Google Settles Book Suits to Gobble Up Another Market
Google Inc. will pay $125 million to settle two copyright lawsuits by publishers and authors over its book-scanning project, a “historic” deal that the company said will make millions of books searchable and printable online.
The owner of the most popular Internet search engine said the agreement will expand the Google Book program to let online readers search for and buy copyrighted and out-of-print books in whole or page-by-page, and provide U.S. libraries with free access to the database.
“The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips,” Google co- founder Sergey Brin said today in a statement, calling the accord “historic.”
The Author’s Guild and members of the Association of American Publishers sued Google in 2005, claiming the book program’s digitizing process infringed copyrights on a massive scale. The project, which began in 2004, includes Harvard University, the New York Public Library and about 10,000 publishers in an effort to make books searchable online.
Today’s deal, which must be approved by a judge in Manhattan federal court, ends the lawsuits and expands what users find online when they search for a book. Searches in the Google Book program currently generate about three or four lines of text from a work. The settlement will expand the results to several pages and let readers buy full access to the content, the parties said.
Publishing Adversaries
Google and its former publishing adversaries will use $34.5 million of the settlement fund to create a registry program to compensate rights holders, according to court papers. Another $45 million will be used to compensate authors whose works have already been scanned without permission, the parties said.
Authors and publishers will have final say on whether their copyrighted works may be used by the program, and thus essentially allow online purchases to compete with book sales, David Drummond, Google’s chief legal officer, said.
“We’ve built a lot of controls for authors and publishers,” Drummond said today in a conference call. “If an author does not want his or her book to be in the program, they absolutely can opt out.”
Under the deal, Google will keep 37 percent of revenue from online book sales and for advertisements that run next to previews of book pages, passing the remainder to the Books Registry, which will keep an administrative fee and leave the rest for the copyright holders to collect. Google won’t share advertising that runs along search results that include links to book preview pages.
Subscription Program
The division of revenue from a subscription program for universities will be similar, the parties said on the conference call. The companies haven’t determined exactly how to distribute revenue under the subscription program, the companies said.
Google said the program will create a new market for out-of- print books. The company’s measurement of readership may include the amount of time spent viewing a book, along with the genre and publication date, according to Drummond.
“It’s always been our objective to have more than Web content in the index, especially books,” Drummond said. “Books are authoritative content. It’s higher-quality content, in general, than what’s on the Web and it’s just a fantastic thing to have for users.”
In May, Microsoft Corp., the world’s biggest software maker, ended a program that let Web users search through digital versions of books, ceding the market to Mountain View, California-based Google, which already has about 7 million books scanned.
All Revenue
Google, which gets almost all of its revenue from advertisements that run alongside search results, needs to seek ways to branch out into other types of sales, said Mark May, an analyst at Needham & Co. in New York.
“It’s a direction that Google will have to move towards, pursuing non-advertising ways of monetizing the content they have,” said May, who advises buying Google shares. “At some point they’re going to start being a distributor of premium content that can’t be subsidized by advertising alone.”
Google rose $4.33 to $333.82 at 12:35 p.m. in Nasdaq Stock Market trading.
The cases are The Author’s Guild v. Google Inc., 05cv8136 and the McGraw-Hill Cos. v Google Inc., 05cv8881, both U.S. District Court for the Southern District of New York (Manhattan).
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Filed under: Google News, Random Reading Tagged: 05cv8136, 05cv8881, american publishers guild, do no evil, google, greedy google, McGraw-Hill Cos. v Google Inc, New York Public Library, The Author's Guild v. Google Inc
