The real reason for Google’s news-wire deal

Publishers: Be careful what you wish for. Journalistic organisations and news agencies have complained that Google has benefited from their headlines (while I argue it is they who have benefited from Google’s links). So the Press Association, the Associated Press, Canadian Press, and Agence France-Presse just forced the search engine to license their content. Now, rather than linking to the wire services’ clients for their articles, Google News is displaying the agency reports in full on its site.The victory is Pyrrhic. For the agencies have transformed Google into what it was not, into what they and their clients should most dread: Google is now a content company. It is a competitor not just for ad dollars but for readers’ attention. The deal also reveals the weakness of the wire services’ business on the internet. The press agencies forced Google into the old-media model they understood – wire services aggregated the news and then syndicated it. So they wanted to sell content to Google. But the link makes syndication obsolete. Why should 10,000 sites run the same wire story when they can all link to it? The link is more efficient. And Google is the new aggregator. It is a platform, a connector that hooks together readers with the information they want, and if you are a provider of that information and know how to profit from the traffic search sends, you are in luck.
http://media.guardian.co.uk/mediaguardian/story/0,,2165618,00.html