November 15, 2024

You are here: Home / Archives for fundamental change

A First Step on Continent for Google on Use of Content

February 17, 2013 by Leave a Comment

PARIS — Publishers in France say they have struck an innovative agreement with Google on the use of their content online. Their counterparts elsewhere in Europe, however, say the French gave in too easily to the Internet giant.

The deal was signed this month by President François Hollande of France and Eric E. Schmidt, the executive chairman of Google, who called it a breakthrough in the tense relationship between publishers and Google, and as a possible model for other countries to follow.

Under the deal, Google agreed to set up a fund, worth €60 million, or $80 million, over three years, to help publishers develop their digital units. The two sides also pledged to deepen business ties, using Google’s online tools, in an effort to generate more online revenue for the publishers, who have struggled to counteract dwindling print revenue.

But the French group, representing newspaper and magazine publishers with an online presence, as well as a variety of other news-oriented Web sites, yielded on its most important demand: that Google and other search engines and “aggregators” of news should start paying for links to their content.

Google, which insists that its links provide a service to publishers by directing traffic to their sites, had fiercely resisted any change in the principle of free linking.

The agreement dismayed members of the European Publishers Council, a lobbying group in Brussels, which has been pushing for a fundamental change in the relationship between publishers and Google. The group criticized the French publishers for breaking ranks and striking a separate business agreement that has no statutory standing.

The deal “does not address the continuing problem of unauthorized reuse and monetization of content, and so does not provide the online press with the financial certainty or mechanisms for legal redress which it needs to build sustainable business models and ensure its continued investment in high-quality content,” Angela Mills Wade, executive director of the publishers council, said in a statement.

German publishers were also scornful, with Anja Pasquay, a spokeswoman for the German Newspaper Publishers’ Association, saying: “Obviously the French position isn’t one that we would favor. This is not the solution for Germany.”

Germany has been in the forefront of the push to get Google to share with online news publishers some of the billions of euros that the company earns from the sale of advertising. A proposed law, endorsed by the government of Chancellor Angela Merkel and working its way through the federal legislature, would grant a new form of copyright to digital publishers. If enacted, it could allow publishers to charge search engines or aggregators for displaying even snippets of news articles alongside links to other Web sites.

Mr. Hollande had vowed to introduce similar legislation this winter if Google and the publishers did not come to terms. It appears that Google, which had threatened to stop indexing French Web sites’ content if it had to pay for links, has sidelined the threat of legislation, at least for now; the agreement will be reviewed after three years, Mr. Hollande has said.

Under the deal, Google says it will help the publishers use several of its digital advertising services, including AdSense, AdMob and Ad Exchange, more effectively.

Publishers are already free to use these services, and it was not immediately clear how they would be able to generate more revenue from them; this part of the accord remains confidential, both sides say, because they are still negotiating the fine print.

“This agreement can help accelerate the move toward greater advertising revenues in the digital world,” said Marc Schwartz of Mazars, a consulting firm, who is serving as an independent mediator in the talks. “I’m not saying we have done everything, but it’s a first step in the right direction.”

More has been said about the planned innovation fund. Publishers will submit proposals to the fund, which will select ideas to finance and develop, with the involvement of Google engineers.

“The idea is that it would inject innovation into the sector in France,” said Simon Morrison, copyright policy manager at Google.

Article source: http://www.nytimes.com/2013/02/18/technology/a-first-step-on-continent-for-google-on-use-of-content.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

News Analysis: In Europe, Debate Slowly Shifts to Speed of a Recovery

December 30, 2012 by Leave a Comment

A year ago, many people seriously doubted whether the euro would still exist by now. On the threshold of 2013, the debate is more about how long it will take for the euro zone economy to recover and what must be changed to avoid future crises.

Europe still has plenty to worry about. Economic output is shrinking in 9 of the 17 members of the euro zone. European banks remain weak, and many have yet to confront their problems decisively.

Many businesses in Spain and Italy and other distressed countries cannot obtain credit, hampering a recovery.

What is more, with national elections coming up in Italy (February) and Germany (September), leaders there may be more focused on the narrow concerns of their voters, rather than the cause of European unity.

“At the moment the crisis seems to have calmed down somewhat,” Jens Weidmann, president of the Bundesbank, the German central bank, said in an interview with the Frankfurter Allgemeine newspaper published Sunday. “But the underlying causes have by no means been eliminated.”

But consider some of the doomsday scenarios that did not occur in 2012. Greece did not leave the euro zone or set off a Lehman-like financial Armageddon. Spanish and Italian bond yields, rather than succumbing to contagion from Greece, retreated from levels that had threatened their governments with bankruptcy. And nowhere did populist, anti-euro political parties gain the upper hand.

All of these things could still happen, of course. But the probability of catastrophe has fallen substantially because of a fundamental change in the way that European leaders are dealing with the crisis.

Under its president, Mario Draghi, the European Central Bank has promised to buy bonds of countries like Spain, if needed, to control their borrowing costs. That vow, which cooled the crisis fever of late summer, bought time for elected officials to begin creating the superstructure that the common currency needs to become more credible, including a permanent fund for rescuing stricken member countries and a unified system for overseeing banks.

“In 2012, the euro-area leaders finally got the diagnosis right,” said Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, “It wasn’t about Greek debt or Irish banks. It was about some very fundamental design flaws that needed to be fixed. That’s what markets were looking for.”

