AP might charge some customers to get news earlier

[October 07, 2009]  HONG KONG (AP) -- The Associated Press is considering whether to sell news stories to certain online customers exclusively for a certain period, perhaps half an hour, the head of the news organization said Tuesday.

The AP licenses its stories and photographs to many of the Internet's main hubs, including Google, Yahoo and Microsoft's MSN, and its work also is used by hundreds of Web sites owned by newspapers and broadcasters. Currently, they all get the material at the same time.

The AP's chief executive, Tom Curley, did not clarify how a product that provided some news earlier would work or specify the target customers for the potential new service.

However, in remarks at the Hong Kong Foreign Correspondents' Club, he said that in general the AP and the news industry hope to capitalize on the intensifying battle between Microsoft Corp. and Google Inc. as those companies vie to expand their online audiences. The AP's contract with Google expires at the end of this year, while Microsoft's ends next year.

Curley echoed the complaints of many news companies that contend sites such as Google have reaped a fortune off their articles, photos and video without fairly compensating news organizations that produce the material.

"I think we stand at an enviable moment where Microsoft and Google have decided to go to war," Curley said. That provides an opening for content producers to benefit, he said.

In a statement Tuesday, Google reiterated its belief that its search engine helps news organizations by linking to their stories and driving traffic to their Web sites. The company also pointed to its current agreement with the AP as one of the ways that news providers make money from Google.

"We look forward to continuing conversations with publishers about how to innovate online," Google said.

Microsoft declined to comment.

Curley said the new products the AP is exploring include premium-priced information on certain topics.

And, he added, "products can be reserved, and there can be exclusives given, perhaps on a time-base measure. Those who get access to that content and the rich multimedia or metadata that comes with it might get an exclusive for, oh, 20 or 30 minutes."

Jane Seagrave, the organization's senior vice president of global product development, declined to elaborate on Curley's speech. She said only that the AP is negotiating new contracts with Google, Microsoft and Yahoo.

The AP already plans to roll out a system that will track its content online and detect unlicensed uses in ways that could help boost revenue for the not-for-profit news cooperative, which was founded in 1846, and its member newspapers. The system, which the AP calls a "news registry," will be tested in six weeks by nine newspapers as well as a sports statistics provider run jointly by AP and News Corp., Curley said.

The AP and its member newspapers contend unauthorized use of their material is costing them tens of millions of dollars in potential ad revenue at a time when they can least afford it.

The AP's revenue is expected to be around $700 million this year, down from $748 million in 2008, in part because of reductions in the fees it charges newspapers and broadcasters, whose advertising revenue has been dwindling as more marketers shift to less expensive or better targeted options online.

Although Microsoft and Google have been sparring for years, the hostility is escalating. Among other things, Microsoft struck a deal to process search requests on Yahoo, as part of an alliance expected to begin next year if regulators approve. Meanwhile, Google has become much more aggressive in its attempt to sell corporate e-mail and business software applications that compete against some of Microsoft's more profitable products.

[Associated Press; By JEREMIAH MARQUEZ]

AP Business Writer Michael Liedtke in San Francisco contributed to this report.

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