Google News Gets Text Ads

Feb 27, 2009 (10:02 AM EST)

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In November, Google began placing ads where no ads had gone before, launching text and image ads in Google Image Search, text ads on Google Finance, and Sponsored Videos on YouTube.

On Wednesday, Google revved its revenue engine further, adding text ads to search results in Google News.

It's a significant turning point for Google News, which has been ad-free since its beta launch in April 2002, apart from overlays on videos provided by select news partners.

"In recent months we've been experimenting with a variety of different formats, like overlay ads on embedded videos from partners like the AP," explained Google business product manager Josh Cohen in a blog post. "We've always said that we'd unveil these changes when we could offer a good experience for our users, publishers, and advertisers alike, and we'll continue to look at ways to deliver ads that are relevant for users and good for publishers, too."

The Associated Press, coincidentally, has been pursuing a lawsuit against All Headline News Corp. for misappropriating its breaking news stories. A recent ruling in the case supports the notion that AP has a quasi-property right in its "hot news" stories and could end up giving AP more leverage in future negotiations with sites like Google News that make use of small amounts of AP content.

AP did not respond to a request for comment.

Google News was sued in 2005 by Agence France-Presse and in 2006 by a group of Belgian newspapers for copyright infringement. Google settled the AFP case in 2007 on undisclosed terms and now carries news links from the AFP. It was found to be infringing the copyrights of the Belgian newspaper group in February 2007 and is appealing that ruling.

Those lawsuits may have instilled more sympathy in Google for the financial straits faced by news organizations all over. Google CEO Eric Schmidt told Fortune last month that he wished the newspaper industry could be saved. However, he couldn't think of how that might be achieved. "We've tried to get newspapers to have more tightly integrated products with ours," he said. "We'd like to help them better monetize their customer base. We have tools that make that easier. I wish I had a brilliant idea, but I don't."

Asked whether Google had any kind of revenue-sharing arrangement in place to compensate news organizations for providing the content that Google News aggregates, a Google spokesperson said in an e-mail, "Yesterday's [Feb. 26] announcement is consistent with those we have done in other spheres, including text ads on Google Search results and Google Book Search search results. Publishers continue to benefit from the hundreds of millions of clicks Google sends them every month. In addition, we will continue to examine ways to help partners monetize their content on their own site and on Google News."

Google maintains that it respects the wishes of copyright owners. "If a newspaper does not want to be part of Google News we remove their content from our index -- all it has to do is ask," a company spokesperson explained. "There is no need for legal action and all the associated costs."

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