This past week the Italian antitrust authority (Autorità Garante della Concorrenza e del Mercato) conducted a search of Google’s Italian office and announced it was beginning an investigation into Google’s possible abuse of its dominant position in the Italian search engine market. The case was triggered by a complaint from the Italian Federation of News Publishers, FIEG (Federazione Italiana Editori Giornali). FIEG represents publishers of newspapers and magazines, together with press agencies.
So what’s the problem?
The news industry has struggled since the mid 1990s to figure out a profitable internet strategy. “Free” content needs to be supported by advertising revenue, yet poorly targeted banners and the like don’t pay much. Google’s indisputable success as an advertising powerhouse1 has captured the press’ attention.
In 2006 the Belgium press association Copiepresse initiated a case against Google for copyright infringement and won. Google had to publish the judgment on their home page which they did in small print. The victory proved to be a poisoned chalice – Copiepresse members suffered significant traffic declines once Google complied with their request to remove the sites from Google’s index.
In the US, newspaper revenue has been in decline for years and efficient online classified advertising, such as Google’s AdWords, has only helped expedite the process. US publishers, led by the AP in particular, have been clamoring for Google to share some of Google’s revenue with them. Google has demurred, citing “fair use” clauses in US copyright law.
Now, the Italian press association has decided to attack Google, modifying their strategy to fit local conditions.
What’s FIEG complaining about?
FIEG’s concerns are outlined in section II of the Antitrust authority’s formal complaint investigation2 document. In short, Google’s criteria for ranking news results aren’t transparent. In addition, Google doesn’t allow news publishers to determine which stories appear in Google News. Yet it is only the final paragraph of section IV that states clearly what appears to be the real issue in Italy; rather than a concern about copyright violation, FIEG fears Google as a competitor in the online advertising market.
Are FIEG’s concerns legitimate?
If FIEG’s concerns are addressed on merit, I’m afraid their complaint should be dead on arrival. Let’s look at the main points to see why.
Google News ranking not transparent?
Paragraph 3,the first of the complaint, provides background information on how Google News works and notes that Google News results also appear in the Google Web Search results as well as on iGoogle personalized home pages.
Paragraph 4 complains that Google’s method for deciding what stories appear, from whom and in what order within Google news results is not transparent and thus may favor one publisher over another. According to the complaint, Google’s lack of transparency damages the press which competes with Google in the collection of online advertising.
Google’s algorithms are semi-transparent
Let’s consider the first issue: Google’s algorithm for sourcing and ranking news stories isn’t transparent. This is of course true to a degree – nor is the problem confined to Google News. Commercial search engines do not publish their exact indexing and ranking algorithms for two main reasons:
- Search algorithms are what determine the actual quality of search results and thus provide the most important competitive advantage in differentiating one search engine form another.
- If algorithms were fully documented, some website owners would maliciously exploit them, leading to poor quality results.
Google does offer help
While the exact search engine algorithms are unpublished and are continually evolving, savvy website owners aren’t really in the dark as the complaint implies. Google communicates extensively with website owners, providing search engine optimization tips through multiple channels, including documents, user groups and videos. Sure, the information may be incomplete and there may be some disinformation – as in news stories, the reader also needs to know how to read between the lines.
Third party consultants available
In addition to Google’s official information, FIEG members could seek out professional third party Search Engine Optimization (SEO) support3. Indeed, many of the leading English language newspapers, such as the New York Times, already make use of internal and external SEO professionals. These professionals study the web “signals” that are available to Google and prioritize them based on considerations such as the quality of the signal (can it be abused?) and Google’s known goals (does it help determine authority and relevance?). SEO professionals could tell FIEG that Google considers more than 200 factors in determining web ranking; they also know about internal Google documentation that has leaked out onto the web. More importantly, SEO professionals could work with FIEG members to implement SEO best practices by targeting the most important SEO ranking factors. However, I digress, as the FIEG complaint isn’t really about ranking.
