Google and the Associated Press Play Hardball

The news-media industry has no more beloved whipping boy than Google (GOOG), which -- in the eyes of its many detractors -- profits from selling advertising around links to articles while the newspapers that publish the articles themselves go begging. But being a whipping boy gets old.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% That may be why the Mountain View, Calif.-based company is going on the offensive in a suddenly public dispute with the Associated Press news service. Since 2007, Google has hosted AP stories, meaning the full content of those articles appears on Google-owned pages, including Google News.

But the licensing agreement covering this arrangement expires at the end of January, and apparently negotiations over a new one aren't going well. In late December, Google quietly stopped hosting new stories, a development that was first noticed by Search Engine Land's Danny Sullivan. A Google spokesman declined to comment on the reason for the stoppage, and neither party has anything to say about the state of their talks.

But it's hard to see Google's actions as anything other than a preemptive strike -- although there have been plenty of warning shots from the other side. AP chairman Dean Singleton and CEO Tom Curley have both been aggressive critics of Google's M.O., claiming it depends on "misguided legal theories" and amounts to "exploitation."

The shrill tone of its rhetoric suggests that AP thinks it deserves a lot more out of Google than the cash it's getting from their current deal. Google's response implies that AP is lucky it's getting anything at all. Why should Google pay to host AP stories in the first place besides for the good P.R.? After all, under the "misguided legal theories" it applies to other publishers, it's perfectly free to aggregate the headlines and link to those same stories on the websites of the newspapers that are AP subscribers.

As TechCrunch's Erick Schonfeld notes, by dropping its hosted stories now, Google "is showing the AP in a very visible way what will happen if Google News no longer carries AP stories, and they are doing this before the negotiations are up so that the AP can measure the loss in readership that Google News brings."

In other words, Google is showing AP that actions speak louder than words, however strident.
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