Media and Communications Policy : Media Policy & First Amendment Foundation : The Media Institute : Free Speech, Media Regulation, Content Controls

• Print
• Comments
• Trackbacks
• Share Link

The search giant Google is attracting criticism from those who see in that company’s business practices a threat to professional journalism, old and new.  The latest such comes in the form of a policy paper written by media attorney Kurt Wimmer, and published online by The Media Institute.

Honored this year by the Reporters Committee for Freedom of the Press, Wimmer has advised journalists and legislators in more than two dozen countries concerning new media laws, protection of journalists, and freedom of information.

The thrust of his paper is that, at a time when there is great concern for the future of the media, much of this concern is misplaced.  There’s no crisis in journalism per se, he argues, but rather a crisis in the monetization of journalistic content, a condition greatly exacerbated by the fact that one company dominates both search and online advertising.

Is anyone monetizing digital content?  Yes.  News and information continues to be monetized – at a rapidly increasing rate – by search engines, content aggregators, and others whose new, targeted advertising models have overtaken the spending that had supported journalism in the past.

Again, the dramatic new feature here is the split between content creation and content monetization – those who create the content are not those who are monetizing it.  Google, for example, had a record $23 billion in revenue during 2009, without producing a word of original content.  Google’s job is simply to monetize the content that others have created, and it has performed that job exceptionally well.  Today, more than 70 percent of the Web searches conducted in the United States (and up to 90 percent of those in Europe) flow through Google’s servers.  By its recent acquisition of AdMob, Google will control the vast majority of the mobile application advertising market as well.

Complaints about Google’s disruptive effect on professional journalism are not new, of course, and this is not the only active concern about Google’s business practices.  Other people have problems with the company’s abuse of copyrighted material (as in Viacom’s lawsuit against Google’s YouTube subsidiary), or with Google’s invasion of privacy, such as seen in the recent “Spy-Fi” affair.

What is new is the degree of scrutiny of Google’s practices by government antitrust officials.  As reported last month in a lengthy story in The New York Times, “the search giant’s decisions on such matters may soon be judged by higher authorities.”  As the Times reporter, Brad Stone, put it: “Almost a decade after Google promised that the creed ‘Don’t be evil’ would guide its activities, the federal government is examining Google’s acquisitions and actions as never before, looking for indications that the company’s market power may be anticompetitive in the worlds of Web search and online advertising.”

It’s become hard to know, in recent years, what the government may deem to be in restraint of trade, but if it happens, sometime in the near future, that it initiates an antitrust review of Google and you find yourself wondering why, read Wimmer’s piece and wonder no more.

Cross posted here on Huffington Post.

• Print
• Comments
• Trackbacks
• Share Link

Microsoft’s Chief Counsel for Intellectual Property Strategy, Tom Rubin, recently gave a speech to the UK Association of Online Publishers that has made some waves.

At its most basic, Rubin’s speech was a call for greater copyright protection of “quality content,” and an appeal to content providers for new approaches to the dissemination of their content online.

“The evidence is in,” he says, “and I think we can safely say that the ‘information wants to be free’ approach not only does not work, actually it has been a disaster for almost all newspapers.”

Even if, as a columnist for CNET suggested, Rubin’s speech was meant to position Microsoft, at Google’s expense, as the “safe” technology partner for content companies, many of the specific observations, and the very language employed, provide a welcome contrast to the carelessness and condescension that mark so much of the digerati's take on the subject.

Speaking of the Evil One, turns out that Google and Yahoo! called off their joint advertising deal just in the nick of time.

A story in the December 2 issue of Am Law Daily quotes Sanford Litvack as saying that the Department of Justice was just three hours away from filing antitrust charges to block the deal when the two companies abandoned their pact.

Litvack says that had the deal not been withdrawn the DOJ would have challenged it under sections of the Sherman Act that “ban agreements that restrain trade unreasonably,” and “make it unlawful for a company to monopolize or attempt to monopolize trade.”

As noted here in September, because of its opacity and potential harm to online publishers and advertisers, the deal alarmed many people, including us. Glad to see it go away, unwept.
 

• Print
• Comments
• Trackbacks (1)
• Share Link

We’ll know soon whether the proposed Google-Yahoo! advertising deal will be challenged by the Department of Justice. Certainly there are signs, most notably the hiring of antitrust litigator Sanford Litvack, that it may do so.

But figuring out what is, and is not, in restraint of trade is kind of tricky these days.  In 2002, antitrust concerns derailed the merger of DirecTV and Echostar, a union that would have reduced the number of satellite TV companies from two to one.  Yet just this summer, the two companies that comprise the whole of the satellite radio industry were allowed to merge.

So the opinions that follow aren’t informed by any special knowledge of what the DOJ will do, or even by the factors that will carry the greatest weight within that agency.  By whatever market analysis the DOJ employs, the deal that some refer to as GooglyHoo either will or will not be allowed to go forward.

The question being addressed here is narrower.  It is what the deal might mean to online publishers.  Because of the inherent uncertainties in a deal not yet consummated, much less experienced, we don’t have all the facts.  But there’s a difference, as someone once said, between a lack of complete knowledge and a complete lack of knowledge.  We don’t know everything about GooglyHoo, but we know enough to be worried.

Importantly lurking in the background of this matter is the parlous state of journalism and the legacy media.  In the introduction to its State of the News Media 2008, here is how the Project for Excellence in Journalism (PEJ) put it: “The crisis in journalism, in other words, may not strictly be loss of audience.  It may, more fundamentally, be the decoupling of news and advertising....  Online, the problem is that the revenue model is in search, not conventional, advertising -- and journalism sites are now already lagging behind other Internet sectors financially.”

