Three Large US Newspaper Companies buy 75% of News Aggregator Topix Where New York Times Pays to Have Its News Prominently Displayed,
But AFP Sues Google For Printing Its News Without Permission. Who Has It Right?

Philip M. Stone March 24, 2005

Talk about two opposite ways of treating the power of news aggregators: Knight-Ridder, Gannett, and Tribune combined to each buy 25% of Topix.net that aggregates news from about 10,000 online sources. The New York Times believes having its news displayed on Topix is so important that it struck a deal last month to pay for the privilege. And yet Agence France Presse (AFP) far from happy having its news displayed at no cost to itself but without its permission on the larger Google News has sued for damages and wants the practice stopped. How come two such diametrically opposite approaches?
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It’s all to do with those two magic words – wholesale and retail. AFP is a news wholesaler. Its clients are NOT you and me, but rather media entities that republish AFP news for you and me.

Take a look at afp.com and the first thing you may notice is that it is NOT advertising supported. Its site is aimed directly at media organizations for the purpose of selling its various products to those entities. For instance, AFP has a commercial arrangement with Yahoo and certain parts of its news are available to you and me via Yahoo sites.

So when Google says it shows only the first 30-40 words of an AFP story and then if the reader wants more they are sent to the afp site then that really doesn’t help AFP.  It can protect its own news server from the Google crawl by adding code to its robot.txt files, but what about the 600 or so online subscribers who buy AFP news. If the Google robot hits their sites then that AFP news will appear on Google.

AFP is concerned that Yahoo, and other subscribers, could start asking why they should pay AFP for its news if Google makes much of that news available, anyway, via Google News? Since for structural reasons AFP is not about to turn into a news retailer, it has to defend its online wholesale business.

That news agency online policy is diametrically opposite to its arch competitor, Reuters. Much of the Reuters news product is available on its own advertising-supported reuters.com. The site makes a healthy profit and management has targeted it as a major profitability growth center over the next few years. 

Even if they haven’t said so publicly, Reuters and the Associated Press are probably very happy to see that AFP lawsuit hit Google. No news agency likes to see its news copy picked up without permission and without payment.

Although Google had been asked several times before the lawsuit to withdraw the AFP copy it had not done so. Now the suit is filed Google says it will withdraw the AFP material, but AFP says it is keeping to its $17.5 million claim for damages already caused. The US lawsuit followed one AFP filed against Google in France a couple of weeks previously for the same reasons.

AFP has a proud history as the world’s oldest international news agency, founded in 1835. But in the years following World War II it has been dogged by its ownership structure  -- it has an independent status with autonomy from the French state – but it relies on the French government entities for more than 40% of its annual budget via subscriptions to its news service. AFP management get very irritable if one labels that a state subsidy!

It has an independent board of directors made up of its major French clients, but that causes financial problems because the board keeps the rates to French subscribers artificially low. Furthermore the board doesn’t want AFP competing with what the French media may be doing on the retail side. Management tried to change its structure a few years back to make it more competitive within the media revolution of the past few years, but the unions protested, threatened work stoppages, management backed down, and threw away the plans.

Since it is stuck within its narrow confines of what it can and cannot do, management over recent years has put much effort into growing the international business, and AFP has been particularly successful in Asia. Its English language revenues now must be very close to what it receives for French language services.

But for the three American newspaper groups to buy into Topix.net the situation is completely the opposite.  The three groups operate about 140 web advertising-supported sites which have about 30 million unique visitors monthly. There will be cross promotion between those sites and Topix, which now has about 1.4 million unique visitors monthly (compared to 5.9 million for Google News), each driving traffic to one another.

The companies also jointly own several web sites for which there will be convergence. For instance, a Topix page about hospitals could include listings from CareerBuilder.com for jobs in the medical profession.

It’s all about increasing page views – sending the visitor from one site to the other. The New York Times is very pleased when visitors are sent from Topix to the Times’ web site to read the whole story, something in which AFP has no interest.

While similar to Google News, Topix operates differently – about half of its requests are for local news that can be tailored to a visitor’s postal code. It syndicates its news feeds to other sites such as Ask Jeeves,

Topix has just nine employees. It launched a year ago and makes about $1 million from advertising, tailored to the news selected..

The purchase price was not released but analysts in Silicon Valley believe the price to be around $5 million, although a couple of analysts believe there could be a zero missing from that figure.

The deal marks yet another expansion by traditional media groups into online products. Earlier this year The Wall Street Journal completed its purchase of Marketwatch.com  for more than $500 million, and the New York Times bought About.com. for $410 million.

With growth stagnating in the traditional print product, the US media are giving a whole new meaning to, “If you can’t beat them, join them” As for AFP, “If you can’t join them, sue them.”

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AP Helps Topix Identify An AP Story’s Originator - May 27, 2006

When three of your largest owners (customers) just happen to run a floundering search engine, and they ask your help in making that search engine more useful to not just the general public but also to other owners (customers) then really all you can do is say “Yes.”

And that’s what the AP said to Gannett, Knight-Ridder, Inc. and Tribune, Co., 75% owners of the Topix search engine.

The problem was this: Go to a search engine to look up a specific story and you could well find that same story listed in many newspapers, because it is a story the AP picked up from one of its members that is then used by many other members. But which member originated the story?

The AP will now begin identifying from where it picks up its stories so that Topix can identify the originating source and send readers there.

It’s a win-win for the Topix owners. The AP’s move makes their search-engine more useful and also it’s a good bet that many AP stories are picked up from newspapers owned by the Topix owners, which means they’ll be driving more traffic to their own newspaper web sites, up go the page views, up go the advertising rates!

That’s all well and good but what the Topix owners really need to do is to get more eyeballs in front of their web site. According to Nielsen/NetRatings Topix in April had only 2.7 million visitors, about one-tenth of Yahoo’s news site traffic.