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Summary:

Everyone seems convinced that the Internet owes them a living, and that Google (being synonymous with the Internet the way it is for so many) is the best one to settle the bill, especially since it has billions of dollars just lying around, like Scrooge McDuck. Let’s call this the “Google as sugar daddy” argument. But why should Google pay? Especially when the main argument as to why it should seems to be because it can?

d1117sugar-daddy-postersVariations on the “Google should pay me for X” theme have been around for some time now, and the precipitous decline of content-related industries — among them book publishing, newspaper printing and music distribution, to name just a few — has only accelerated the number and frequency of these complaints. Everyone from the World Association of Newspapers to the American Authors Association seems convinced that the Internet owes them a living, and that Google (being synonymous with the Internet the way it is for so many) is the best one to settle the bill, especially since it has billions of dollars just lying around, like Scrooge McDuck. Let’s call this the “Google as sugar daddy” argument.

But why should Google pay? The main reason seems to be: Because it can. Any additional rationale comes off as an afterthought, and one that in most cases, doesn’t hold water.

The latest addition to this sad pantheon is an opinion piece by Peter Osnos, a former journalist turned book publisher who writes for an outfit called the Century Foundation. He has posted on The Daily Beast a shorter version of a piece he wrote for the Century Foundation. The most recent one is called “Will Google Save The News?” but the earlier piece is much more blunt, entitled simply “Make Google Pay.” Osnos’s argument seems to be: Google paid book publishers for the right to scan their books, therefore Google should pay newspapers as well, since their content is used without their permission in Google News. Presto! Industry rescued. As he puts it:

“The major point is that Google has now conceded, with a very large payment, that information is not free. This leads to an obvious, critical question: Why aren’t newspapers and news magazines demanding payment for use of their stories on Google and other search engines? Why are they not getting a significant slice of the advertising revenues generated by use of their stories via Google?”

This argument is so full of holes that it’s difficult to know where to begin.

Let’s take one of the most obvious points: Google News doesn’t carry advertising, so there are no “advertising revenues generated by use of their stories” for the news industry to get “a significant slice” of (there is referral revenue, but that’s a step removed, and requires a different argument). Obvious point #2: Books are not newspapers. Google was (and is) scanning hard copies of books and adding them into its index of data, which publishers say amounts to copyright infringement. The only way this would be comparable to what Google is doing with newspapers is if Google was buying copies of every newspaper and scanning all the stories manually. Stories show up in Google News because newspapers make their content freely available — if they did not, then it wouldn’t be indexed. Don’t want Google to have it? Don’t publish it online, or use simple tools (like robots.txt) to block the Google bot from indexing it.

Obvious point #3 (although this could easily be a candidate for obvious point #1): Google is indexing entire books, but only small fragments of news stories appear in Google News. Why should Google pay newspapers for the use of a headline and a few sentences from their stories? Even if you assume that newspapers aren’t getting a flood of traffic from Google (which they are), and even if you ignore the fact that this kind of use is a prime candidate for exclusion under the “fair use” clause in U.S. copyright law (which it almost certainly is), asking for payment makes no sense whatsoever. If you follow the logic of Osnos and his fellow Google-hounds, then I should be able to sue Google and be compensated for having my blog indexed in its search results.

This is absurd, of course — as is Peter Osnos’s argument (former journalist Mark Potts makes some good points on his blog as well, calling Osnos’s theory “sheer idiocy”). The real reason that Osnos thinks Google should pay is simple: Newspapers are desperate for funds, and Google has boatloads of money. But that doesn’t mean his thesis has any actual merit. The reality is that newspapers should be thinking of ways (and many are) to profit from the traffic that Google and other web sites and social networks send them, not obsessing over how to get the search giant to cough up some of its cash.

  1. Mathew,

    I think Potts’ number (20 – 30%) for traffic from Google is “at least”. On a website that is properly SEO and has deep archives that number more than doubled, as it was on the community newspaper website that I developed.

    Osnos doesn’t understand what news companies sell. I know I’ve been saying this a lot lately, but it bears repeating. It’s not newspapers, its not news, its not content, and its not information. It’s readership. Why these guys continue to miss this fact boggles my mind.

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  2. How much did Google pay you to write that?

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  3. Right on target!

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  4. [...] the rest of this post at GigaOm) [...]

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  5. Your analysis is just brilliant..

    These people should wake up, smell the coffee, and realize that the market they thought they knew, has changed completely. If they don’t / can’t see that, well, that’s their own problem, NOT Google’s…

    http://the-anti-google-baloney.blogspot.com/2009/02/i-wont-pay-i-wont-pay-ya-no-way-now-now.html

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  6. It’s past time for Google to agree to the offered deal, to stop crawling selected news sites.

    One of two things will happen.
    (1) Those sites will find that they don’t need Google traffic.
    (2) Those sites will find that they need Google more than Google needs them.

    If (2), Google has another revenue opportunity, namely charging them for popularizing their content.

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  7. Well if I would run a news organization I would change the business model.
    Cut a deal with Microsoft or Yahoo or what ever and publish my content only under that brand.
    No links, internally all ads and page views are tracked by my publisher. Revenue from a click through is shared between search (most likely) and review articles to just brand advertising on site.
    Let Google handle the long tail, and let’s see how much money they make from it.
    Nobody ever said we have to use the Web as is. Eliminate the published links, just create them autonomous internally and let’s see how good Google’s engineering really is.
    To bad news publishers have no idea what can be done with technology or how to use it. And how to use it to change the business model from “search click through” to “shared for research and branding”.

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  8. Can you be more biased towards Google?

    I wonder what would happen if every newspaper blocked their site from the Google crawler.

    Google may not have ads on their news page but by offering an aggregated news service, they want you to use their search, etc which does have ads. So they do indirectly benefit from someone else’s content.

    I’m not saying Google should pay the papers but they are not all that innocent either. They can’t always hide behind the veil of “Do no evil”.

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  9. Totally agree, Tim.

    And David, I’m not biased towards Google at all — if anything, I’m biased towards the *Internet.* What difference does it make whether it’s Google aggregating some news headlines and links or the guy down the street who puts together his own news page? By Osnos’s logic, they should both pay because they are re-using newspaper content.

    But ignoring for a second the principle of fair use, if using a headline and a couple of sentences from a newspaper story extracts all the value that story has, then your paper has much bigger problems than getting money out of Google.

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  10. An analogy to the relationship between management and workers in the general economy: Without a union (collusion among newspapers), labor (individual publications that do the work of the web) has no bargaining power against management (search engines that direct attention).

    Therefore change the anti-trust laws so that newspapers (labor) can collude (create a union) to force search engines (management) to pay for the privilege of indexing their intellectual property (work product).

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