and online news aggregator will pay AP for its content has raised eyebrows in many quarters. Yet it is undeniable that the deal makes sense because of the unique way organisations like AP sell their product.

Google News, like other news aggregation sites, performs a very valuable service. It takes a regular snapshot of the most popular online news stories from around the world and posts links to the sites that carry the stories.

What you see on Google News is never more than a headline and a couple of lines of a story plus additional links to a wide selection of publications that carry their versions of the same story.

Stories from online news sites such as the New York Times, Washington Post and the BBC regularly feature prominently on Google News, as do stories from lesser known publications. None of these publications complain because Google News, in keeping with accepted international copyright laws, never publishes more than a snippet of a story and always drives traffic back to the original news source.

In the case of news wholesalers like AP, Agence France Presse (AFP) and Reuters, the situation is somewhat different. These organisations gather news from around the world through their infrastructure of people on location and they onsell the stories through licensing agreements with news retailers like New York Times and a bevvy of other online and print publications around the world.

Many of the stories that Google News links to at online publications are actually AP or AFP stories that have been licensed to those publications. Unlike the publications they license stories to, AP and the other wire services do not make their money from advertising. They make money from their license agreements.

Thus, AP and AFP are both in dispute with Google over the use of their stories in its aggregation service. It is hard to see the validity in these claims, given that Google appears to stay within fair use guidelines and always links back to the original source.

Google, indeed, has a valid argument that by driving traffic to sites that carry AP stories, it does in fact increase the value of those stories to the publishers by enabling them to reach a wider audience.

The wire services, however, which operate under a business model that stretches back to the 19th Century, don't see it that way. AFP is currently suing Google for US$17.5 million for essentially publishing links to its material. AP, however, has obviously struck a more conciliatory approach and the result is a license agreement with Google, which we are promised will result in a new Google product.

There is no doubt that the wire services perform an important and irreplaceable service. They put people on the ground to gather and report news from the source. However, these organisations need to recognise that we now live in the online information age and they will have to adjust their business models accordingly.