Fear of a carrot and stick ranking factor
Through a reading of paragraph 31 it emerges that FIEG is concerned that Google may penalize a publisher for running or participating in a rival online advertising network while rewarding publishers who participate in Google’s own online advertising networks, e.g. AdSense and DoubleClick.
Google’s track record for impartiality is pretty good
Google’s dominant position in most markets is a serious concern for the web. As I’ve written previously, Google is not always a perfect company. In that article, I wondered if an independent ombudsman is needed to adjudicate when a site is banned from Google. Yet, while I’m under no false illusions about Google’s reach and power, I would argue that Google’s track record for impartiality is probably as good, if not better, than most of the newspapers themselves. Google says that AdWords advertisers receive no special consideration in Google’s organic results. If you look at Google’s behavior over time, both on the organic site and on the paid results side, you’ll detect a pattern of enlightened self-interest. Google has worked to insure first and foremost that its users are truly happy with the results they obtain. Happy users not only come back to Google, they even go out of their way to find Google when, as an example, new releases of Internet Explorer try to “distract” them with a different search option. Google argues that its competition is only a click away. While noted search engine analyst Danny Sullivan argues that Google is a habit, there is also a lot of truth in what Google says.
The kettle calls the pot black?
As a SEO Professional, I can understand the frustration of the newspaper editors regarding Google’s non-published algorithms. Even so, the transparency argument falls flat the minute it is applied to the press itself. News editors do not publish the criteria they use for selecting and placing stories in their newspapers. Nor, if I open Corriere della Sera, La Repubblica, La Stampa, Il Giornale or even Il Tirreno, will I find a list of what stories were considered but weren’t covered due to space, time, political or commercial considerations. Certainly companies and individuals are positively and negatively impacted by daily non-transparent editorial decisions. Any paper owned by a political party (common in Italy) or a prominent business family (Agnelli, Berlusconi, Murdoch) isn’t really in a position of arguing that Google isn’t objective.
Publishers, competing in online ad space, damaged by Google’s secretiveness
The second part of the complaint, Google’s secretiveness in the selection and ranking of news items somehow damages the press which competes with Google in online advertising, is the real heart of the complaint. I must admit, this point wasn’t very clear until I examined the final two paragraphs of the evaluation section.
Don’t steal my home page users
In paragraph 30, Google is accused of creating an information portal which users will use as their browser home page rather than that of a FIEG member publication. Adding insult to injury, Google’s information portal aggregates content Google “uses” from third parties, many of which are FIEG members. The paragraph doesn’t specify which information portal scares the publishers – they may mean Google News, iGoogle or both.
This argument doesn’t hold water. The decision by a user to set Google News, iGoogle or the home page of a major newspaper as their home page is going to be made based on which page holds most appeal on a regular basis. In any case, most users are probably choosing Google the search engine as their starting point rather than an online newspaper or a news aggregator – not because Google is dominant in search but because a search engine is a better starting point than a busy portal. Typically users have shied away from portals filled with bouncing banner ads and the like – it isn’t Google’s fault if publishers don’t want to learn this lesson.
Um, the front page concept doesn’t exist on the web
Further on in paragraph 30 another problem emerges. Google News sends users directly to internal pages within a publisher’s website, bypassing the publisher’s home page which is described as an important source of advertising revenue for information sites.
Unfortunately this statement shows a profound lack of understanding of how the web differs as a media compared with print. Due to the nature of hypertext links, web navigation can and will bring users directly to any page within a site. An internal page may be cited with a link on a hot third party site. It may be mentioned in traditional media. It may be the best answer to an emerging query in Google or another search engine. In short, an internal page in a website may be more important for many users than the site’s home page. The publisher’s concern shouldn’t be trying to force users to visit a property’s home page stuffed with ads just because the page view will trigger lots of (poorly paid) impressions. Rather, publishers should focus on appropriately distributing advertising throughout their sites. Even better, if publishers are able to finely target ads to their content, as Google does, they will find they can charge more while showing fewer adds – a win-win for all. Regardless, forget the front page, it not longer exists.
