Google Deal Gives Publishers a Choice: Digitize or Not

It was a small step forward for Google’s plan to digitize every book and make them readable and searchable online, known as the Google Library Project, but it did not resolve the much bigger issue standing in Google’s way — litigation between Google and authors.

Though the settlement will not change much about the way that Google and publishers already partner, it is the newest signpost for defining copyright in the Internet age. It is also the latest evidence of the shift to e-books from print, and of Google’s efforts to compete with e-book rivals like Amazon.com. Digital books were a new and daunting prospect when the publishers first sued Google seven years ago, but they have now become commonplace.

“They had this lawsuit hanging around for years, and basically the publishers have all moved on,” said James Grimmelmann, a professor at New York Law School who has closely followed the case. “They are selling digitally now. That’s the future. This just memorializes the transition.”

Thursday’s agreement, between Google and the Association of American Publishers, had been expected since last year. The publishers involved in the settlement are the McGraw-Hill Companies, Pearson Education, the Penguin Group, John Wiley & Sons and Simon & Schuster.

The deal allows publishers to choose whether to allow Google to digitize their out-of-print books that are still under copyright protection. If Google does so, it will also provide them with a digital copy for their own use, perhaps to sell on their Web sites.

For books that it has digitized, Google allows people to read 20 percent of them online and purchase the entire books from the Google Play store, and it shares revenue with the publishers. The two parties did not disclose additional financial terms of the agreement, but the publishers had not asked for monetary damages.

Google has been offering publishers the opportunity to sell digital books for years, and digitizing new books has become routine for publishers. But under the settlement, publishers get the benefit of Google digitizing out-of-print books that they might not otherwise have turned into e-books. Meanwhile, Google can expand the library of e-books it sells to consumers.

“What’s really exciting about today’s settlement is the fact that Google will be getting access to books that have long been out of print, that are in copyright,” said Tom Turvey, director of strategic partnerships at Google. “It’s good for users who weren’t able to buy them before, and for publishers.”

The settlement does not answer the question at the heart of the litigation between Google and publishers and authors — whether Google is infringing copyright by digitizing books. It essentially allows both sides to agree to disagree, and gives publishers the right to keep their books out of Google’s reach.

“We’re very pleased because the settlement acknowledges the rights and interests of copyright holders and publishers, and whether they’re going to make their rights available,” said Tom Allen, chief executive of the Association of American Publishers. But the bigger case, between Google and the Authors Guild, remains tied up in court. An agreement between those two parties will determine whether Google can move forward with its broader, more ambitious digitizing plan.

“That’s the lawsuit with high stakes,” Mr. Grimmelmann said.

The settlement with the publishers could help Google in that litigation, he said. “Maybe the fact that the publishers don’t think this is a lawsuit worth pursuing will help Google slightly,” he said.

The Authors Guild, once a partner of the publishers against Google, said Thursday that the publishers’ settlement did not resolve any of its issues with Google’s book-scanning project.

“The publishers’ private settlement, whatever its terms, does not resolve the authors’ copyright infringement claims against Google,” Paul Aiken, executive director of the Authors Guild, said in a statement. “Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights, and our class-action lawsuit on behalf of U.S. authors continues.”

The settlement also did not address the difficult issue of so-called orphan works — those that are still under copyright but whose copyright holder or author cannot be found.

The groups representing authors and publishers sued Google in 2005, arguing that its digital book-scanning violated their copyrights. After years of litigation, they agreed to a $125 million settlement, but it was rejected last year by a federal judge, Denny Chin, who said it went too far and raised copyright, antitrust and other concerns.

After that, the publishers and authors, who had partnered when negotiating with Google, split. While the authors remain in court, the publishers reached the agreement with Google privately, so it is not subject to court approval.

Julie Bosman contributed reporting from New York.

Yahoo’s Choice of New Chief Financial Officer Suggests a Plan for Deals

But two months in, she has yet to do the one thing that shareholders, analysts and advertisers so desperately seek: articulate a clear vision for the flailing Internet company, whose revenue has flattened and stock price has dropped by half over the last five years. She spoke to employees on Tuesday, roughly outlining her plans. The company, however, did not disclose any details.

An executive hiring, announced Tuesday, may offer a hint to her thinking: Ms. Mayer announced that she would replace Tim Morse, Yahoo’s chief financial officer, with Ken Goldman, the current chief financial officer of Fortinet, a public computer security company.

Analysts said the ouster of Mr. Morse, who had a history of cost-cutting, suggests Yahoo is ready to expand through renewed investments and acquisitions.

