Open Letter To Google

Hey, Google, I just wanted to compliment your chief strategist, whomever s/he may be.

I am agog . . . or perhaps a-google . . . with admiration for the way you've been playing your cards lately.

I've been writing about your company for nearly three years, but my interest and admiration climbed to a new zenith recently.

On October 30, 2007, the Wall Street Journal reported:

In recent months Google has approached several U.S. and foreign handset manufacturers about the idea of building phones tailored to Google software . . .

A few days later, the the Los Angeles Times also ran a story, saying there had been rumors circulating about an upcoming Google phone, and Google had acknowledged it planned to bid in the January, 2008 FCC auctions for a piece of the wireless spectrum.

On December 27th, I posted this prediction from media pundit Thomas Ordahl:

Google stirs up telecom. Google has been rattling its saber about the January spectrum auction, to the tune of at least $4.6 billion. . . Whatever the auction's outcome, Google's participation will shake up what has become a very staid game.

I gotta say, Google, you played your cards beautifully. In exchange for putting up that minimum bid of $4.6 billion (I'll admit that b gave me pause, but you were way ahead of me), you got agreement from the FCC to keep certain sections of the airwave spectrum free for anyone to have access.

All those rumors you'd been fueling prior to the auction scared the #1 and #2 telecom carriers into making record bids in order to bolster the Internet services they offer on mobile phones.

I reported in March that Verizon Wireless, the #2 carrier, had agreed to pay more than $9 billion for the largest pieces of the spectrum. AT&T Inc., the #1 carrier, agreed to pay more than $6 billion for their pieces of the spectrum.

Meanwhile--after panicking everyone--you never made a bid beyond that minimum demanded by the FCC to get a seat at the table . . . and the FCC's agreement to leave a part of the spectrum open. You got what you needed--airwave access--and forced the two biggest carriers into a bidding war without participating in that bidding war yourself.

Very, very nicely played.

Now you're about to do the same thing to the publishing industry that you just did to the telecom industry. Please note, I said "to do the same thing to the publishing industry" rather than use the less polite terminology that sprang to my mind. My mother would be scandalized by such graphic language.

Long-time readers of this blog will remember that, shortly after you announced your Google Print Library program in 2005, the Authors Guild, the Association of American Publishers (AAP) and five major New York publishers sued Google for copyright infringement.

I lost respect for the Authors Guild in general and for Pat Schroeder, the president of the AAP, in particular because they hadn't even bothered to do sufficient research to understand the issues before mouthing off in public. If they had done a minimum of research, they would have realized that the Google Print program had two components. What was originally called Google Print is now called Google Book Partners. What was originally called Google Print Library is now called Google Book Search.

Pat Schroeder repeatedly confused and mixed elements of the two programs in her public statements. If little ole me could sort out the details while sitting in my house in north Texas, why couldn't the prez of the Association of American Publishers do the same thing before knee-jerking a response?

Rather than traverse territory I've been over again and again ad nauseum, I'm going to direct readers to an article here that appeared in the 11/8/05 edition of USA Today, which did an excellent job of explaining the issues.

Yesterday, the latest edition of The New Yorker came out. It contained a lengthy article by Jeffrey Toobin that picked up where the USA Today article left off.

To cut to the chase, that 9/20/05 lawsuit against Google has been winding its way through the legal system for nearly three years. Toobin said:

However, most people involved in the dispute believe that a settlement is likely. “The suits that have been filed are a business negotiation that happens to be going on in the courts . . .

But a settlement that serves the parties’ interests does not necessarily benefit the public. “It’s clearly in both sides’ interest to settle,” Lawrence Lessig, a professor at Stanford Law School, said . . . Google wants to be able to get this done, and get permission to resume scanning copyrighted material at all the libraries. For the publishers, if Google gives them anything at all, it creates a practical precedent, if not a legal precedent, that no one has the right to scan this material without their consent. That’s a win for them. The problem is that even though a settlement would be good for Google and good for the publishers, it would be bad for everyone else.”

What Lessig is pointing out is that this suit against Google will have long-term consequences on the publishing industry. Google is happy to settle--just like they were happy to pay the FCC that minimum bid. By settling, Google gets to go back to scanning books and, at the same time, creates a precedent that will help prevent new competitors from springing up.

“If Google says to the publishers, ‘We’ll pay,’ that means that everyone else who wants to get into this business will have to say, ‘We’ll pay,’ ” Lessig said. “The publishers will get more than the law entitles them to, because Google needs to get this case behind it. And the settlement will create a huge barrier for any new entrants in this field.”

So, now, any future competitor to Google Book Search will not only have to take on the enormous expense of scanning the world's books, but also agree to pay the publishers for a listing in a giant card catalog. A giant card catalog that does nothing but benefit those same publishers (and their authors) by drawing attention to their books.

The likelihood that any company will be able to afford to pay scanning costs as well as pay publishers a licensing fee is very slim.

Additionally, what isn't often talked about is that the libraries that are cooperating with Google in their Book Search program are agreeing to a devil's pact of sorts. In my blog of October 30, 2007, I said:

Google is, first and foremost, a commercial venture. While it is scanning books for free, it does so in order to increase the value of its own search engine.

In exchange for providing free digital copies to libraries, it demands that those institutions not open their doors to Google's competitors in the search engine business.

While I understand Google's position from a business standpoint, it dulls the sheen on their company motto: "Don't be evil." It's also a reminder that no matter how friendly the huckster at the door is, we need to always read the small print in the contract he offers.

In other words, Google has taken advantage of the publishers' lack of foresight . . . and of the Authors Guild and Pat Schroeder's narrow-mindedness . . . and of libraries' limited resources . . . in order to insure Google will be the ONLY player in the Book Search game.

Very well played, Google.

And, because I'm feeling pissy right now (sorry, Mom) let me point out that this is exactly the same thing Amazon is doing to online retail.

Google and Amazon are setting themselves up to be the only players in their respective games and the publishing industry--God love 'em--is helping them to do it.

Maybe Google and Amazon deserve to dominate the industry. The people who are running it right now are obviously too short-sighted to handle the job.

You can read the entire New Yorker article here.