Even though European political leaders seem to argue endlessly, they have made enough progress to keep speculators at bay. Investors surveyed by UBS recently ranked the chances of a euro-zone breakup well behind the danger from the so-called fiscal cliff in the United States — the combination of spending cuts and tax increases scheduled to take effect next month — or a hard landing by the Chinese economy.

“There is more of a perception that nobody is better off if this thing breaks up,” said Richard Barwell, senior European economist at Royal Bank of Scotland.

As the year progresses, the question will be whether a fragile calm in Europe holds long enough for economic growth to resume, for banks to rebuild their balance sheets and for policy makers to make progress creating a more durable currency union.

Here are some of the main things to watch:

Economic performance The euro crisis, arguably, will be over the day that all of the stricken countries are generating economic growth. Ireland, one of the first countries to get into debt trouble back in 2008, might already have turned the corner. Its gross domestic product grew 0.2 percent in the third quarter from the level of a year earlier.

Spain, Italy and Portugal are still deep in recession, and Greece is in a de facto depression. But there are some signs of progress in one crucial measure: trade balances. All of the distressed countries have increased their exports this year and reduced their trade deficits. That is a sign their products have become more competitive on world markets.

Article source: http://www.nytimes.com/2012/12/31/business/global/in-europe-debate-slowly-shifts-to-speed-of-a-recovery.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Digital Domain: One Site Fits All, Except for Advertisers

August 6, 2011 by Leave a Comment

The problem has persisted despite many executive changes, revampings and rebranding campaigns that have tried to make Yahoo a destination as highly valued by its advertisers as its users.

Yahoo is second only to Google as the most-visited Web destination in the United States market, bringing in 178 million unique visitors monthly in June, according to comScore. That is a 27 percent increase over June 2008. But the company’s market capitalization is little changed from 2003. The company holds the No. 1 spots in news, sports, finance, entertainment news, real estate and comparison shopping sites, according to data collected in June by comScore. Yahoo’s e-mail service alone drew 2.2 billion visits in June, according to Experian Hitwise.

What a mismatch: Where else on the Web can you find, on the one hand, so many happy users whose growing numbers testify to their satisfaction in Yahoo’s services and, on the other, financial performance that is so lackluster?

A fundamental change in the way display advertising is being bought and sold is hurting Yahoo’s core business. Today, advertisers care less about creating a partnership with a particular Web site and more about the behavioral characteristics — as best as they can be known — of their target users, wherever they happen to be. More and more ads are placed through online ad exchanges, in which ad agencies buy from whoever offers the lowest price for users who meet the buyer’s criteria.

Yahoo sells display ads — at a premium price — to advertisers interested in claiming a place on its choicest pages. This is “Class 1 display.” Those purchases do not come via online ad exchanges. They require an old-fashioned sales technique that long predates the digital age — what Carol Bartz, the Yahoo chief executive, calls “face-to-face relationship selling.”

When Yahoo does not manage to sell the available space on its premium pages at a guaranteed high price, it channels the space as Class 2 display into the ad exchanges, where it is sold at much lower rates. In the second quarter, a significant portion of its Class 1 display space in the United States market failed to sell.

The impact on the company’s financial performance has been unmistakable. For the quarter, Yahoo’s revenue for display ads worldwide was up 5 percent over the year-ago period, which doesn’t sound bad. The problem is that there was high growth everywhere but the United States, where that revenue actually declined. Growth in the United States matters most because an overwhelming majority of the company’s revenue comes from this single market.

Ms. Bartz, Yahoo’s chief executive since January 2009, said in a conference call after the earnings report that the reasons for the shortfall were recent moves at its United States sales group, including leadership changes, field staff turnover and organizational restructuring. All was being straightened out, and the new people were coming up to speed, she reassured listeners.

She did, however, have to lower the long-term guidance for the growth of display ad revenue, which would now fall below what had been projected just two months before.

Yahoo investors, though, showed no inclination to accept the idea that the poor display ad sales were just a minor execution problem. Yahoo’s stock has fallen about 20 percent since the earnings were announced on July 19. That compares with around 10 percent for the Nasdaq, so the recent market rout carries only partial responsibility.

KEN SENA, a director in the equity research group at Evercore Partners, says he doesn’t believe that Yahoo’s strategic position is hopeless. “Given the number of visitors who come to the site, Yahoo has an opportunity,” Mr. Sena says. But the company’s executives, he adds, must somehow figure out how to “create a new experience for those visitors.”

An executive who is working on the new experience is Ross Levinsohn, executive vice president for the Americas, who joined Yahoo nine months ago.

He retained a newcomer’s optimism after the disappointing second-quarter results were released. “We hope to tap into the portion of the $85 billion spent on TV advertising today that is shifting to digital,” he said in an interview late last month. Yes, “$85 billion” certainly has a nice ring to it.

Mr. Levinsohn did mention, however, that more of Yahoo’s choicest display ad space was being filled in online ad marketplaces. “Commoditization,” as he called it, “has been far more aggressive than most people would have thought,” he said.

That does not augur well for the future. Ask any Web publisher. Once prices go down, down they stay.

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=a1f501a30639c7f2bf4dacc37016d96c

Filed Under: Business News Tagged With: , ,