Oops, Newspaper Association of America Distances Itself From The World Association of Newspapers Diatribe on the Google/Yahoo Ad Venture

Philip M. Stone September 18, 2008

To an outsider it seems really embarrassing although to the World Association of Newspapers (WAN) it’s nothing. WAN got more publicity around the world for its communiqué this week blasting the proposed Google/Yahoo advertising venture than it had for almost anything it has done before, but within hours the Newspaper Association of America (NAA) issues a curt one sentence statement saying that its board of directors has taken no position on what Google and Yahoo are up to.

Now to ftm, that this week wrote a long piece about the WAN communiqué, that sounds like the Americans, based in Arlington, Virgina, near Washington, are distancing themselves from what WAN, headquartered in Paris, not near Washington, has said about what is basically a North American issue since the Google/Yahoo deal would only be effective on that side of the Atlantic (although EU regulators have announced they’re going to take a look anyway).

We put that point to Timothy Balding, WAN president, who naturally dismisses such thinking out of hand. “I wouldn’t say that NAA is ‘distancing’ itself from our statement,” Balding said in an email exchange. “John Sturm (NAA president) is just stating a fact: the NAA Board, he says, has not taken a position on the issue. In my book, that’s called a simple clarification. And yes, NAA was indeed advised ahead of time of our statement and told us the same thing.”

But is it really as simple as that? WAN issues communiqués all year round damning this or that, yet the NAA doesn’t issue following statements that its Board of Directors hasn’t taken a formal position on that subject. No, this is something special. The NAA statement said in its entirety, “While NAA is a member of WAN, I would like to clarify that the NAA Board of Directors has taken no position on the proposed advertising partnership between Google and Yahoo.” Why would Sturm make such a “clarification”?

Could it be that US newspapers are very anxious to have a very healthy independent Yahoo and if the advertising tie-up with Google ensures that then so be it? After all, near 800 US newspapers belong to the Yahoo Newspaper Consortium under which newspapers post their employment classifieds on Yahoo’s HotJobs site and they can use HotJobs technology to run their own online job ads. Many of the major US chains are part of the consortium and the industry must like what it sees since the number of members has quadrupled in less than two years, and there are plans to extend activities within the consortium.

So, not much merit there in biting that particular hand that feeds you.

Those outside the US see Google in particular as the great newspaper villain, abusing copyright law, not paying newspapers for what it uses, and, worst of all, not signing up to the new ACAP system developed by WAN and other media groups that places restrictions of what search engine robots can and cannot access.

But in North America the view is not so vitriolic and there is the feeling that if WAN gets involved in what is primarily a US issue then it should have the support of its primary US member. Difficult to believe that WAN would go out of its way to step on the NAA’s toes, but as Balding told ftm, NAA were told ahead of time, and NAA responded it had taken no stance on the issue, yet WAN went ahead with its statement anyway. That sounds like toe-stepping no matter how you describe it.

The New York Times under its headline “Newspapers Worldwide (Minus U.S.) Oppose Google-Yahoo Deal” noted, “The NAA’s views are important here because the Google-Yahoo partnership is limited to the United States and Canada. The views of U.S.-based newspapers are likely to be given special weight by regulators, as they are the publishers who will be most affected by the deal.”

But if nothing else, WAN gave Google something to think about, and in its story The Times picked up a lot of the WAN statement so its views certainly have gotten  a US airing.  So it’s probably no coincidence that Google rolled out its chief economist who took issue with the Searchignite report issued in July that claimed that under the deal the cost of buying keywords on Yahoo would jump by an average 22% -- such increases being one of WAN’s fears.

But economist Hal Varian countered, “The report fails to acknowledge that ad prices are not set by Yahoo or Google, but by advertisers themselves, through the auction process. Since advertisers set prices themselves via an auction, the prices must ultimately reflect advertiser values. That process will remain completely unchanged by our agreement.”

Of course the Google line is that the pact will increase competition and help Yahoo remain independent. Will the US Department of Justice agree and, more importantly, if  Justice wants to know the NAA’s views, what  will they be? The NAA cannot sit on the sidelines of this matter for much longer.