In a Perspectives piece published by The Media Institute earlier this week, attorney Stephen Kinsella suggests a number of ways in which the Google-Yahoo! ad deal could harm the interests of publishers.  Most directly, he says the deal would mean that “online publishers will earn less revenue from their search syndication and contextual advertising deals.”

“Google and Yahoo!,” Kinsella notes, “are currently the two major players in syndicated search and contextual advertising, and compete with each other for these deals with online publishers.  This competition is what pushes both companies to offer more advantageous terms to online publishers.  A Google-Yahoo! agreement will weaken Yahoo!’s competitiveness in bidding for these deals, simply because Yahoo! will have fewer of its own ads to serve as advertisers increasingly migrate away from Yahoo!’s higher prices following the implementation of the deal.”

A similar argument was made by the World Association of Newspapers (WAN).  On Sept. 15, this umbrella organization for some 18,000 newspapers worldwide asked competition authorities in Europe and North America to block the deal, saying it would have a negative impact on the ad revenues that the search firms provide to newspapers.

Quoth the WAN: “The competition that currently exists between Google and Yahoo! is absolutely essential to ensuring that our member titles receive competitive returns for online advertising on their sites….  In our view, the proposed advertising deal between Google and Yahoo! would seriously weaken that competition, resulting in less revenues and higher prices for our members.”

Concerns about the prospective anti-competitive effects of the deal have also been expressed by the leading U.S. advertising association, the Association of  National Advertisers, and with less vigor by the American Association of Advertising Agencies.

The concerns and objections raised by these individuals and organizations do not, of course, prove that the Google-Yahoo! ad deal would be ruinous to online publishers, or that the deal would mark the beginning of the end for Yahoo!.  But given the current state of the legacy media, and their future reliance -- if they have a future -- on online advertising, it is not surprising that this deal has alarmed many people.

Judging by some of its business practices and policy positions, as posted here in July, Google the company (as distinguished from Google the search engine) disappoints in many ways.  And at the end of the day this disappointment, if shared, may be a matter of some moment.  Because given the opacity and potential harm of this proposed deal, the question of support for it may come down to a matter of trust.  And the view from here is that Google hasn’t earned that trust.

• Print
• Comments (1)
• Trackbacks (1)
• Share Link

For a company whose corporate motto is “Don’t be evil,” Google has an unfortunate capacity to look past the most obvious things.

Take, for instance, its stance in favor of “net neutrality.” Insofar as this concept is more than a slogan it’s a bad idea, and especially so as a matter of policy.  Legislation like the Internet Freedom Preservation Act, for example, invites real government regulation of the Internet as a solution to an imaginary problem.

As seen in the title of the congressional legislation, the language of net neutrality proponents, always over the top, has lately taken on a kind of goofy grandeur, with some — like Save the Internet, a coalition coordinated by Free Press — trafficking in such pap as “Net neutrality, the First Amendment of the Internet.”  (Of course it is.)

But what’s the attraction in all of this for Google?

The critics’ answer is that Google wants to ensure, whatever the cost to the future development and independence of the Internet, its own dominant, and free riding, position.

Google’s approach to the problem of copyright infringement also calls into question the company’s high-mindedness.

As charged in the case of Viacom v. YouTube,  Google is accused of flagrant violation of copyrighted material on the website of its YouTube subsidiary.  Google’s defense is that it takes down offending posts after being notified, and that this is sufficient under the safe-harbor provisions of the DMCA.

But in its complaint Viacom makes a compelling case that the takedown process is an endless loop of notifications and re-postings, and that, in fact, copyright infringement is at the heart of YouTube’s business plan.

A number of observers have suggested that Viacom’s lawsuit is just an attempt to win a favorable licensing agreement, and that in the end the parties will work out some satisfactory arrangement between themselves.

Perhaps, but copyright infringement is not a crime against humanity, it’s a crime against copyright holders, and if a negotiated settlement is the result, so be it.  This said, much might be usefully clarified if the dispute goes all the way through trial.

In any case, the point is that, as with net neutrality, Google’s posture regarding copyright infringement seems to be driven more by its own interests than by any sense of a community of interests.

By the standards of those of us at The Media Institute, which is primarily a First Amendment organization, Google’s lack of any meaningful concern or action regarding freedom of speech and of the press is the most troubling aspect of the company.

We would not have this concern if Google were just a small affair, or if the legacy media were fat and sassy.  But neither is the case.  Google is a giant while newspapers, for instance, are in a fight for their very survival.

Just to establish a frame of reference, as this post is being written (midday, July 10), here are the market capitalizations of some leading media companies: Time Warner, $50B; Disney, $56B; Washington Post, $6B; Gannett, $4B; New York Times, $2B; and McClatchy, $427M. And Google’s market cap?  It is just in excess of $172B!

In other words, the market values Google more than it values Time Warner, Disney, Washington Post, New York Times, Gannett, and McClatchy put together!  In fact a lot more — 45 per cent more.

And the rub in this is that, as an historical matter, the most important players in promoting and defending the First Amendment have been Hollywood and newspapers.  Yet these are two industries much beleaguered by the Internet, of which Google is the leader.

Against this background one might expect a company determined not to be evil to mount a major effort, if not in assistance to the old media, then in lending a hand in promotion of the First Amendment. Sorry to say, Google’s record in this regard is a blank slate.

It’s in the nature of the way the world works that one can “be evil” in more than one way.  One can do it by acts of commission, and one can do it by acts of omission.  Judging by the examples above, Google does it both ways.