Fortune magazine reports that Google vice president Marissa Mayer publicly stated that Google News –an aggregator that contains no advertising– draws in approximately $100 million in revenue from paid searches that get funneled through the site. Fortune opines:
“It’s not all about the search engine itself. Google is happy to build popular products that don’t make any money on their own but tie users into a broader Google ecosystem.”
The Valleywag tech blog says this particular insight paves the way for media organizations to sue Google News for making use of third-party content. Valleywag says:
What neither Mayer nor Fortt explained: The real reason why Google doesn’t put ads on Google News. That’s because it fears lawsuits from the media organizations whose headlines and text it picks up and republishes. (It’s already lost a court case brought by a newspaper group in Belgium). By not running ads on Google News, Google lawyers could argue it’s not profiting from their work.
Journo blogger Lucas Grindley (hat tip to him for the link) says this revelation is yet another reason why Google is indeed directly competing with media organizations. Grindley writes, “As profits shrink and newspapers look for a scapegoat, someone is going to sue that woman.”
I made a similar argument last week when I called Google’s new Knol site a “direct challenge to media companies” (though I did stress that blaming Google for the news industry’s woes is a red herring). As Google grows its plethora of offerings, it is increasingly getting into the content business.
Google already has an enormous share of the online advertising market through it’s AdWords program, which finds the advertisers and provides a platform on which to serve the ads. Now, Google is increasingly attempting to gain a bigger piece of the inventory on which the advertising is displayed. That means launching additional sites that lead to searches with paid advertising, circumventing news sites’ own search features (another search with paid advertising) and hosting original content on their own servers (AP stories, Knol).
So if you aren’t already, start worrying about your event listings, restaurant reviews, comment boards, public records data and any other number of searchable things of which your news organization makes use. Google probably won’t be far behind.