Thieves unite in $1.65 billion deal

Good piece by Jeremy Warner in today's Independent about what really unites YouTube and Google. As he says, they are tied together by their use of free content to establish value for their businesses and to drive revenue. Neither have the costs of a traditional media company. Both rely on web users and other web sites to create their content.

The key issue, as Warner stresses, is in their blatant disregard for intellectual property law:

Yet there is also a more sinister reason why Google is buying YouTube. It is to do with the fact that the two have a common set of business values in the sense that neither seems to care a fig about the law of copyright. Both rely on the use of free content to drive their business. They therefore have next to no cost, or at least one so marginal that it wouldn't be recognised by any traditional media company.

Warner gets it right. Both Google and YouTube have figured out a way to transform other people's content into revenue. Both companies skirt copyright laws and both are cavalier about protecting legal content. Warner indicates that both, in the long run, are probably doomed to the same fate as Napster. He makes the analogy with online gaming sites in the United States -- which are now being "trounced" by the courts.

As Warner says, Google isn't a "proper business." Exactly. For more on the essentially fraudulent nature of Google's business model, listen to my interview with Richard Landry, the executive director of the Independent Press Association. Landry also argues that the Google business model is a form of theft. The search engine steals content from traditional content producers and then makes money by selling advertising off the back of the snippets of information that it displays on its website. As Landry suggests, its the newspapers and other content creators who should be reaping the rewards of Google's advertising revenue.

This issue has found its way into court in Europe where Google is now being sued by various Belgium newspapers for intellectual property violations. Last month, a Belgium court  ordered Google to remove all links to French- and German-language newspapers. At issue is Google's right to display headline text from these newspapers in its search engine links.

"I hope this is a trend," said Pierre Louette, president of Agence France-Presse, in reaction to this court order.

So do I.

Comments

[heather]

My 1999 analysis rom the Silicon Alley Reporter: Building A Business on Copyright Infringement

http://subvert.com/blog/1999/01/01/building-a-web-business-on-copyright-infringement/

[karl_keller]

So Jeremy Warner thinks that Google, with $6 billion in revenue, and gross profit margins in excess of 50% is going to go the way of....NAPSTER??

Gee,how many possible synonyms can we come up for "naive?"

For those European newspapers so up in arms about Google linking to their stories, I have a suggestion: either (1) get off the web or (2) charge readers for the content. Lemme see...there's a newspaper that's doing the second...what's it's name?? Oh, yeah..that's right: The New York Times.

Now, how's that stock doin'? Any word on that?

[Jeff]

Incredible. How do those traditional content providers expect to have potential customers find their work without a search engine? With millions of websites in the world, a search engine is the only way to direct users to the content provider. Does a newspaper expect a customer on the street to pay for the snippet of information they read through the window of the newspaper vending machine too?