Google strikes deal with Associated Press
Last Updated: Monday, August 30, 2010 | 5:16 PM ET
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Google Inc. has struck a licensing deal with The Associated Press that will allow it to continue posting content from the news service.
The deal was announced by AP Monday after months of sometimes thorny negotiations. Financial terms and the duration of the contract were not disclosed.
"We think this is a good deal for both sides," said Jane Seagrave, AP's chief revenue officer. "We have had a long relationship with Google and are pleased we were able to work out our differences."
Google began to pay for AP's content in 2006 after the not-for-profit news agency threatened to sue. That contract expired in January but was extended while the negotiations on a new deal progressed.
The two have had an uneasy relationship, with AP saying it was not adequately compensated and Google at one point threatening to stop hosting AP content.
Under the deal announced Monday, Google said it intended to help AP find more ways to make money online while striving to create a better experience for users, but neither company provided further details on their plans for co-operation.
Google also has signed contracts with The Canadian Press, Agence France-Presse, U.K. Press Association and other outlets.
Under these licensing agreements, Google publishes entire stories from The Canadian Press, The Associated Press and other outlets in the news section of its website.
That's a departure from Google's usual practice of just showing snippets from stories posted on thousands of other websites, some of which pirate content from news services.
Google maintains those excerpts qualify as "fair use" under U.S. copyright law, exempting the company from having to pay any licensing fees.
The Google deal is part of AP's effort to bring in more revenue from the web to help offset a drop in revenue from newspapers and broadcasters that have been hard hit by an advertising slump.
As part of that process, AP renewed its licensing agreement with Yahoo Inc. earlier this year and is trying to strike a new deal with Microsoft Corp.
The 164-year-old non-profit agency gets about 40 per cent of its revenue from U.S. newspapers and broadcasters, but that could fall as more readership and advertising migrate to the internet.
AP's revenue declined nearly 10 per cent last year to $676 million US, and management anticipated another drop this year as it cuts fees for newspapers and broadcasters. The financial slump prompted AP to lay off about 90 employees from its news staff late last year.
Google earned $6.5 billion US on revenue of nearly $24 billion last year and its net income is up by more than 30 per cent so far this year.
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