Is Google Paying Newspapers for the Right to Link to Them?

It's not often that I have cause for two blog posts about newspapers and search, but here we go... I just stumbled across a fairly surprising story from Mercury News that strongly implies that Google is paying some news sources for the right to index their content and send them traffic. The article cites deals that have been signed between Google and the Associated Press and mentions Yahoo!'s tendency toward things like "direct payment, revenue sharing and traffic exchanges."

Now, until it's confirmed by Google, this is one of those articles that's easy enough to read and wonder if either the author didn't quite get what was going on, or if you're simply misreading what seems to be implied here. No where does the article come right out and say that Google is paying sites to link to their content, but that does seem to be the easiest take away from the way the article is written.

Consider...

Now, that last statement from Schmidt could mean that Google wants content providers to earn most of their income from advertising, so Google is happy to provide AdSense as a revenue option and to send enough traffic to the content providers that they can make their own profits from advertising. That said, it could also mean that Schmidt is saying that Google wants the content providers to get the majority of the advertising revenue that Google gets due to running those content ads. That's two very different meanings and the article doesn't really do a very good job of clarifying what's meant.

The article goes on to say...

The problem here is that Internet portals like Yahoo! and American Online tend to run the full text of news stories on their own web sites. Obviously, if you're going to run the full text on your site, the user then has no reason to click through to the content provider, which would mean that you need to compensate them financially for that lost traffic. Since Google does NOT provide the full content of the article, but rather a snippet designed to entice you into clicking on the article, thus sending traffic and the potential resulting ad revenue to the partner site.

Now, that hasn't stopped companies like Agence France-Presse from complaining about Google stealing their content. While negative outcomes of related lawsuits could have an impact on Google's ability to continue "summarizing" stories without paying royalties, it's also important to remember that if Google actually did start paying for the "rights" to link to articles, that their reputation as an unbiased news source would quickly go down in flames.

That said, not everyone seems to be obsessed with receiving financial payment...