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A Google Project Pains Publishers

By Burt Helm Google (GOOG) can search an astonishing 8 billion Web pages. And yet, that's just a drop in the bucket compared to the knowledge that's stored in the world's libraries but not available online.

So when Google announced last year that it planned to scan millions of the world's books and make them searchable online, many were thrilled. Many -- but not everyone, it turns out. In a May 20 letter, the Association of American University Presses (AAUP) blasts Google's so-called Print for Libraries program for posing a risk of "systematic infringement of copyright on a massive scale."

WHAT IS FAIR USE? The letter from Peter Givler, AAUP's executive director, was obtained by BusinessWeek Online (click here to see the letter). The missive says the Google initiative has the potential for serious financial damage to the group's membership. "What I really hope the letter will do is open up a serious and substantive discussion with Googleo get them to respond to the substantive legal issues," Givler told BusinessWeek Online.

The AAUP isn't the only organization to put Google on notice. BusinessWeek Online has also learned that in recent months, major publishers John Wiley & Sons and Random House have also sent letters to Google expressing similar concerns about the libraries program. "We don't see how a for-profit company compiling this would be considered fair use," says Allan Adler, head of legal and government affairs for the Association of American Publishers, the principal trade organization of the book publishing industry.

Random House declined to comment. Wiley released a statement saying it is "exploring issues and opportunities with Google, including the potential impact of this program on our authors, our customers, and our business." Simon & Schuster spokesperson Adam Rothberg declined to comment but added, "There are concerns out there."

RUSHING TO SIGN UP.?Google says it's doing its best to look out for the interests of its partners, while building the best service possible. "Google was founded on this very respectful relationship with content owners," says Adam Smith, senior business product manager at Google.

The online search giant declined to comment directly on any of the complaints made in the letters (the latest one from the AAUP is expected to arrive on May 23). A Google spokesman would only say, "They're valued partners of ours, and we don't offer comments on partner discussions." Speaking more broadly, Smith says, "In the case of the Google Print program, whether it [be a] library or a publishing partner, we take a very conservative approach."

Back in October, Google Print seemed like a dream deal for publishers. Indeed, some couldn't sign up fast enough. The search outfit invited publishing houses worldwide to send books for digitization online.

LIBRARY SHOCK. Here's what Google offered: When a book came up on Google searches, users would only be allowed to see a few pages of the book, but links would be provided to the Web sites where the books were being sold. The link would go to the publisher's site if it were handling direct sales, according to the original plan.

In addition, Google said it would place sponsored links next to the text, splitting the ad revenue with the publisher. What would Google charge for of this new marketing opportunity and revenue stream? Absolutely nothing. Major publishers, including Random House, John Wiley & Sons, Simon & Schuster, and others signed up right away to try pilot programs of the service, each sending a few thousand books.

But in December, Google dropped the equivalent of a heavy encyclopedia on the publishers. With no advance notification, the search provider unveiled its Print for Libraries program, aimed at digitizing public-domain books from the likes of the New York Public Library, Oxford University's Bodleian Library, and the libraries of Harvard and Michigan universities. Google said it would make available full versions of public-domain books online, while making only "snippets" of copyrighted text available.

NOT ALL ARE CONCERNED. But in addition to storing the digitized books on its own servers, Google said it would provide digital copies to the libraries. Publishers now worry Google might someday distribute digital copies of copyrighted books without their or the author's approval. The publishers argue that libraries have no legal right to digitize copyrighted material by handing it over to Google.

The mass digitization of library books also raises concerns about piracy. "Nobody has convinced us that this can't be hacked," says Kay Murray, general counsel for the Authors' Guild. "They have to make sure they protect [copyrighted books]."

To be sure, not all publishers are concerned about Google's plan. "I think the big picture with Google is that [the marketing abilities] are a great benefit to publishers and authors," says David Langevin, director of electronic markets for Houghton-Mifflin. Langevin notes that in instances where authors requested to be taken off of the popular search engine, Google complied very quickly.

"HUGE EXPOSURE." Some legal experts, such as Stanford law professor Lawrence Lessig and Harvard professor Jonathan Zittrain, argue that the real rub in this dispute lies in the copyright laws' murkiness. "The fair-use section of [copyright] statute is fairly flexible" says Zittrain. "Google's plan doesn't disrupt the market for purchasing the book, and in that sense it should heavily favor them."

Yet, legal experts also agree that Google's plan could open the door for liability for potential copyright infringement, in the event of future litigation, if the issues being raised by the publishers now aren't settled to everyone's satisfaction. "For registered works it can be up to $150,000 per infringement," says Lessig. "I don't think any judge would do that because Google seems to be operating in good faith...but there's a huge exposure."

In the end, this disagreement comes down to whether the interested parties can come to a peaceful solution -- or fight it out in the courts. Helm is a BusinessWeek Online reporter

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