Exclude stories from Google News, but keep them in the main web search
After complaining that Google can arbitrarily keep a news source out of Google News, the press association argues in paragraph 5 that they cannot control what content is in or out of Google News. They say that their only option is to allow Google to freely spider their sites otherwise they would not appear in the Google web index – losing the valuable traffic that the web index generates.
This argument is flawed on several fronts
First is the obvious contradiction of their previous complaint – Google arbitrarily decides who’s in Google News and who’s not. Then there’s the premise that a publisher would selectively want some articles in Google Web Search but not in Google News search. Why? Why would a publisher want traffic to a specific article or articles from web search but want to forgo traffic to the same article from the news search? While there might be some demographic differentiation, leading to different levels of monetization, monetization is monetization. Are the news publishers saying that users coming from the specialized News showcase Google provides cannot be monetized? I’d love to see the data supporting this.
Full Google News opt out is possible
Should publishers for some reason not want to participate in Google news, they can opt out completely and yet they will still appear in Google web search, something the complaint fails to mention. There is also a full range of options for automatically controlling what appears in Google News and Google’s main web index.
While it would be nice if Google had a separate crawler for Google news, it doesn’t (Microsoft did have a separate news bot, msnbot-news, although I don’t know what its status is since Bing was launched).
Do as I say, not as I do
It would be nice to be able to buy Corriere della Sera or La Repubblica on Saturdays without being forced to purchase their woman’s supplements too – just a coincidence that both force their readers to pay for the same unwanted supplement on the same day or abuse of a dominant position as the primary national papers? Just wondering.
Google’s dominant position in Italy
The underlying justification for the antitrust investigation is Google’s dominant position in the search engine market. Yes, by any measure Google does have a dominant position in the Italian Search Engine Market. However, it would be far-fetched to blame Google for this. Both Yahoo! and Microsoft have consistently failed in search due to poor execution rather than any inappropriate behavior on Google’s part. This may change as Microsoft seems to be more committed to Bing. Some readers may know that Italy had a home-grown search engine, Arianna, which ceased to exist when Libero (Gruppo Wind) decided to outsource search to Google (Arianna’s creator, Antonio Gulli, launched Ask’s Pisa research center). They weren’t the first to go Google; for a long time Virgilio’s 1999 agreement with Google was cited as a milestone in Google’s corporate history4.
Don’t fight, learn
Rather than fighting Google, Italian publishers would be wiser to learn from Google’s success: simple user interfaces, highly targeted non-intrusive ads just to name two.
If it is any consolation, Italian news publishers aren’t alone. Book publishers are still working out the implications of Google Books on their industry.
For further reading on the topic of the Press vs. Google, I’d encourage you to check out Danny Sullivan’s writings on the subject, starting perhaps with his Google’s Love For Newspapers & How Little They Appreciate It.
- I was asked “what is the real motivation behind the antitrust complaint?”. I can only imagine that, based on what is happening in other countries, FIEG is using the antitrust case as a negotiation tool to pressure Google into some sort of revenue sharing agreement. Yet given that most companies are willing to PAY Google for traffic, I think this outcome, assuming it is what FIEG is really looking for, is unlikely, even if/when Google decides to place ads on Google News Italy.
- Google’s initial official response is available.
1 According to investor relations reports, 97% of Google’s revenues are from advertising
2 in Italian, try Google Translate for a rough English version
3 As a SEO consultant, I have a conflict of interest here, you’ve been warned!
4 Mention of the Virgilio partnership was removed from a recent revision of Google’s official corporate history, but it can currently still be found in a version hosted at the Internet Archive http://web.archive.org/web/20071226092114/http://www.google.com/corporate/history.html
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