Monday, June 15, 2009

Thanks, Google

Google has been much in the news lately—and not in a good way.

Google’s ambitions—particularly in the book field, where it recently settled a lawsuit by publishers over its plans to scan every out-of-print book ever written so as to be searchable—have taken on Microsoftian overtones in the minds of authors, publishers and, now, Government lawyers.
This is how the Wall Street Journal reported developments last week:
U.S. Steps Up Probe of Google Book Deal

By Elizabeth Williamson, Jeffrey A. Trachtenberg, and Jessica E. Vascellaro

The Justice Department has sent formal demands to Google Inc. and publishers for information about a deal that would allow the search giant to make millions of books available online, publishing company executives and people briefed on the matter said Tuesday.

The civil investigative demands, or CIDs, are the strongest sign yet that the Justice Department may seek to block or force a renegotiation of the settlement, which was struck last year and has not yet been approved in court....

Google began scanning books in 2004 so the text could be searched online, and publishers and authors sued to stop the effort in 2005, alleging it violated copyright laws. Google settled the dispute last year, agreeing to pay $125 million to settle claims, cover legal fees and establish a registry for publishers or authors to get paid when their titles are used online....

The settlement has drawn criticism from a variety of industry executives who say it will give Google broad copyright immunity and make it difficult for competitors to enter the market for digital titles. Google, the Authors Guild and major publishing companies have held the agreement up as a landmark case that will expand digital access to books.

—The Wall Street Journal, 06/10/09

As a former Google shareholder and an author who could not have written a book without using Google as the primary research and organizational tool (it took about a year to write “Pilgrimage to Warren Buffett’s Omaha,” including research, writing, re-writing and more re-writing, plus everything else that goes with publishing a book the old-fashioned way), I admit to a bias in Google's favor.
But I strongly suspect the Google book-scanning deal will probably help authors in ways they can’t currently imagine.
For starters, it will put content in front of people who otherwise would never know that content existed. Just consider one such book, “A History of the Yankee Division,” a 283 page history of the 26th Division of the 101st Infantry in World War One, recently made available thanks to Google.

The book, which was published in 1919, is long since out of print and concerns a relatively obscure matter: the start-to-finish account, from formation to armistice, of what was known as the “Yankee Division,” so-called because it was comprised of New England soldiers.
But that division included my grandfather.

Now, until last week, all I knew about my grandfather’s two war experiences was that he had seen trench warfare in France during the First World War, and had traveled extensively through China as a military advisor to the government in its efforts to stave off the Japanese during the Second World War.

I understood that his time in France had involved real combat. (“Oh, you’d be standing in formation and the man next to you would get a bullet right here,” he once told me, pointing to his forehead. “That was every day stuff, that was.”) And I also knew he had a small, velvet-lined box of decorations which he didn’t talk about, even when pressed. “You wave a gun and some Germans surrender,” he’d say, “and they give you a medal.”

But that was about it.

And then Google scanned “A History of the Yankee Division” from the University of Michigan library, and made the book available to the world.

And now I know where my grandfather trained, where he landed in France, and where he marched, rested and fought. I know the ground he occupied on the day of the armistice, and even name of the ship that took him home.

Also, I also learned something about one of those medals he never talked much about :

First Lieutenant George L. Goodridge of the 101st Infantry, on November 8, with about thirty men, secured a footing in an advanced enemy trench. The attacking battalion met with stubborn resistance…. Goodridge and his men held on until relieved November 11. He received the Distinguished Service Cross.

What, exactly, causes a soldier to merit a “Distinguished Service Cross”? You can find that thanks to Google, too. According to Army regulations:

The act or acts of heroism must have been so notable and have involved risk of life so extraordinary as to set the individual apart from his or her comrades.

So, thank you, Google.

And let’s hope the so-called Justice Department doesn’t kill a great thing before everyone else can benefit, too.

Jeff Matthews
I Am Not Making This Up

© 2009 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.


Anonymous said...

Look no farther than Disney for Google's problems regarding scanning books that have fallen out of print. Sonny Bono (who would vote for Sonny Bono any way?) got a law passed called the "Copyright Term Extension Act", or also known as the Mickey Mouse Law. The short story is that most of Disney's products would have fallen into the public domain by now and they are so freaked out by it, that they have prevented anything from going into the public domain for years now. The Electronic Fredom Foundation has been fighting Disney just as long to get the Mickey Mouse Law revoked. (Suggesting by the way that a person or corporation could renew thier Copyright for $1, allowing those who either didn't want to renew or weren't around to renew to allow their work to enter the public domain, which would allow Google to scan it without issue, but Disney fought tooth and nail to even kill that idea). So, if you are wondering who is trying to stop Google, follow the money, the really big money, not the author of 1919 biographies; I think they know that the Google project would help them in ways they have never considered. (Is it ironic or just sad that almost all of the early Disney animations were based on public domain stories?)

pondering said...

