‘Googliath’ Looks to Address Industry Fears

By Steven Vass Media Correspondent

VINT Cerf will be putting his distinguished head into the lion’s mouth when he stands up to address the Edinburgh International Television Festival this morning. Cerf, who is regarded as one of the founding fathers of the internet and now enjoys the title of Google "vicepresident and chief internet evangelist", will face an industry with several new reasons to be nervous of his employers.

First, Google announced that it is trialling advertising on YouTube, apparently putting its leading video clips site in direct competition with broadcast television for the first time.

Then Ofcom produced figures showing that the internet is increasingly distracting viewers from their televisions. YouTube, MySpace and all the rest have helped to drag TV viewing down to three hours and 36 minutes from its peak of three hours and 44 in 2002.

Combined with the pressure that the main terrestrial channels are under from digital rivals, and the fact that four out of five adults with digital video recorders are skipping the adverts, this superficially modest 4-per cent drop in viewing will look almost cataclysmic to those in commercial television.

When Cerf makes his Alternative MacTaggart speech today, much of the audience could, therefore, be forgiven for wondering if they are watching the devil beating his wings.

This is nothing new to the newspaper industry, of course, where the search giant coming to be known as "Googliath" has long been a kind of lightning rod for digital scaremongering.

In a repeat of what happened to Microsoft in the 1990s, the once plucky young search engine has come to be accused of everything from appeasing Beijing to threatening to destroy the media buying market.

Most newspaper concerns have centred on Google News, with commentators arguing that Google is earning a fortune from news stories and making it unnecessary for readers to visit newspaper sites. Google has been accused ofhaving a cavalier attitude to copyright law, and lawsuits around the world have seen publishers demanding licensing payments to redress the balance.

If this is not nipped in the bud, the thinking goes, it is merely a short step for the search engine to use its algorithms to create new stories from the words and sentences of those published by others.

The latest aggravation came several weeks ago when Google announced it is experimenting with allowing the subjects of stories to post comments in the US.

"Google’s ‘experiment’ seems to have brought the company a step closer to being a provider of content rather than merely a gatekeeper to other websites, " concluded The Guardian.

There are others, however, who have questioned whether the vilification of Google News is justified. For instance Graham Lovelace of Lovelace Consulting says: "I think the threat has been overblown. You are getting a headline and a paragraph at best. You have to click on a link to go through to the site to understand what the story is about." He adds that the new comment facility is more likely to make readers more curious and click through to the story rather than satisfy them with less.

Peter Bale, executive producer UK at Microsoft and former editorial director at Times Online, says: "Google has been almost entirely beneficial to the newspaper industry, although some executives don’t realise it yet.

"In the case of The Times, as much as a quarter of traffic [around 2.5 million unique users] comes from search engines." Neither has Google moved into making content, in line with the company’s reassurances over the past couple of years. As Lovelace says, the nightmare scenario of Google buying the likes of Time Warner or Disney seems not to be any closer.

These arguments have not entirely been lost on newspaper publishers.

Many have grudgingly come to recognise the traffic benefits of Google News, which might go some way to explaining why there has been a recent drop-off in demands for compensation from rivals, in spite of Google losing a test case in Belgium (which is now being appealed) and settling out of court with Agence France-Presse (AFP) and Associated Press (AP).

AT the same time, there has been speculation that Google has quietly reached agreements with certain wire services and newspaper organisations, as first reported in the Sunday Herald in May.

These reputedly aim to waive the threat of legal action in exchange for partnerships that allow the news gatherers to benefit more from Google’s search capabilities.

But Jessica Powell, a Google spokeswoman, denies there have been covert deals and says that the lack of follow-up legal actions is because news groups had realised that coming off Google News would lose them more than they could gain in damages. She says there might be confusion over the fact that Google is soon to launch a product with numerous wire services, including AFP, AP and the UK’s Press Association, which goes beyond what is possible within the copyright law.

Whatever the exact position, the question for Google now is whether the company will have such a rough ride in television as it has had with newspapers.

As Jonathan Barnard, head of publications at media buyer ZenithOptimedia says of the YouTube advertising move: "This is really the first time that Google has squared up to the television industry." Google’s argument is that YouTube, which limits user- generated content to 10-minute clips, does something very different from ordinary television. Its viewers consume lots of snippets of entertainment rather than large dollops, and they are watching amateurs rather than professionals.

Naysayers counter that the idea of watching full television programmes online is still in its infancy. As broadband speeds increase and services such as the BBC iPlayer and Joost become the norm, online video viewing habits might start to look very different. Then there is the decline in television viewing shown in the latest Ofcom figures, for which YouTube arguably has to accept its part.

In sum, it is probably too early to say how things will develop. Barnard, for one, does not believe that clip services such as YouTube will have an enormous effect on television. He says: "To the extent that viewers stop watching TV and starting watching YouTube, that is a threat, but I think it’s more likely to be supplementary." The main broadcasters are certainly all positioning themselves online, with the BBC, Channel 4 and ITV all launching services from their sites as well as partnering the likes of YouTube and Joost. Whatever the future holds, the key thing is not to repeat the mistakes of the music, and to some extent the newspaper industries, and get left behind online.

But through all this talk of collaboration and mutual benefit in newspapers and television, there is still one issue that Cerf and co struggle to explain away. Search advertising, the sponsored links business on which Google has made its name, is powering forwards while revenues in television and press stagnate and decline.

ZenithOptimedia forecasts that online spending will grow 27-per cent this year and take up one-fifth of all the money spent on advertising in the UK by the end of next year. Search advertising, which comprises 60-per cent of this figure, has also almost certainly taken a pile of money away from everyone else.

Google would argue that it has both attracted new advertisers and benefited other media groups’ online businesses by generating traffic, but it is hard to believe it is not the net beneficiary when it takes about 7p in every advertising pound.

What this means is that even if Google stays out of content creation and avoids competing head-on with newspapers and television, life with the old media will still be tense. It will be some challenge for Cerf or anyone else at Google to persuade anybody otherwise.

Originally published by Newsquest Media Group.

(c) 2007 Sunday Herald. Provided by ProQuest Information and Learning. All rights Reserved.