• by Mark Naples , August 12, 2005

I think about this from time to time, especially when people who do business with what has become the 800-pound gorilla in the room tell me how unpleasant their experiences are. Could Google be starting to tilt toward more difficult windmills?

Google built its enormous business by enabling consumers to better search the Internet. Recently, there has been more disclosure about the company's larger ambition -- to search all of the world's information.

Of course, this means information well beyond the Web, where the road gets dicier. Late last year, Google started recording TV programs airing near its headquarters without asking permission from program owners or stations. In January, Google released a test search service (video.google.com) that lets users search for a keyword -- say, "Joseph Jaffe" -- and view still images and partial transcripts from TV shows mentioning that keyword.

Of course, television networks and media groups that own the networks immediately called for Google to back off. Google says it is within its rights, legally, to record the programs and display the search results without permission because in this instance it is only showing still images and text excerpts. With proper citation, it may also be within its rights legally to show clips, as long as revenue is shared via deals made a priori. That's where the networks see this going. But, Google isn't treating the networks as partners. As The Wall Street Journal reported in June, Larry Kramer, president of digital media at CBS, said, "We're not just going to give this away for free."

It's as though Google is thinking that it's easier to beg forgiveness than to ask permission while they push the frontiers of intellectual property law. The company continues to grow at an extraordinary pace and has a market capitalization of $78.5 billion, far more than Viacom's $56 billion cap, despite the fact that Viacom had seven times more revenue last year than Google did.

Obviously, analysts see these companies, like many in our space, heading in different directions. In fact, almost anyone I speak to sees Google succeeding in broadening its search business along the lines described above, as well as into areas we haven't considered yet.

These facts all point to the respect that so many of us have for the company. I've certainly praised them in this space plenty. But, Google's attempts to search other information -- starting with books, TV, and scholarly works -- promise to be far more costly and time-consuming than the simple Web searches that propelled its first years of growth. While Web searches can be easily automated, keeping labor costs low and margins high, as well as converting older TV programs and hard-bound books into digital form is difficult and time consuming. Humans have to screen these materials - no matter how much technology is involved.

More problematic is the issue of copyrights. Courts generally permit "fair use" of excerpts such as quotations from a book in a book review, or the sort of two-line précis that appears in a query response. But when it comes to areas such as online video, the law remains blurry. Legally speaking, Google is playing a role somewhere between a newly arrived land grabber in the Old West and the rancher who has the most cattle they need to graze. As aforementioned, they are pushing the legal envelope, and it seems that the company can't be stopped.

The Association of American University Presses, a trade group of 125 publishers, warned Google that its plan to digitize millions of books in university libraries and the New York Public Library represents "a fundamental, broad-sweeping violation of the Copyright Act."

Major publishers such as Random House Inc. have also contacted Google with their concerns. I wrote last spring, (before the temperature was 95 degrees every day) about the lawsuit filed in U.S. District Court for the District of Columbia against Google by The Agence France-Presse (AFP) news agency over the Google News site. That site offers short excerpts of news articles and small photographs along with links to outside sites that carry the full articles. AFP says Google's use of those excerpts and pictures violate its copyright. "Google respects the rights of copyright holders," it said in a statement last spring.

So, with major, global broadcast and print media companies already getting their legal ducks in a row against Google and arming themselves for the onslaught against their content, let's see how much - and how quickly - the little search engine that promised better results can continue its growth. I fear that the next year or two will be filled with litigation and conflict, not with innovation and growth for our markets. Let's see what that means for companies entering the market segments Google has been dominating.