As If Google Didn’t Have Enough Problems with Taxes Taking A Big Bite Out Of Profits That Caused Its Shares Drop By 12% in One Day, and Criticism For Its Censorship Policies Appeasing the Chinese, Now It has Europeans Publishers Mad That The Search Engine Uses Their News Without Payment

Philip M. Stone February 2, 2006

Google shares got nailed this week, initially a 12% drop knocking some $20 billion off its market cap although it recovered a bit from there, because fourth quarter earnings, while very good, got hit by high taxes and Wall street didn’t like that. It’s had a tough PR week, too, not showing up at a Congressional hearing into censorship policies agreed by American companies doing business in China, and then European publishers warned they are asking the EU Commission to take a look at why the search engine doesn’t pay for the news its robots scan and sort into various categories on the Google news site.

It was that same objection – no payment for the news listed on the site – that saw Agence France Presse sue Google in the US, seeking some $17.5 million. That case in federal court is still pending, but in the meantime Google stopped posting AFP news. In comparison, AFP news and photos appear on Yahoo because that search engine pays for the privilege.

But now the Paris-based World Association of Newspapers has agreed to lead a task force to examine how publishers can gain fair compensation when search engines pick up their material.

“The search engines are increasingly aiming their strategic efforts at traditional content originators like newspaper publishers,” according to Gavin O’Reilly WAN President who leads the task force. “The irony is that these search engines exist, largely, because of the traditional news and content aggregators and profit at their expense,” he said.

He compared what Google does today with how people used to download music from Napster without paying any royalties.

In addition to WAN the task force includes the World Editors Forum, the International Publishers Association, the International Federation of the Periodical Press the European Newspaper Publishers Association, the European Publisher’s Council, the European Magazine Publishers Association, the French Association for Magazine Publishers, AFP, the Association of French national newspapers and the French Regional Daily Newspaper Association.

The group has not ruled out legal action, and with AFP as part of its task force, it has instant knowledge to call upon if it decides to go down that route.

As their first ports of call, the group wants to me with Charlie McCreevy, European Commissioner for the Internal Market and Services, and Ms. Viviane Reding, the commissioner for Information Society and Media.

For all of its activities, news is actually one of Google’s less successful, currently holding 13th place among the Internet’s most popular news sites. Yahoo led with 24.6 million unique visitors in December, up 15% from a year earlier whereas Google lagged far behind with 7.8 million unique visitors although that figure was up 22% from a year ago.

The task force is formed some two months after Francisco Pinto Balsemao, head of the European Publishers Council, told a Brussels conference, “ It is fascinating to see how these (search engine) companies ‘help themselves’ to copyright protected material, build up their own business models around what they have collected, and, parasitically, earn advertising revenues off the back of other people’s content.”

It’s an interesting statement except that Google News does not display any ads. Google takes the position that it is not reproducing other people’s content, but rather it points people to where they can find that information on the web.

Google maintains that if a web site wishes not to have its information crawled by its robots that it can so request. AFP said it had made several requests to remove its material from Google News but it wasn’t until the lawsuit that Google complied.

Google’s news service, started in 2002, currently scans some 4,500 news outlets, sorts stories by categories and usually lists the first sentence or two and the source. Clicking on the headline takes the reader directly to the story’s original site. It is all done automatically, no human hands involved, and no money to the source.

Yahoo, on the other hand, has human editors, and also pays some news suppliers, particularly the international news agencies.

There is, of course, a train of thought that runs on the web, that if you are publishing on the web then by the web’s very nature you should expect your stories and material to move around the Intenet. It’s the nature of the beast! If you don’t like that, then don’t put your material on the Internet in the first place.

Not a thought that the task force is likely to endorse.

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