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Friday, February 27, 2009

Google Puts Small Ads on Pages of News Site

Published: February 26, 2009

SAN FRANCISCO — Google began running small text ads on the pages of its Google News service this week, reviving a debate between the company and some struggling newspaper publishers, who have seen their businesses devastated by the shift of advertising to the Internet.

For more than six years, Google refrained from placing ads on Google News, in part to blunt criticism from newspaper publishers who were already unnerved that Google was building a competing news site using headlines and snippets of newspaper articles.

The company’s chief executive, Eric E. Schmidt, has sought to assure newspaper publishers that Google was a friend, not a foe, whose own business depended on a thriving marketplace of newspapers and other content creators. Brian Tierney, chief executive of Philadelphia Media Holdings, which own The Philadelphia Inquirer and The Philadelphia Daily News, said the new ads contributed to his skepticism about Google’s intentions.

“When Eric Schmidt says he worries about the newspaper industry, it’s crocodile tears,” Mr. Tierney said.

Google, whose own growth has slowed sharply in recent months, said its approach had not changed. “Eric has said many times that we strongly support journalism,” said Gabriel Stricker, a Google spokesman. “We’ve got teams of people who are working with hundreds of publishers to find new and creative ways to help them make money from compelling online content.”

Mr. Stricker said Google had decided to place ads on Google News because it had devised an approach that could deliver ads that were contextually relevant.

Google News automatically collects headlines and article snippets from more than 4,500 news sites and sends users who click on those excerpts to the sites where the articles originally appeared. The service drives significant traffic to many sites. As a result, many publishers have come to accept Google News.

“The Internet world is a very competitive world,” said William Dean Singleton, the chief executive of MediaNews Group, which owns 54 daily newspapers including The San Jose Mercury News and The Denver Post. “We don’t have to let them take our content. We let them do so because it drives traffic.”

Representatives of The Tribune Company; A. H. Belo Company, publisher of The Dallas Morning News; and The New York Times Company declined to comment.

Under pressure, and sometimes in response to lawsuits, Google has agreed to license content for its service from some news outlets, including The Associated Press and Agence France-Presse. Those agreements generally allow Google to use the content in different ways, including keeping articles on its own site. Google has maintained that its use of headlines and snippets was permissible under “fair use” provisions of copyright law.

Reuters, which does not have a licensing arrangement with Google, said it would be watching the company closely.

“We are certainly not surprised by the move, which places Google News in a position to compete with news publishers — giving us cause for concern,” said Alisa Bowen, a senior vice president for Reuters.

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