Monday, May 11, 2009

Here's The Google Plan: To Give Users Links To NYT/WashPost Articles Without Asking, And Sell Ads Against Them.

Wondering what Google has been discussing with the NYT and the Washington Post? Here's the answer.

The world's most powerful search engine will -- within the next six months -- give Googlers links to NYT and WP news stories based on an algorithm that uses searches, purchases and other components to calculate what users want.

Of course, Google plans to sell "premium" advertising against this "premium" content. Will it share the revenues with the news providers? No. Instead, it calculates that the NYT and WP will make enough money from adverting rates that reflect the increased hits its plan will generate.

The specifics of Google's plans were revealed nearly a month ago on a website run by former NYT entertainment reporter Sharon Waxman, called The Wrap -- itself a website supported by investment and advertising, and devoted to coverage of Hollywood.

In an interview with Google chairman and CEO Eric Schmidt -- conducted in the living room of Arianna Huffington's Brentwood home, at a book party -- Waxman extracted the news of Google's plans:

I asked [Schmidt] if the rumors I’d heard, that Google was changing its mind about getting involved with creating original content, were true.

No, he responded, quite convincingly, they’re not. Google is not a content company, and is not going in that direction, he explained.

But Google does have plans for a solution. In about six months, the company will roll out a system that will bring high-quality news content to users without them actively looking for it.

Under this latest iteration of advanced search, users will be automatically served the kind of news that interests them just by calling up Google’s page. The latest algorithms apply ever more sophisticated filtering – based on search words, user choices, purchases, a whole host of cues – to determine what the reader is looking for without knowing they’re looking for it.

And on this basis, Google believes it will be able to sell premium ads against premium content.

The first two news organizations to get this treatment, Schmidt said, will be the New York Times and the Washington Post.

Does the New York Times make more money from this arrangement, I asked? No, Schmidt confirmed, it won’t. But by targeting the stories that readers will want to read, it will get more hits out of the stories it has, which will drive its traffic and ultimately support higher advertising rates beside the stories.

Sorry, Brian Stelter and Howard Kurtz. Looks like Sharon Waxman and The Wrap got there first.

If the Waxman-reported Google plan goes forward -- and why wouldn't it? -- it's hard to know how much money it will mean to the NYT's bottom line. But right now, the big winner would appear to be Google, with the newspapers desperately trying to wrangle as much money as it can from search engine's inevitable use of its content as an advertising lure.

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