Sunday, September 2, 2007

Google Pushes News Wire Content to Compete with Portals

Reuters covers the licensing of content by Google from four major wire services, including Britain's Press Association, Canadian Press, Agence France-Presse and the U.S.-based Associated Press. On one level this is a very typical licensing deal equivalent to those inked by other major portals such as Yahoo, MSN and other outlets - and in fact Google had licensed rights to these content sources earlier in some instances but had not hosted their content. But the deal takes on a far different dimension given that it's with the leading Web search engine - one whose ability to deliver advertising revenues to portals using wire services is an important driver for traffic.

While Google ranking algorithms will take into account the appearance of wire content in other sites the links from Google searches and portal pages will lead to Google itself - helping its own ratings and, presumably, for its own ad revenues eventually. The AP story claims that this will have a major impact on AP member sites using their content but at least one commenter on Poynter Online claims that "For the vast majority of newspaper.coms I know, wire story traffic is not a big factor, and revenues from AP pages barely, if at all, cover the cost AP charges us for its CustomWire service." That may be true, but it's bound to hit those sites' overall traffic counts and referrals to other pages in their sites from wire content.

While newspaper sites will certainly feel some pinch from this move, the far larger losers in this deal will be the major portals such as Yahoo that rely on wire content for a significant portion of their news traffic and search engine referrals. With Google now playing by the same rules their relative lack of original news is bound to be yet another chink in their armor in the battle for ratings and advertising supremacy. At the same time wire services are looking at the diminishing fortunes of traditional news outlets such as newspapers and broadcast services and recognizing that they need to move more aggressively to build their brands online. In this sense Reuters has pointed the way for these wire services with its increasingly selective use of online syndication partners.

The biggest winner in this mix are the original news producers who are looking for stronger marketing of their content. From this perspective member-driven wire services such as AP are going to find themselves in a more advantageous situation as they continue to make it easier for their members to market unique content filed with AP into major outlets without having to hassle licensing deals. At the same time, though, these traditional news producers must become more adept at marketing their unique content directly via search engines, portals and social media services if they are going to continue to build the audience metrics that advertisers expect. Google's move places even more pressure on local news producers to come up with more viable strategies to engage their audiences in the contexts that they value most - and more opportunities for wire services to act as channels for those strategies.
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