What’s a Fair Share In the Age of Google?

How to think about news in the link economy
July 23, 2009

The buzz inside Google is overwhelmingly positive about what the company does and how we will all benefit from the results—including the embattled denizens of newspapers and magazines who increasingly see Google as an enabler of their demise. Barely a decade ago, Google received its first $25 million investment, based on search technology developed by Sergey Brin and Larry Page, the company’s cofounders. By the time it went public just five years later, “Google” was a verb. Today it is the dominant force in what has turned out to be the central organizing principle of the Internet’s impact on our lives: the search function and the accompanying links, keywords, and advertising that make sense and commerce out of the vast universe of information and entertainment on the Web. Google is as important today as were Microsoft, IBM, and the original AT&T, linchpins of our culture and economy, in the development of modern computation and communications.

By contrast, the great twentieth-century print companies, such as Time Inc., Tribune, and The New York Times Company, are in a battle for survival, or at least reinvention, against considerable odds. Google has become a kind of metaphor for the link economy and the Internet’s immense power to organize content. Yet as the global leader among Web-based enterprises, it has also become a subject of debate and controversy, even though its sense of itself is still as benign as the playful tenor of its Manhatttan offices, where the fittings include scooters for zipping around the halls and a lavish free cafeteria.

At lunch there, I was surrounded by an animated crowd that included Brin, Google’s thirty-six-year-old cofounder, wearing jeans, a sweater, and a demeanor indistinguishable from the rest of his eager young crew. Google maintains that it is actively working to make journalism and literature truly democratic and, functionally, easier to do. Google’s “Office of Content Partnerships” sent me a list of “free tools journalists could use today for nearly every aspect of their work,” including Blogger, a platform for publishing online; Google Analytics, for measuring Web traffic; Google Web site Optimizer; and other tools. The publishers of newspapers, magazines, and books, recognize that Google and the link-referral service it represents have become inextricable from their audiences’ lives, and indispensable to reaching that audience in large numbers.

And yet there is a growing sense among the “legacy” media, at least, that Google facilitates a corrosive move away from paying content providers for their work. Proceeds go instead to those who sell advertising and other services while aggregating and/or lifting material they did not create. It is true that the content providers have submitted to the link economy of their own accord. Still, in a piece last winter, I wrote that the notion that “information wants to be free” is absurd when the referral mechanism makes a fortune and the creators get scraps. That position was excoriated by some bloggers, including one who, in a quote cited on The New York Times’s Opinionator blog, called it “sheer idiocy.”

Maybe. But only two months later, the Associated Press (clearly acting on behalf of the news organizations that own it) made a similar point and initiated a process that could end in lawsuits. Addressing the Newspaper Association of America, the chairman of the AP’s board of directors, William Dean Singleton, CEO of MediaNews, said: “We can no longer stand by and watch others walk off with our work under misguided legal theories.”

The full quote from which “information wants to be free” was lifted, by the way, is more ambiguous and complicated than that widely-quoted excerpt. The line comes from the futurist Stewart Brand, who first said it at a programmer’s convention in 1984 and elaborated in his book, The Media Lab: Inventing the Future at MIT, in 1987, where he wrote:

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Information Wants To Be Free. Information also wants to be expensive. Information wants to be free because it has become so cheap to distribute, copy, and recombine—too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away. It leads to endless wrenching debate about price, copyright, ‘intellectual property,’ the moral rightness of casual distribution, because each round of new devices makes the tension worse, not better.

Brand leaves out another factor—that valuable information is expensive to produce. But two decades later, the battles he foresaw are fully engaged.

An ecosystem in which all stakeholders in the content economy have a fair share. That is one media executive’s succinct summary of what is necessary to redress the growing imbalance of power and resources between traditional content creators and those who provide links to or aggregate that material. But the effort to find that formula is complicated because it involves technologies upgrading at warp speed, sweeping changes in popular habits, collapsing and emerging business models, and one of the basic pillars of our democracy—what we have always called a free press.

As this century began, newspapers, especially those in metro areas with dominant positions, were reporting profits of 20, 30, and even 40 percent. The New York Times was selling over a billion dollars a year in advertising and Time magazine held its seventy-fifth-anniversary gala celebration at Radio City Music Hall, which had been specially redone for the occasion. Fortunes disappeared in the tech bust of 2000-01, which seemed to underscore the fact that Internet-based commerce was in its formative stages. The news products on the Web—CompuServe, Prodigy, and America Online—seemed, on the whole, complementary to newspapers and magazines rather than competitive against them.

Yet the unlimited expanse that the Internet provides and the amazing capacity of Google (and Yahoo and MSN, etc.) to search it, soon began to change everything. Vending services like eBay and Craigslist flourished; sensations like MySpace and YouTube, where users provide the content, were born at the intersection of creativity and engineering; audiences were suddenly huge for essentially brand-new Web news providers online, such as MSNBC and CNN. Sites like The Drudge Report showed the potential of aggregation and, later, The Huffington Post showed the potential for garnering large crowds partly by recycling material created elsewhere.

