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Google's media war

Source : BUSINESS_STANDARD
Last Updated: Sat, Nov 10, 2012 04:11 hrs
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They say you should never take on people who spill ink by the barrel, but your odds are better when you traffic in terabytes of data. In the US, Google and big media went at it for several years over Google News and Google won, taking its argument for a free and open Internet all the way to the bank.

It's a little counterintuitive, but large newspapers believed that Google was hurting them by generating a page of links - with headlines and a short summary - to articles that the newspapers had paid to create.

American publishers eventually decided that the only thing worse than being aggregated by Google News was not being aggregated at all, but the fight has been joined anew in other countries by publishers who argue that the search company is picking their pockets every time it links to articles.

There's a large boycott under way in Brazil, punishing legislation is gaining momentum in Germany, and there is talk of a similar effort in France.

You wouldn't know it by speaking to Eric Schmidt, Google's executive chairman. He takes the challenges to Google News seriously - he just returned from talks with President Francois Hollande of France - but he sounded sanguine on a phone call from Chicago. "We had some good discussions, and I would expect that we will reach some kind of agreement by the end of the year," he says.

Don't expect that agreement to acknowledge the principle of so-called ancillary copyright, which has been pushed in Germany and elsewhere. It suggests that Google and others should pay for featuring headlines and the first few lines of an article, while Google asserts that this constitutes fair use.

In France and Germany, publishers have found willing partners in their governments as they try to put the squeeze on Google. It probably won't work no matter who is doing the squeezing, because while the rhetoric from Google is always friendly, its position is always firm. Schmidt says. "We don't want to pay for content that we do not host. We are very clear on that."

Back in this hemisphere, more than 150 newspapers in Brazil decided in 2011 to pull themselves out of Google News. The debate blew up again at a conference in Brazil last month in which representatives from Google and the country's newspapers had a heated argument over just how fair "fair use" is. Again, Schmidt was hardly frantic about it."That's a fine choice," he says. "Publishers are free to do as they wish, and there is plenty of competition for news in that country, so we are not overly concerned."

There are a few reasons Google remains calm amid a storm of pushback. According to Google, its search engine delivers four billion clicks a month to news media outlets, one billion of which come from Google News. That's a lot of leverage. Publishers elsewhere have monitored the woes of American newspapers with a lot of interest. German and Brazilian publishers are in good shape - French newspapers less so - and they still have a hold on their customers and their business models. They'd like to keep it that way.

"German publishers watched the decline in American publishing and they are trying to fortify their lines while they can," says Wolfgang Blau, editor in chief of Zeit Online in Germany, saying that legacy publishers would rather change the subject than their business model.

Other jurisdictions also have flexibility that American publications don't. If all the publishers in the US banded together to block Google, as in Brazil, they would be in court. And while Washington faced a Web-enabled protest when it tried to assist the entertainment industry with antipiracy legislation, German and French publishers have a much closer - some would say symbiotic - relationship with the government.

The pushback against Google is strong because the stakes are high. English-language sites like The Financial Times, The Guardian and The New York Times can generate global audiences and perhaps end up thriving in a digital era. But news rendered in Portuguese, French and German has a far more limited horizon.

Schmidt called that "a very separate issue" and says Google was in "full compliance with the letter and spirit of the law. We are doing very well in terms of market share, but that doesn't mean that we are doing anything wrong." He adds, "Newspapers have a very real problem and we care about what happens to them. But they need to monetise the clicks we send in way that ensures their future."

For a company in the middle of a many-front war, Google is confident. It is a very large chunk of the Web, one that users have come to believe will provide friction-free access to much of the information on the planet. Because of its size, Google has become a convenient pinata, but hitting it with sticks probably won't yield a mother lode of shared revenue. In the end, it doesn't matter what the publishers and their allies in government think is the right thing to do.


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