“Tim Morse was ‘Mr. Margin Expansion,’ ” said Colin Gillis, an Internet analyst at BGC Partners. “To turn the company around and compete with the big boys, Yahoo will need to spend, spend, spend.”

With 700 million users each month, Yahoo remains one of the most visited sites on the Web, but it has been ceding its share of the online display ad market to rivals like Facebook and Google.

To lure back advertisers, Ms. Mayer said she would focus on user experience and on mobile, where Yahoo has yet to dip a toe. She told employees to expect “acqui-hires” — Silicon Valley-speak for acquisitions made for talent rather than technology.

Ms. Mayer is expected to have a baby in the next few weeks, but has said she expects to return to work quickly. Previous chiefs — four in the last five years, plus two interim chiefs — have failed to carry out their own long-term plans, largely because they have been unable to articulate what it is that Yahoo actually does.

Yahoo made its name in search but lost that market to Google and then proceeded to miss the boat on every big Internet trend since. It was too focused on reinventing itself as a multimedia company to notice people were migrating to social networks and mobile devices as gateways for information and entertainment. Yahoo’s home page remains cluttered and sorely lacking a brand of its own.

Board members hope Ms. Mayer will restore some life to the moribund brand. She came from Google, where she was hired as one of its first engineers. She recently closed a $7.6 billion deal with Alibaba that gives Yahoo, after taxes and paybacks to shareholders, $625 million. She indicated Tuesday that employees should expect acquisitions, said one Yahoo employee who spoke on the condition of anonymity.

But Yahoo has had a difficult time persuading entrepreneurs to join. In 2009, Google’s bid to acquire Yelp fell apart at the last minute after Yahoo offered to pay 50 percent more than Google. According to one person close to the talks, both deals fell apart because Yelp’s management team refused to work at Yahoo and Yelp’s board refused Google’s terms.

More recently, the founder of a start-up, who refused to be named for fear it would jeopardize a business relationship with Yahoo, said Yahoo recently inquired about a potential acquisition.

The person, who has also been courted by Facebook and Google, agreed to a meeting but said the company was turned off by Yahoo executives’ failure to do basic due diligence.

“At Facebook and Google, they know your underwear size before you walk in the door,” this person said. “At Yahoo, it was clear they hadn’t even Googled me.”

Corner Office | Mark B. Templeton: Mark Templeton of Citrix, on the Big Career Choice

Q. You’ve been the chief executive of Citrix since 1999. That’s a long tenure compared to most C.E.O.’s.

A. I didn’t want to be C.E.O. at first. I had no interest, and it was kind of accidental. A lot of people I meet who have the title also have the ambition that goes with it and the desire to be C.E.O. But I’ve never really had that ambition in my life. I think there’s a bit of a lesson in it. Just generally in my career — and I’ve seen it in some team sports I’ve played, like lacrosse and soccer — the guy who always says “give me the ball” is usually the one who probably shouldn’t have the ball. It’s the guy who plays his position and is just doing his job that oftentimes is the guy you should give the ball to.

Q. Why didn’t you have the ambition for the top job?

A. It was probably a combination of two things. Before Citrix, I had a number of start-up experiences. One of them was as C.E.O., and we ran out of money and I had to lay off about 30 people. I had a pretty deep scar from that experience, and I thought, “O.K., that’s not for me.” I decided that focusing on marketing and telling stories around products and understanding customers was really what I was best at.

The other reason was that we were a public company and I didn’t really feel I was qualified to be C.E.O. Again, there’s a lesson here. You try as a manager to never put people in situations where it’s too big a stretch for them, because it often doesn’t work out too well. Usually when people end up there, it’s because the person who really wants the job has overestimated their own capabilities, or management has overimagined someone’s capabilities and puts them there mistakenly. I didn’t feel I was qualified.

And there was a time, a small gap, when I lost the C.E.O job. In the June quarter of 2000, we really missed our expectations, and by then I’d been C.E.O. for six quarters and I was learning a lot, especially about working with the board. I had not kept the board informed about what was going on and some of the struggles we were having, and I was trying to carry all of it myself, which is what green leaders do. After we missed our expectations hugely, the board decided we would do a public search for a replacement, and I was demoted to president and senior executive officer. I deserved that because that’s part of the game, being held accountable.

So we did a public search for a replacement and we had a candidate, but the board decided they didn’t like him. That was about six months in. Then we had a second one, but the board decided that I was actually a viable candidate again. They asked me if I’d be interested in having my title back. It took me about a microsecond to say yes.