Significantly, most of the established news organizations reached the same conclusion about how to take advantage of what was happening on the Web. They went for the model that had supported network television for decades—mass audiences attracted by free access that would justify high advertising rates. Virtually overnight, Google et al were delivering hundreds of millions of readers to media companies which, in turn, believed they could monetize those visitors.

This approach contrasted with the one adopted in the 1980s by the emerging cable systems for television. Those companies negotiated subscription fees with the providers of their most popular programming, such as ESPN and dozens of other channels, including some that carried news. (The average cable subscriber, for example, pays 77 cents per month for Fox News, whether they watch it or not.) Most cable networks also have copious advertising, from inexpensive pitches for local establishments to national campaigns. This flow of subscription revenues, combined with advertising, made cable programming a lucrative business—which, ironically, resembles the way newspapers and magazines operated until they unilaterally decided they were better off giving content away. (There are differences, of course, especially since barriers to a cable system are high, while barriers to launching on the Web are low, even though moguls like Barry Diller at The Daily Beast and others have found themselves investing real money there to get started.)

As the scale of the global economic implosion became clear, accelerating negative trends in circulation and advertising already under way, it became increasingly obvious that the free-content model was not working. News audiences were huge. On September 29, 2008, the day the Bush administration’s first bailout proposal was voted down by the House of Representatives and the Dow fell almost eight hundred points, NYTimes.com had 10 million visitors and 42.7 million page views. But revenues for The New York Times Company were disappearing so fast that this respected gatherer of news had to beg and borrow just to meet its debt obligations and maintain its news operation while also sustaining morale for the myriad innovations necessary to stay extant. This spring it threatened to shut down The Boston Globe, another financially sick newspaper with healthy traffic on its Web site. Unless new ways of attracting and sharing revenue are devised with the same breathtaking speed with which they have disappeared, the gathering of news by reputable, experienced institutions that are cornerstones of their community and the nation will be irreversibly damaged.

Print journalism bought into the free-news online model. Still, it is hardly surprising that the winners in the transformation of news dissemination, the distributors and aggregators, would become the focus of grievances by those they have trounced, willfully or not. So what is to be done to manage the consequences of this inexorable transformation of news delivery? If there is a simple, all-encompassing answer to that question, I did not find it in discussions with practitioners and pundits on all sides of the problem. But in the haze, I did find a tripartite framework for understanding the major aspects of the issue—let’s call them the doctrines of Fair Conduct, Fair Use, and Fair Compensation.

Fair Conduct

On Saturday afternoon, February 7, 2009, SI.com, the Web site of Sports Illustrated, broke a huge story: Alex Rodriguez, the mega-rich Yankees star, had taken performance-enhancing drugs while playing for the Texas Rangers. Sports Illustrated released the story on its Web site rather than in the magazine, according to the editors involved, in an effort to enhance SI.com’s standing as a destination for fans increasingly conditioned to getting sports news online. Within hours the story was everywhere, but if you went through Google to find it, what you likely got instead were the pickups that appeared elsewhere, summaries or even rewrites, with attribution. Most galling was that The Huffington Post’s use of an Associated Press version of SI’s report was initially tops on Google, which meant that it, and not SI.com, tended to be the place readers clicking through to get the gist of the breaking scandal would land.

Traffic on SI.com did go up on that Saturday and for days thereafter, but not nearly as much as the editors had projected. As long as the value of advertising on the Web is measured by the number of visitors a site receives, driving those numbers is critical, and therein lies the dilemma. Why did The Huffington Post come up ahead of SI.com? Because, even Google insiders concede, Huffington is effective at implementing search optimization techniques, which means that its manipulation of keywords, search terms, and the dynamics of Web protocol give it an advantage over others scrambling to be the place readers are sent by search engines. What angered the people at Sports Illustrated and Time Inc. is that Google, acting as traffic conductor, seemed unmoved by their grievance over what had happened to their ownership of the story. An SI editor quoted to me Time Inc’s editor-in-chief, John Huey, noting crisply that, “talking to Google is like trying to talk to a television.”

The rules of the road for distributing traffic on the Internet need to include recognition, in simple terms, of who got the story. The algorithm needs human help; otherwise, valuable traffic goes to sites that didn’t pay to create the content.

Fair Use

This has to do with how content is gathered, displayed, and monetized by aggregators, not how it is found and distributed. Fair use is a technical term for the standards one must meet in order to use copyrighted material without the permission of rights holders, as in excerpts, snippets, or reviews, and it turns out to be far more flexible than I long had thought. U.S. copyright law sets four main factors to consider in determining what is fair use: whether the quotation of the material is for commercial gain, the nature and scale of the work, the amount being used in relation to the whole, and the impact on the value of the material by its secondary use.

