ON NEWSPAPERS NOW WANTING GOOGLE TO PAY

LET'S BE PRACTICAL HERE

Well, a third industry is getting in line after telcos and book publishers wanting Google (and other search companies) to cut themselves in on a piece of the business model action around online paid-search adverting.  As CNET reports:

"Web search engines, such as Google and Yahoo, collect headlines and photos for their users without compensating the publishers a cent, according to the World Association of Newspapers (WAN), which announced Tuesday that it intends to "challenge the exploitation of content" by the Googles and MSNs of the Web.

The Paris-based group, which represents 18,000 newspapers, isn't discussing what action it may take."

In the process, these folks are biting the hand that feeds them lots and lots of traffic, as Paidsearch.org rightly points out.  To put it another way, while the industry may be shooting themselves in the foot, they hope they only shoot off the littlest toe and save the legs underneath their industry.

The righteous and indignant reaction to this story on various blogs via memeorandum has been predictable.  Some comments by Techdirt are indicative of the typical reaction:

Techdirt:

"Could Newspaper Owners Really Be This Clueless?"

And that was just the title...other quotes from the post:

"they're all jealous of Google's ability to make money..."

"The main problem here is that it appears most newspapers don't know what business they're in..."

"Google still hasn't monetized Google News. In other words, they're not making any money directly off of this, and yet the newspapers are still upset..."

And TheStalwart chimes in:

"But really, this just looks like a dumb move."

While the newspaper industry, along with other industries (e.g. ATT's Whitacre), may indeed be jealous of Google's business model, I do think these companies know what business they're in, and really don't care of Google News has ads or not.

That's not the point. 

The point of this announcement, including any legal action that may follow (a la the Book Publishers), are SIMPLY A NEGOTIATING TACTIC.  And that's NOT a dumb move, but a pragmatic and necessary one from THEIR POINT OF VIEW, even if us geeks and users of these services may not agree.

There's no question that paid-search is a great business model.  And as myself and others have discussed in the past, the question is how the spoils are shared between the various constituents, including possibly the mainstream consumers themselves (see "Payment for Peer Production" post).

While this industry like the others may not have as much negotiating leverage as they'd like, they still have to try and negotiate a different, better, or least less damaging deal than the one they have now.  And that of course is nothing...their content is theirs for the indexing.

As consumers and users, it's a painful and frustrating process to watch, especially since it fosters less convenience, higher costs, and general retardation of technology-driven progress for mainstream audiences. 

The New York Times' TimesSelect initiative is a case in point that I and others like Fred Wilson have railed against in the past.  But it's part of the business evolutionary process.

As Michael Corleone said to his brother,

"It's not personal Sonny, it's strictly Business."

Yes, I know you know Michael Corleone, and the newspaper industry is no Michael Corleone.  But they have to try nevertheless to keep their business a business.

Comments

[Mike Masnick]

Bullshit. :)

I agree that it's a negotiating tactic, but it's a stupid one. It's a negotiating tactic guaranteed to limit the overall size of their market. They shouldn't be negotiating. Google is a GIFT to them, and they should embrace it and look for ways to get more out of the traffic it sends them. Trying to get Google to pay them is a guaranteed way to kill the golden goose. It's this simple: Google just needs to call their bluff and remove them from the index. Google News won't suffer much, but those newspapers will.

The leverage is entirely with Google, and as such, this "negotiating ploy" is a stupid one. It doesn't help them and can only hurt them.

[Simon]

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

-Robert A Henlein

[Mathew Ingram]

Michael:

I would have to agree with Mike Masnick (and Robert Heinlein for that matter) on this one. as I said in a comment over at Woodrow's blog, I don't disagree that this is a negotiating tactic -- I just disagree that it makes any sense.

Your point (and Michael's) about sharing the proceeds of paid-search is a good one, but it doesn't apply to the WNA case because they're talking about Google News and Yahoo News, and there are no ads associated with either of those products.

A search service such as Google News indexes your information and then leads people to it. What you do with them when they get to your site (assuming they come) is up to you. Newspapers are not a "constituent in paid search" to use Michael's phrase. They don't have a leg to stand on. And they risk cutting off their noses to spite their face.

[Mathew Ingram]

Sorry about the previous comment -- I cut and pasted some of my comment from over at Woodrow's blog, so the references to Michael (not Mike Masnick) are probably confusing. If you could remove them I'd appreciate it, so I don't look quite as much like a moron :-)