Beta Not Make Money

Media Hack
When Google launched its news site three years ago, it led to a certain amount of hand-wringing at Yahoo News, MSNBC and CNN. Unlike its competitors, which were forced to budget millions of dollars a year to license up-to-the-minute content and pay reporters and editors, Google had figured out a way to do it on the cheap.
By relying on algorithms, Google News completely automated the news-gathering process. High-speed computers sift through some 7,000 sources of information -- 4,500 of them in English -- and determine which are the most relevant articles. They then grab the headline and first paragraph to post on Google's news page, with the headlines acting as external links.
When users click on the links on Google News pages, they are taken directly to the publisher of the material, as they are when they click on thumbnails of photos. Glitches aside -- like when its computers misfire and Google News runs the wrong photo with an article, or it accidentally ignores an important breaking news story completely -- it's akin to browsing newspaper headlines, lead paragraphs and photos at a newsstand, and choosing which stories you want to read.
With a clean, no-nonsense interface and existing search engine traffic, Google News didn't take long to attract a loyal following and elbow its way into the top-10 news sites, pulling in some 6 million unique visitors a month. Of course, executives at rival online news publishers couldn't help but wonder why they shouldn't just imitate Google's model and pare their budgets to the bone.
How to make money
As it turns out, however, Google has a problem that is nearly as complex as its algorithms. It can't make money from Google News.
So while other online publishers like Yahoo News and MSNBC earn tens of millions of dollars in revenue each year and continue to grow, Google News remains in beta mode -- three years after it launched -- long after most of the bugs have been excised.
The reason: The minute Google News runs paid advertising of any sort it could face a torrent of cease-and-desist letters from the legal departments of newspapers, which would argue that "fair use" doesn't cover lifting headlines and lead paragraphs verbatim from their articles. Other publishers might simply block users originating from Google News, effectively snuffing it out.
What is fair use of a copyright work? According to New York University, where I teach, it covers comment, criticism, news reporting, research, scholarship and teaching, with several factors considered, including how much material is involved as a percentage of the entire work and whether use is of a commercial nature or strictly for nonprofit, educational purposes.
So if you are reviewing the latest Eminem CD and need to lift a few lyrics you're good to go. If you need to summarize a medical article on, say, arthritis, or a new study on the percentage of households with high-speed internet access, you can (within reason). But if you want to run a business of aggregating news content by running headlines and whole paragraphs of copyright work, you might run into trouble.
And it's not only in lawsuit-crazy America that Google's aggregate news model faces an uncertain legal future. Earlier this year, a court in Hamburg, Germany, ruled against Google's German news service when it found that thumbnail images were protected under German copyright law and could not be reproduced without permission. (Google has appealed.) A few weeks ago, half a world away, Chinese publishers Sing Tao electronic news service, Ming Pao newspaper and Radio Television Hong Kong, a government-owned radio station, greeted the launch of Google's Hong Kong news with a spate of letters alleging copyright infringement.
Which prompted Stanford Law School copyright guru Lawrence Lessig to wryly blog: "That'll teach us for teaching the Chinese about the importance of copyright law."
It's hard to feel sorry for Google, though. In April, lawyers for the billion-dollar search engine company that Sergey Brin and Larry Page founded sent their own cease-and-desist letter to Julian Bond, a British programmer who had created customized RSS feeds from Google News.
Ironically, the letter informed Bond that Google does not permit "webmasters to display Google News headlines on their sites."