Q. So you were able to hit the reset button on the C.E.O. job, but with lessons learned.

A. And what a set of lessons to learn. No. 1: Remember you’re a member of the team, and teams can take on big problems. You don’t have to carry them yourself.  In fact, as C.E.O. you have two teams, your board and management. And No. 2: Communication with the board is really critical to your success because that’s how you can get the kind of advice you need to lead a company through hard times.

Q. What are your thoughts about company culture?

A. You have to make sure you never confuse the hierarchy that you need for managing complexity with the respect that people deserve. Because that’s where a lot of organizations go off track, confusing respect and hierarchy, and thinking that low on hierarchy means low respect; high on the hierarchy means high respect. So hierarchy is a necessary evil of managing complexity, but it in no way has anything to do with respect that is owed an individual.

If you say that to everyone over and over and over, it allows people in the company to send me an e-mail no matter what their title might be or to come up to me at any time and point out something — a great idea or a great problem or to seek advice or whatever.

Q. Other thoughts on culture?

A. The way we define culture over all is how companies get things done. If you have a factory, you get a lot of things done through machinery. Most companies in software get things done through people. So our machinery is people, and to put it in technology terms, people are the hardware and our values are the operating system.

Corner Office | Mark B. Templeton: Mark Templeton of Citrix, on the Big Career Choice

Q. You’ve been the chief executive of Citrix since 1999. That’s a long tenure compared to most C.E.O.’s.

A. I didn’t want to be C.E.O. at first. I had no interest, and it was kind of accidental. A lot of people I meet who have the title also have the ambition that goes with it and the desire to be C.E.O. But I’ve never really had that ambition in my life. I think there’s a bit of a lesson in it. Just generally in my career — and I’ve seen it in some team sports I’ve played, like lacrosse and soccer — the guy who always says “give me the ball” is usually the one who probably shouldn’t have the ball. It’s the guy who plays his position and is just doing his job that oftentimes is the guy you should give the ball to.

Q. Why didn’t you have the ambition for the top job?

A. It was probably a combination of two things. Before Citrix, I had a number of start-up experiences. One of them was as C.E.O., and we ran out of money and I had to lay off about 30 people. I had a pretty deep scar from that experience, and I thought, “O.K., that’s not for me.” I decided that focusing on marketing and telling stories around products and understanding customers was really what I was best at.

The other reason was that we were a public company and I didn’t really feel I was qualified to be C.E.O. Again, there’s a lesson here. You try as a manager to never put people in situations where it’s too big a stretch for them, because it often doesn’t work out too well. Usually when people end up there, it’s because the person who really wants the job has overestimated their own capabilities, or management has overimagined someone’s capabilities and puts them there mistakenly. I didn’t feel I was qualified.

And there was a time, a small gap, when I lost the C.E.O job. In the June quarter of 2000, we really missed our expectations, and by then I’d been C.E.O. for six quarters and I was learning a lot, especially about working with the board. I had not kept the board informed about what was going on and some of the struggles we were having, and I was trying to carry all of it myself, which is what green leaders do. After we missed our expectations hugely, the board decided we would do a public search for a replacement, and I was demoted to president and senior executive officer. I deserved that because that’s part of the game, being held accountable.

So we did a public search for a replacement and we had a candidate, but the board decided they didn’t like him. That was about six months in. Then we had a second one, but the board decided that I was actually a viable candidate again. They asked me if I’d be interested in having my title back. It took me about a microsecond to say yes.

Q. So you were able to hit the reset button on the C.E.O. job, but with lessons learned.

A. And what a set of lessons to learn. No. 1: Remember you’re a member of the team, and teams can take on big problems. You don’t have to carry them yourself.  In fact, as C.E.O. you have two teams, your board and management. And No. 2: Communication with the board is really critical to your success because that’s how you can get the kind of advice you need to lead a company through hard times.

Q. What are your thoughts about company culture?

A. You have to make sure you never confuse the hierarchy that you need for managing complexity with the respect that people deserve. Because that’s where a lot of organizations go off track, confusing respect and hierarchy, and thinking that low on hierarchy means low respect; high on the hierarchy means high respect. So hierarchy is a necessary evil of managing complexity, but it in no way has anything to do with respect that is owed an individual.

If you say that to everyone over and over and over, it allows people in the company to send me an e-mail no matter what their title might be or to come up to me at any time and point out something — a great idea or a great problem or to seek advice or whatever.

Q. Other thoughts on culture?

A. The way we define culture over all is how companies get things done. If you have a factory, you get a lot of things done through machinery. Most companies in software get things done through people. So our machinery is people, and to put it in technology terms, people are the hardware and our values are the operating system.