Microsoft's Copyright Assault on Google

Hoping to convince publishers to back its own online book search service, the software titan comes out swinging against the search giant

Microsoft threw a one-two public relations punch against Google on Mar. 6. The sparring got under way when Microsoft (MSFT) attorney Thomas Rubin publicly criticized Google's (GOOG) position on copyright—first in a newspaper editorial and then later the same day at a publishing industry conference.

The software giant's complaint? Google, in the name of organizing the world's information, is trampling on the rights of content owners. It's true that Google's attitude toward copyright hasn't won it many friends among established media companies. Last month, MTV-owner Viacom (VIA) called out Google for failing to provide better copyright filtering tools on its video-sharing site YouTube, among other things (see, 2/2/07, "Viacom's High-Stakes Duel with Google"). Similarly, several book publishers, including BusinessWeek parent McGraw-Hill (MHP), Penguin, and Viacom's Simon & Schuster, have sued Google over its initiative to make books searchable by digitally scanning major library collections (see, 4/24/06, "Ganging Up on Google").

In an address given at the Association of American Publishers annual meeting, Rubin accused Google of turning its back on publishing partners and "concocting" an interpretation of copyright law that allows it to violate content owners' rights. "In my view, Google has chosen the wrong path for the longer term because it systematically violates copyright and deprives authors and publishers of an important avenue for monetizing their works. In doing so, it undermines critical incentives to create," Rubin said.

Fighting Back

Google's response was to reaffirm its commitment to complying with copyright laws and reiterating what it considers benefits of its services. "The goal of search engines, and of products like Google Book Search and YouTube, is to help users find information from content producers of every size," wrote David Drummond, Google's chief legal officer, in a statement. "We do this by complying with international copyright laws, and the result has been more exposure and in many cases more revenue for authors, publishers, and producers of content."

But Google's executives must have been wondering what they had done to provoke Microsoft's public ire. After all, what does Microsoft gain by picking fights? An obvious, albeit small, benefit is raising awareness of Microsoft's competing book search product. Until Rubin's article in the Financial Times, there was little buzz about Microsoft's Live Search Books, which was launched for testing in December. Google Book Search, on the other hand, has been oft discussed and debated since its launch in 2004. Google does not yet have market share figures, but it notes that it has scanned well over a million books.

Seeking Differentiation

Arriving to market two years after a major competitor is typically a disadvantage for a company, unless its offering considerably improves on the existing product. Clearly, Microsoft believes striking partnerships with publishers could give its product that extra boost. In his speech, Rubin encouraged publishers to work with Microsoft instead of alternatives. "Microsoft is committed to making these decisions responsibly, respectfully, and with the goal of sustaining both artistic creativity and widespread access by consumers to online content. We want to join with all of you in urging other providers of Internet search and online content hosting services to do the same," said Rubin.

To attract those partnerships, Microsoft has developed an interface for its publisher program that Rubin says allows publishers to choose the amount of text a reader may preview, create click-to-buy links next to their books, and edit search data about their books. The tech titan also promises to get copyright owners' consent before digitally scanning the book.

Such promises resonate with allies such as the Authors Guild (AG), which is suing Google over its book search program. "We would certainly endorse most, if not all, of what Microsoft had to say," says Paul Aiken, executive director of AG, an association representing more than 8,000 writers, according to its Web site. Aiken adds that the group would be "open to working with" Microsoft.

Permission Granted?

But how much does Microsoft get from such endorsements, and is Google the worse for rankling book publishers? Google doesn't really need the publishers to agree to digital scans of their work. It is already scanning the books, thanks to its agreements with 13 big libraries, and letting Web surfers search for the work they want. The company doesn't allow users to read copyrighted library books online. It only provides a few lines of text and the title, publisher, and copyright information necessary to get that book from a local library, book shop, or online store such as Amazon (AMZN). Google shows several-page excerpts from copyrighted books only when it has publishers' consent.

Microsoft's punches could pack a wallop if Google loses its lawsuit with several publishers. In that case, Microsoft's bid for publisher affection could have significant benefits. Google could be forced to stop scanning books without express consent. Then publishers could potentially give permission to Microsoft while shunning Google's service, giving the former a selection advantage. A publisher victory means "one gets the content and the other one doesn't," Aiken says.

But Google has more legal ground to stand on than Microsoft may think, says Electronic Frontier Foundation attorney Fred von Lohmann. For a judge to rule that Google's digitizing content is not "fair use" and compliant with U.S. copyright law, lawyers would have to prove that Google Book Search is harming the market for the original content. A short excerpt, says von Lohmann, shouldn't keep someone from buying a book. In fact, he thinks it should entice them to go to the library or make a purchase. "I certainly hope that, when the dust settles on this lawsuit, people won't remember the copyright lawsuit—they will just remember that Google opened the doors for what will ultimately become the greatest thing since the Library of Alexandria," says von Lohmann.

Aiken argues that the market could potentially suffer if, say, the excerpts spoil the ending of books or, in the case of reference-type books, give people the information they want without requiring purchase of the whole text. Publishers also say courts should set a permission precedent to keep other would-be Googles from making digital copies of works (see, 10/20/05, "Google's Escalating Book Battle").

Until the lawsuit is resolved, though, Microsoft may have to just resort to public jabs—and hope that some of them land where it hurts.

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