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Google and AP: How to make friends and licensing deals

Google and AP: How to make friends and licensing deals

Yesterday the Associated Press reported that Google and the AP had announced that the two companies had updated their licensing deal for online content. Specifics of the arrangement were not released to the public, although there are two main factors in the deal: Google will purchase AP's content for an undisclosed amount, and the two companies will also collaborate to increase AP's revenue over the internet. The terms of the contact may not be dramatically different from previous licensing contracts, yet the recent announcement marks a shift in more diplomatic relations between AP and Google.

Originally Google and AP signed a multiyear licensing contract in 2006, but the conditions of the agreement left AP decrying that Google was publishing entire articles without sufficiently compensating the news cooperation. Google retaliated, claiming they were in full adherence to international copyright laws. The negotiations for a suitable contact came to a standstill around the time that the original licensing deal was to expire. From December to February of 2010, Google news did not host any material from AP. The two companies started collaboration again in February, and the recent announcement of a new contract implies that the rocky relationship between Google and AP has smoothed over.

The Associated Press can not avoid working with the world's largest search engine, especially in difficult economic times. Unlike most news organizations, AP sells its content to other newspapers and broadcasters, thus AP does not require the same need to drive traffic to its website. Yet as advertising revenue has diminished throughout the news industry, the AP has been forced to lower its own fees leading to a 10% drop in earnings. AP has had to increase its cutbacks, which included releasing roughly 90 employees and implementing a hiring freeze.

The partnership between AP and Google might create improved methods for profitable distribution of news. While the licensing deal is not a novelty, this time the two industries seem more keen on working together."Probably the main shift of note here is the change represented not in the terms, but in their tone," speculates the Nieman Journalism Lab. "There's reason to think, in other words, that the licensing agreement is more than simply a contract renewal, and more even than another detente: that it marks a change in the overall relationship between the two trend-setting media organizations. Us-versus-them becoming let's-work-together." If this announcement is mostly a shift in diplomatic tactics, will AP actually see an increase in revenue from Google in the coming months? And will it lead to more cooperation between Google and other news outlets?

Sources: AP via ABC news, Nieman Journalism Lab



Stefanie Chernow


2010-08-31 13:26

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