Monetizing The World’s Information

The Financial Times wrote today on the ambitions of Google Book search and the dangers that the GBS poses.  As the piece notes, and we have long argued,  approving the Google Book Settlement and handing Google a monopoly would “make it a dangerous threat to competitors.”  While Google likes to talk about their voracious scanning (15 million books at last count) in the frame of its stated corporate mission (“to organize the world’s information”), the fact of the matter is that, in practice, Google is monetizing the world’s information.

Google loves to tout its digital smorgasbord of products and services, but doesn’t like to talk about the fact that 98% of its astounding revenues come from advertising, and more specifically, directed advertising targeted at Google users based on information that Google collects about them.  In reality, Google users aren’t the “customers” – Google’s users are the “product” that Google sells to advertisers.  Google Books is no exception.  The Financial Times writes, “imagine much cheaper e-books that contain real-time embedded ads – flights to Sweden in the margins of a Stieg Larsson book, for example,” and that Google will “be able to sell all the in-copyright but out-of-print books it has scanned too, and subscriptions for the whole shebang to libraries and universities.”

On a separate, but related, matter, The New York Times editorialized on Google’s proposed acquisition of ITA Software (a leading provider of air travel search software), arguing that “Google cannot abuse its dominance in search to shut out the competition.”  These concerns are equally applicable to the GBS – a Google monopoly, whether over books or over travel, and whether acquired by an abuse of the class action process or by purchasing another company, is bad for competition and bad for consumers.

Everybody But Google Knows it’s a Monopoly

Over the last week, Steven Pearlstein of the Washington Post and Google have been engaged in a back and forth over Google’s monopolistic behavior.  Of course, Google claims that it is not a monopoly (notwithstanding the fact that the French, among others, disagree).   But as Pearlstein accurately notes, Google isn’t just a search engine any more: “In addition to online advertising, it’s moving into operating system and application software, mobile telephone software, e-mail, Web browsers, maps, and video aggregation. It’s also in the process of assembling the world’s biggest digital library of books and visual materials” and in his reply to Google’s post, concludes that “Google’s aggressive acquisition strategy, combined with its dominance, makes [open competition] unlikely. The tipping point has now been reached.”

The online community is just now beginning to realize what opponents of the Google Books Settlement have known for some time: Google has a long history of leveraging its position as the world’s dominant search engine to move into new markets in a way that is detrimental to the spirit of free and fair competition.

Google likes to assert that when it moves into new markets, such as digitization of books, it does so on behalf of consumers – but as followers of the GBS are well aware, Google’s motives are not as pure as it would have you believe.  Fundamentally, as we pointed out last week, what Google is trying to do is in reality a “commercial venture that aims to monetize millions of out-of-print books….”  And the Wall Street Journal writes this week that the monetization of “Google’s controversial trove of digital books” has already begun.

The GBS, if approved, would give Google monopoly control over an exclusive trove of digital content from their unauthorized scanning exploits.  As we have always said, the GBS is abusing the class action process to approve a deal negotiated in secret for years to serve private, not public, interests.  In contrast, the Library Journal reported this week that there is a new effort underway to bring disparate stakeholders together in an open and collaborative process to find common-ground solutions to digitization issues.  As one of the leaders of the effort said, “the idea is to create a big tent where lots of people can work hard toward a public-spirited solution . . . . It’s not a competitive effort. It’s meant to be complementary to its core.”

Digitizing the world’s books is an admirable goal and is one that we share.  But it is essential that the process is open and maximizes benefits to citizens, scholars and students – not the commercial interests of a single company.

The GBS “Shopping Mall” Vision, Realized

Today, Google launched its new Google eBooks venture, described by the Wall Street Journal as “an extension of Google Books, a book-search site linked to company’s main search engine” that is a strategy to “open up a new stream of revenue outside of online advertising.”

This news – and the Google-speak attached to it – underscores the fact that while Google and its partners in the proposed Google Book Settlement have always tried to wrap the initiative up in altruistic themes like “A Library to Last Forever,” GBS watchers have always known that the settlement was about more revenue and profits for Google.

Reading Ryan Singel’s coverage, we were reminded of the wisdom of Pam Samuelson’s “Google Books is Not a Library” piece in the Huffington Post in response to the Sergey Brin column.  Samuelson clarifies that, “Unlike the Alexandria library or modern public libraries, the Google Book Search initiative is a commercial venture that aims to monetize millions of out-of-print books….”  Samuelson, a law professor at UC- Berkeley , sums up her view this way:  “Anyone aspiring to create a modern equivalent of the Alexandrian library would not have designed it to transform research libraries into shopping malls, but that is just what Google will be doing if the GBS deal is approved as is.”

This “shopping mall” observation is no hyperbole.  You just have to look at all the various ways in which Google can and will monetize on the corpus of books that it is scanning as part of the Google Book Settlement.  From book sales, to advertising alongside Book Search results, to the uncharted (and un-enumerated) territory of “non-display” uses, driving revenue is the priority.

Another kernel buried in the Google-speak is that fact that Google continues to scan books without clear copyright protection at an astounding pace.  We’ve highlighted before that their scanners can handle over 1,000 pages per hour, and Google now reports that they have scanned 15 million books since 2004 – that’s up from 12 million books in February of this year.  This massive scanning campaign is one the greatest advantages that Google enjoys as the world awaits a final court decision on the proposed settlement.  As the Department of Justice has also pointed out, the fact that potential book scanning competitors have decided to follow the letter of copyright law should not give Google a competitive advantage.  But 3 million (or 15 million) books later, here we are.  As Singel reports, a whopping 2.8 million out of the 3 million books available through the Google ebookstore are actually the product of this scanning.

One final word of advice to Google, maybe you should move Google Books and the Google ebookstore where it belongs on your homepage – under the Shopping tab.