Big government and the media are taking aim at the free market liberties embodied in the internet and at the core of freedom of speech movements. Google News is being threatened by countries and media cooperatives to share their revenue stream or face censorship by the respective media of certain countries. What, you say, the media is advocating censorship of the media? Yes, “a group of 154 Brazilian news websites comprising 90% of the country's market share made a pact to jump out of Google News. The websites, which are part of Brazil's National Association of Newspapers (Associação Nacional do Jornais, or ANJ), had been negotiating with the search engine. They wanted it to pay a fee for linking to their content.” That startling piece of information was reported by The Atlantic.
The decision seems to be narrow-minded and counter-productive. Google News and other search engines direct traffic to digital content providers so it would appear that by censoring the largest search engine the Brazilian papers are negatively impacting their own revenue streams. Google policy director Marcel Leonardi certainly agrees, he compared Brazil’s ANJ's demands to a restaurant taxing a cab driver for taking tourists to eat there. Leonardi said, “Google News channels a billion clicks to news sites around the world.”
The Brazilians have argued that rather than help grow revenue Google actually reduces traffic and subsequent revenue. Carlos Fernando Lindenberg Neto. The president of Brazil's National Association of Newspapers, explained to The Guardian, "By providing the first few lines of our stories to internet users, the service reduces the chances that they will look at the entire story in our websites."
European news organizations have also taken aim at Google News, but they have chosen to try and use the government to force Google to share revenue. France, which has in the past contemplated leveling a tax on Google and recently considered investigating whether Google underpaid its corporate taxes, has been a leading proponent of charging Google for using its newspapers’ content. Reuters reported that French President Francois Hollande told Google's executive chairman Eric Schmidt that France would legislate to force the web search engine to pay for displaying links to news articles unless Google struck a deal with French media outlets. Italy and Germany have joined France and Brazil in trying to force Google to share its revenue. In Germany the legislature is trying to pass a measure that would force search engines to pay for links that include excerpts of content. And in Italy, Bloomberg Business Week reports that publishers are prepared to leave Google if the company refuses to share ad revenue.
The larger issue at play here is intellectual property law. Content aggregators like Google News and web search engines do not share the ad revenue at the broad end of the spectrum, i.e. first contact with the owners of the intellectual property, rather the content providers are expected to generate their revenue at the destination site i.e. home source of the content which is called the narrow end of the ad revenue spectrum.
News Corp was one of the first large media companies to express concern over Google’s business model which generates millions of dollars by freely utilizing the intellectual property of content providers. In 2009, Jonathan Miller, News Corp's chief digital officer, told The Telegraph that Rupert Murdoch, the owner of News Corp, was ready to block Google's access to his sites, which include The Wall Street Journal.
Downstream this issue has the possibility to mushroom into a full scale internet war, similar to that being played out in the record and movie industry. The Atlantic explained “media companies appear to have decided that while search may be mutually beneficial in a narrow sense, Google is getting so much more of the benefit that it doesn't make sense for them to hold up their part of the compact.”
Furthermore The Atlantic said, media companies that provide content to the main Google search engine could conceivably have a stake in getting paid for their links. “What would happen, say, if the New York Times wanted Google (or Google-owned company YouTube) to pay for links?”
Any collective action by media companies and governments could well impact PolicyMic and other blogging sites. Bloggers do not typically receive any share of the revenue generated for content platforms owners, however they accrue benefits by having their content published and distributed to a wider audience. But conceptually it is no different than what is being discussed with Google News. Furthermore might PolicyMic grow into a destination site that would want to charge for its content, similar to digital content provided by print media?
Media and industry experts believe that if they hold firm to their convictions and ban together they can force revenue concessions from Google. Bloomberg Business Week cited an Italian study that showed that readership would drop only 6%-7% if Italy barred Google from indexing its publishers. Brazilian news websites have only seen a 5% drop in traffic since the embargo, said The Atlantic.
Critics of the effort say it is short-sighted and self-destructive. The New York Times said the efforts run “counter to the trend toward greater liberalization.” Echoing the arguments against internet privacy laws, Jeremie Zimmerman, of the French internet liberty group, the Quadrature of the Net, described engaging in the dispute with Google as “idiotic” to Bloomberg. “It shows that the industry hasn't understood anything about the internet.”