So why is Google News still (seemingly perpetually) in “Beta” testing? Because they can never, ever, make any money from it.
The concept, of course, is fiendishly simple:
When Google launched its news site three years ago, it led to a certain amount of hand-wringing at Yahoo News, MSNBC and CNN. Unlike its competitors, which were forced to budget millions of dollars a year to license up-to-the-minute content and pay reporters and editors, Google had figured out a way to do it on the cheap.
By relying on algorithms, Google News completely automated the news-gathering process. High-speed computers sift through some 7,000 sources of information — 4,500 of them in English — and determine which are the most relevant articles. They then grab the headline and first paragraph to post on Google’s news page, with the headlines acting as external links.
[…] With a clean, no-nonsense interface and existing search engine traffic, Google News didn’t take long to attract a loyal following and elbow its way into the top-10 news sites, pulling in some 6 million unique visitors a month. Of course, executives at rival online news publishers couldn’t help but wonder why they shouldn’t just imitate Google’s model and pare their budgets to the bone.
So, what’s the problem? Well — if you make money off of someone else’s content, you’re really supposed to pay for it.
So while other online publishers like Yahoo News and MSNBC earn tens of millions of dollars in revenue each year and continue to grow, Google News remains in beta mode — three years after it launched — long after most of the bugs have been excised.
The reason: The minute Google News runs paid advertising of any sort it could face a torrent of cease-and-desist letters from the legal departments of newspapers, which would argue that “fair use” doesn’t cover lifting headlines and lead paragraphs verbatim from their articles. Other publishers might simply block users originating from Google News, effectively snuffing it out.
Which probably makes sense, leaving Google News as a (hopefully ongoing) free source of info, uncluttered by ads, that generates goodwill and click-overs for its aggregator and click-throughs for its subjects.
(via J-Walk)