Google knows what's best for newspapers?

July 21, 2010: 11:06 AM ET

In a letter to the FTC, Google challenged the findings of a study on journalism.

On its public policy blog last night, Google laid out arguments against the Staff Discussion Draft of Potential Policy Recommendations To Support The Reinvention Of Journalism which studied how journalism, particularly in the newspaper profession, had been affected by the move to electronic readership over the past decade, and into the future.

The basis of the government's argument:

  • Studies have shown that newspapers typically provide the largest quantity of original news to consumers over any given period of time.
  • 80% of traditional newspaper revenue comes from advertising and 20% from subscription
  • Newspapers' revenues from advertising have fallen approximately 45% since 2000. Classified advertising accounted for $19.6 billion in revenue for newspapers in 2000, $10.2 billion in 2008, and is estimated to be only $6.0 billion in 2009.

So the question is, how do you fill that revenue void?  There are a laundry list of proposals including taxes on broadband, grants to universities and subsidies for mail delivery.  One particular part got Google's goat, however.

They specifically called out the 'Hot News' protection risk in the Blog post.  Here's a snippet from the Potential Policy Recommendations to Support the Reinvention Of Journalism document:

Some stakeholders have proposed amending the Copyright Act to specifically recognize hot news protection. Advocates argue "the copyright act allows parasitic aggregators to 'free ride' on others' substantial journalistic investments,"  by protecting only expression and not the underlying facts, which are often gathered at great expense. They define parasitic aggregators as those that, without permission, post enough material to render the original news stories redundant. This free-riding undercuts revenue for those who make investments in journalism and undermines their incentive to do so, according to advocates. They suggest that federal hot news legislation could help address revenue problems facing newspapers by preventing this free-riding.

Sounds a little bit like Google News, eh?  Google (GOOG) says:

But we strongly disagree with a number of policy recommendations set forth in the Staff Discussion Draft, such as the suggestion that Congress enact a federal hot news doctrine -- something that would not only hurt free expression, but also the very profession of journalism that the proponents of hot news say they support.

Legislation like this wouldn't just hurt (or kill?) Google News, it would also curtail a lot of aggregation sites, many of which use Google's Adsense to generate revenue.

The draft is just a working document and is a long way from becoming legislation, but you can bet Google is keeping a close eye on this.

Below, I've embedded Google's Comments to FTC 20 July 2010:

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About This Author
Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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