Newspapers want Google News' quarter

Google is supposed to make it easier for newspaper readers to find content online. But some in the industry are questioning whether it makes business sense to allow Google to use their material for free.

"If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?" Sam Zell, the new owner of the Tribune Company, asked reporters during a speech at Stanford University last month. The Tribune Company operates the Los Angeles Times and Chicago Tribune.

Zell didn't wait for the reporters to reply, according to The Washington Post. "Not very," he said.

At a time when anyone with a blog can compete against vast media empires for readership, newspapers may be taking a harder look at their relationship with search engines and sites that aggregate headlines. The question some analysts are asking of media companies is: what's taken so long?

"Newspapers are trying to find their way to understanding and addressing the value of linking," said Aly Colon, an instructor at The Poynter Institute, a school for journalists. "The search engines are supposed to be sending traffic to newspapers. But on the other hand (journalism) is hard work...There is going to be some sort of attempt by newspapers to figure out how they can be fully compensated for their work."

Google's position about paying newspapers to index headlines has never wavered. "We don't pay to index news content," said a Google spokesman in an e-mail.

The spokesman was responding to last weekend's report in Scotland's Sunday Herald that Google was in talks with British newspapers to obtain the rights to use their stories. Google flatly denied the story.

"We have not changed our approach to Google News," the company said in a statement about the Herald's story. "We believe Google News is legal. We index the content of thousands of news sources online. When users go to Google News, they see only headlines, snippets and image thumbnails from the relevant news articles. If people want to read the story, they must click through links in our results to the original Web site."

But not everyone agrees Google News is legal. A Belgium court ruled against Google last year after a newspaper association there sued the search engine. The newspaper group asserted that by offering snippets and headlines from their publications, Google violated copyright law.

Google immediately stopped indexing stories belonging to the association's members. This month, however, links to the Belgium newspapers reappeared. Google and the newspapers said they settled their differences on some issues and were trying to resolve others. Last month, Paris-based news agency Agence France-Presse reached a licensing agreement to settle its copyright lawsuit against Google that allows Google to post AFP content, including news stories and photographs, on Google News, as well as on other Google services.

Last August, Google announced an agreement with the Associated Press that allows it to use AP news and photos, but not in Google News. The content will be part of an undisclosed service under development.

While some in newspaper circles point to the Belgium court ruling and the content deals with AP and AFP as a sign Google may be willing to pay for content, Google fans and bloggers interpreted the news quite differently. To them, it was obvious that the Belgium group had agreed to settle--even after winning its court case--because they discovered that they needed Google's traffic more than the fees that could be generated from news snippets.

Observers note that with newspapers receiving about 25 percent of their traffic from search engines, losing Google's traffic had to sting.

In business stories, newspapers are often lumped in with industries supposedly being bulldozed into extinction by the Internet. Readership across the board is falling fast and advertisers continue to migrate to the Web. The big newspaper companies, which typically enjoyed monopoly-like domination in their communities' advertising sector, are now scrambling to find new business models. Newsrooms continue to shrink.

More bad news came last week when the San Francisco Chronicle announced it was laying off 100 out of 400 editorial staff workers. Yet, even in a climate like this, newspapers should look for ways to boost revenue other than taking on Google, said Barry Parr, an analyst with JupiterResearch.

"They should be looking for the broadest distribution means possible," Parr said. "If you look at the penetration rate of newspaper Web sites, it's not all that high."

What would happen if newspapers went the other way and demanded that Google compensate them for using their stories?

Parr predicted newspapers would take a thrashing. In such a scenario, Parr said, Google would refuse to pay and stop indexing their headlines. It may not even be worth it for Google to fight it out in court. "Google isn't exactly raking in the bucks on Google News," Parr said. "There's no advertising on it."

Meanwhile, said Parr, newspapers would lose readers. Competitors would likely rush in to fill the void.

"(Newspapers) wouldn't be missed," Parr said. "Some people who used to go to The New York Times will find something else to do. They have to realize that the choice isn't between the Times and The Washington Post anymore. The choice is between the Times or watching YouTube. Newspapers are competing with a wide array of media."