Google Publishing Analysis

LARRY KUDLOW, CNBC ANCHOR: It used to be that if you had a question you went to the library, now you go online. But you can`t really find those books that you`d see on the library shelves until now. Google will soon start scanning them into its search service. And authors and publishers are

Welcome, both of you.

Ms. Schroeder, it`s a pleasure to see you again. It`s been a while. Let me begin, you call this Google library a license to steal in a recent op-ed piece. Could you elaborate, please?

PAT SCHROEDER, PRESIDENT & CEO, ASSOCIATION OF THE AMERICAN PUBLISHERS: Absolutely. I mean, we are very excited about working with Yahoo! and Microsoft and now Amazon and others because publishers really want to be out there, but you have to comply with copyright. The Supreme Court said 9-0 the copyright laws apply in the digital world and that`s our problem with Google. In fact, even Google is doing it right overseas in Europe. So we just wish they would do it right at home. And that`s why authors, international publishers and everybody who have been up in arms trying to say, wait a minute, wait a minute, of course, we want to be in the digital world but have to do it right. You have to get permission from the rightsholder before you make copies of the book.

KUDLOW: Mr. O`Reilly, you say that obscurity is a far greater threat to authors than copyright infringement. Could you elaborate on that?

TIM O`REILLY, FOUNDER & CEO, O`REILLY MEDIA: Yes. Well, first of all, let`s do the numbers. There were about 1.2 million books that sold at least one copy last year. That`s according to the Nielsen Book Scan. Meanwhile, the Online Computer Library Center reports that there`s something like 32 million individual books in libraries. That means that the number of active titles represents about 4 percent of all of the titles that are in print.

So there`s a vast area of books that are really not being commercially exploited. The search engine can help people to find. Now, in my business, we have an online search service for our computer books. And we found that 23 percent of the usage is from books that make up only 6 percent of our sales. Search drives sales. It drives access. It helps people to discover value in old works. And we really believe that the opportunity that`s being given here is to find value in economic -- in works that were really thrown away by the publishers.

KUDLOW: Well, Ms. Schroeder, do you agree that this Google library initiative can save most authors, the great majority of authors, from an ignominious obscurity?

SCHROEDER: No. I believe that the law says very clearly that the author gets to decide whether this will help them or the publisher gets to decide whether it will help them, not Google.

O`REILLY: Well, what about web search, Pat?

SCHROEDER: Well, all of those things can be very helpful if you`re getting, A, their permission and they get to decide. By we are very.

O`REILLY: Does copyright law.

SCHROEDER: .suspicious of billionaires saying this is going to be good for you. We`re going to take your stuff without your permission and it`s going to be good for you. I thin Mr. O`Reilly`s books are different from most publishers because they are in the very high-tech area and I can see how that helps. And that`s wonderful. Good for him. But you`ve got to remember there are people printing poetry books and children`s books and all sorts of other things, and they unanimously have said almost, this isn`t going to work all around the globe. So if you`re thinking about, you know, if you build a search engine like Google, it`s wonderful, it`s terrific. But if you don`t have the writers and the poets and the people writing stuff, no one`s going to use the search engine.

KUDLOW: Well, Mr. O`Reilly.

SCHROEDER: So we really think it should be both.

KUDLOW: Mr. O`Reilly, what is this snippet, by the way? This is something that concerns me. I am an author. I published a book in 1998, didn`t do fabulous but it didn`t do bad, and I`m trying to figure out, is a snippet a couple of lines, is it a couple of pages, it is a couple of chapters? Who knows?

O`REILLY: I think it`s pretty clear what a snippet is. We`ve seen in web search engines for the last six or seven years a fairly good idea of what search engines do when they take copyrighted material. And I`ll remind you that the same fair use exemption that Google is claiming for Google print is the very same one that they use for taking copyrighted web pages, making a copy of those, and generating an index. And they give a very small snippet of text; at most, a few lines that help somebody decide whether they want to follow the link.

And Google has been very clear that what they will do is, if they -- if the book has uncertain ownership, they will show only the snippet. If the book has been opted in by the publisher, then they will show a page or two so that people can look at the book. If it`s in the public domain, they will show the entire book. So I don`t think there`s any ambiguity here except in the misinformation that the AAP, which I`ll remind you, does not represent ordinary small publishers. It mainly represents the big companies that collectively are way bigger than Google and are trying to protect their interests.

KUDLOW: Ms. Schroeder, you look like you`re getting warmed up to respond to that one.

SCHROEDER: Let me tell you; show me a publishing house anywhere that`s got a 767. As I understand Google has -- let me tell you, Google.

O`REILLY: Well, just because somebody`s profitable, you think they`re bad?

SCHROEDER: No, I`m not saying because they`re big, they`re bad. We also have a very strong small and independent publisher`s group. And we work very hard with all of the regional publishers. So, we represent, I think, 75 to 80 percent of the books being published in America. That I think is very important.

Let`s talk about fair use and the snippet. Right now, a snippet is what Google says it is because it isn`t the law. What fair use says -- when I was member of Congress, I helped draft this -- look, if you`re a nonprofit, Google isn`t, if you`re an educational institution, Google isn`t, if you`re trying to do a review of a book or a movie or something, that`s OK to then take a small portion of the work. Google has taken this and flipped it and saying we`re going to take the entire thing and copy it all.

O`REILLY: But that`s technology, Pat. That`s technology, Pat.

SCHROEDER: We`re going to make two copies. We`re going to give one to the library. They can use it any way they want. And it`s OK for us to do this because we`ll only show out snippets. Now, maybe tomorrow they change their business plan and they show out more. So.

O`REILLY: Well, sue them then.

SCHROEDER: .I think we have every reason to be very suspicious because.

KUDLOW: Well, let me just ask -- this is a kind of KUDLOW & COMPANY poll. Ms. Schroeder, you`re the head of the Association of American Publishers. You regard yourself as a capitalist?

SCHROEDER: Absolutely.

KUDLOW: You`re not against profits?

SCHROEDER: No, and none of my members are either.

KUDLOW: All right. Now, Mr. O`Reilly, I got to ask you same question. Are you against profits? Do you believe that Google represents a threat to the profitable creativity of authors, of musicians, maybe even of scientists?

O`REILLY: No, actually I believe it actually enhances the creativity. I think that what -- the dirty little secret of publishing is that publishing basically throws away most of the intellectual property that gets produced by those authors. They basically throw stuff at the wall and sees what sticks. Google effectively is going to rescue some of those works and provide more value. If you look at the immense creativity on the web, it`s certainly not being hampered by search engines. I think you can argue quite convincingly that the presentation of snippets by search engines is actually a great benefit to people who are independent authors creating content.

KUDLOW: Ms. Schroeder, we`re going to run out of time, but I will give you the last word.

SCHROEDER: Thank you. Be still my heart. I`m so excited. No, we are definitely for profit. And one of the things we think is you`ve got to help pay the authors and the writers and the poets that are creating this stuff, that Google is going to search.

KUDLOW: Yes.

SCHROEDER: So far, they`ve been shutting them out. And they don`t see a way that the others aren`t shutting them out.

KUDLOW: All right, Pat Schroeder, we appreciate it very much. Tim O`Reilly, we appreciate it very much.

END

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