The definition of fair use was central in the lengthy negotiations among book publishers, the Authors Guild, and Google to settle litigation over Google’s intention to digitize copyrighted books for search and distribution without paying for them. At the outset, in 2006, Google apparently believed that releasing only “snippets” of the books meant it would prevail in a court test. The publishers and authors argued that once Google had unrestricted access to the content, it would inevitably be widely used in full or large part.

Ultimately, the sides decided not to force the matter to resolution. Instead, in October 2008, Google agreed to pay $125 million to the plaintiffs and to establish a system to pay copyright holder, share advertising revenues that may result, and build a registry for all books that are available.

The book agreement—actually the settlement of several lawsuits—is nearly 150 pages, plus attachments, of excruciatingly complex detail. Debate over the terms ever since they were announced has been fierce and the court has already postponed final comments from interested parties until October 7. He will then look at the criticisms put forward by, among others, the Harvard librarian and lawyers funded by Microsoft who contend that Google is gaining what amounts to a monopoly in the digital book arena. Then, the judge will determine whether to approve the agreement as is, or send it back for further negotiations to satisfy the objections of its critics. He cannot amend the terms himself.

How the logic of publisher-author-Google pact applies to the news business is not clear—except that Google has acknowledged that the right to scan and distribute information has value, which can be shared with the originators of that content. Google’s licensing agreement with the AP and other wire services—in which it publishes some AP content on its own servers rather than merely linking to it—may be another illustration of the same idea: pay to play.

But what of the aggregation of links? The Google position is that a link with a sentence or two as a tease is fair use of the material, and the site that generated the content actually is a beneficiary of the traffic. With news, the argument becomes entangled in whether the aggregation enhances or detracts from the value of the original content, and also in determining what amounts to fair use when an aggregator surrounds those links with its own summaries, blogs, and other interpretative embellishments, as some aggregators do. The news organizations also argue that aggregators should pay for that right to aggregate when they sell advertising around the links and snippets.

It would take a mind-bending interpretation of fair use to work these issues out, especially if the case went to trial. Many news providers don’t have the time that a case would take (years, probably). And Google, again, may not want to force a final determination of the matter, as in the books case. As the controversy over Google’s role in news intensified in the spring, executives from The New York Times Company, The Washington Post Company, and presumably others, met with Google in search of formulas that might balance their respective interests. Every one involved has signed nondisclosure agreements. If progress has been made in these discussions, it has not become public.

Fair Compensation

All of this still leaves the considerable question of monetizing the reading of material on the free-to-access sites that newspapers and magazines offer, now that it seems that online advertising alone will not be enough to support those operations. There are many ideas around for micropayments or subscriptions, memberships or paid sections within a free site, out of which may come a viable business solution or solutions. Based on my own reporting, the answer could be in some combination of individual payments or cable and telephone fees. Americans routinely pay telecom providers (Verizon, Optimum, and AT&T are the ones in my house) to deliver information and entertainment by television, computer, and wireless devices. The goal would be to extend those payments to the originators of news content. Google, it seems to me, might serve as a kind of meter, helping determine what percentage should go to the content originators. Complicated? Yes, but that is the kind of challenge that computers and the engineers who master them are meant to meet.

One of the best statements on this subject came from Jonathan Rosenberg, president for product management at Google, who wrote on a company blog, “We need to make it easier for the experts, journalists, and editors that we actually trust to publish their work under an authorship model that is authenticated and extensible, and then to monetize it in a meaningful way.” The book publishers and authors agreement with Google recognized that goal, acknowledging that all information is not equal and cannot be free and endure.

These fairness goals for the internet age are plainly arguable. However, this is not a debate that will end in a vote that determines the outcome by majority rule, which is why predicting where things will go next is so hard. Still, what is known, earnestly but correctly, as accountability journalism—news that orders and monitors the world—is indispensable, and paying for it is vital to society. We now know conclusively that digital delivery is going to be a (or perhaps the) main way people find out what is happening around them, so the burden of responsibility on those who frame the way news is presented is incalculable.

Google is in its adolescence as a company. Cycles in the digital era tend to be short, but Google and the enterprises and services it encompasses are at the pinnacle now. What the company will do with that power is unknown in large part because, like most big institutions, Google limits transparency and is defensive when it comes to criticism.

There is a message in history for Google’s leaders: nothing in the realms of business, information, entertainment, or technology remains as it is. Brin and Page stand on the shoulders of Gates and Jobs who followed Watson, Sarnoff, and Paley, who came after Luce and Disney and succeeded Hearst, Edison, and Bell. The next breakthrough innovators are doubtless at work somewhere. Will they help meet society’s fundamental demand for news that supports itself in a way that Google and the rest of the digital generation say they want to do, but have not yet done?

Google is an extraordinary company with a nonpareil record of creativity. What a wondrous thing it would be for newsgathering, in a time of mounting crisis, if Google turned out to be as much a source of solutions as it is a part of the problem. 

Peter Osnos is the founder of PublicAffairs books, and has been in journalism and publishing since the 1960s. His first article in CJR was published in 1977.