The Yankee division went on to fight heroically at the Battle of the Bulge as well. My bet is the government will muddle this great idea up as well.

Highside said...

Whilst I am very pleased for you that you were able to learn so much more about your grandfather I have to point out that there is a problem with your argument.

Hitler did good things too, that's why the Germans voted for him. You have to measure net good not just the ability to do a good thing.

The fact that drugs do terrible things to some individuals does not mean prohibition is the correct policy for a society.

I do not have enough knowledge of the Google situation to have an opinion.

Jeff Matthews said...

Highside says "Hitler did good things too, that's why the Germans voted for him."

When, exactly, did the Germans vote for Hitler as head of state?


Vjklander said...

Part 1.
The current economic morass is the natural and inevitable result of ignorant meddling by Congress and their co-conspirators in the White House and other bureaus, administrators, and petty officials within the government. These miscreants gave bad actors the ability to make huge bets on the viability of all publicly traded companies and also gave these same bad actors the ability to control the viability of all of those same publicly traded companies. And they still refuse to own up to it.

1. It started in 1996, December 5th to be specific, when Alan Greenspan took the Federal Reserve off the Gold Standard. The de facto gold standard that is. Prior to this, Mr. Greenspan set the Fed funds rate to track the 2-year moving average of the price of gold. After that date, he used the Fund rate willy-nilly to attempt to control the market for political purposes rather than serve it. We now see the result.
2. In 1999, President Clinton’s appointee Franklin Raines reduced credit requirements to provide loans to people who couldn’t rationally afford them. These bad loans were securitized with other more stable loans and sold to investors backed by the full faith and credit of the US Government.
3. On Nov 2, 1999, President Clinton signed the Gramm-Leach-Bliley Act repealing the Glass-Steagall Act of 1933 which separated the investment banks from the commercial banks. This firewall had protected John Q. Public’s banking services from being unduly threatened by the risk inherent in the investment domain. On the single week of September 22, 2008, all the investment banks disappeared into the commercial banking realm, thus doubling the size, power, and control of the Federal Reserve.
4. On December 21, 2000, President Clinton signed into law the bill defining Credit Default Swaps and exempting them from regulation by the SEC and CFTC. There are 2 kinds of CDS; covered CDSs which are essentially insurance products exempted from oversight by insurance regulators, and naked CDSs, which are basically gambling, except the dealer of the cards can pick their own hand.
5. On July 6, 2007, the SEC eliminated the uptick rule which heretofore had prevented gangs of short-sellers from driving a target company into insolvency. (As a side note, this was the result of lobbying by Bernie Madoff).
6. On November 15, 2007, the FASB imposed mark-to-market accounting. This essentially destroyed a firm’s ability to get financing using its securities as collateral.

So there you have it, the perfect storm created by Congress, the President, or their designees, which churned over time and eventually turned into the current disaster. It can also be noted, that all the measures taken by the Presidents and Congress over the last year have only had the effect of further exacerbating the problem until March 9, 2009.

Vjklander said...

Part 2.
1. On March 10, 2009, Representative Frank, Chairman of the Financial Services Committee, announced a plan to reinstate the uptick rule. In the week following that announcement, the markets rose 20%.
2. On March 16, 2009, the FASB announced plans to revise mark-to-market accounting to remove the feedback loop driving companies into insolvency. In the week following that announcement, the markets rose 10%.
But still Congress refuses to admit their own culpability and reverse the irrational interventions they have made in the market over the last decade. It is interesting to note the parallels between the actions of Congress and The 5 Stages of individuals faced with a long term mental illness like bipolar disorder .
1. Denial - The "No, not me" stage.
This stage is filled with disbelief and denial. You think the doctor has to be wrong, that there is no way you have a mental illness, especially not one you will have for the rest of your life.
2.Anger/Resentment - The "Why me?" stage.
Anger at the situation, perhaps anger at the person you perceive as triggering your episode. Anger at the doctor and the hospital for their audacity in labeling you with a mental illness. Perhaps anger with yourself for things you have done that you think may have "brought on" the episode of bipolar disorder. Anger that it is you who has been afflicted, when it could so easily have been someone else.
3. Bargaining - The "If I do this, you’ll do that" stage.
You try to negotiate to change the situation. If you think it was triggered by a relationship, for example, you swear that you will be better, and it won't ever happen again, if you just don't have to have this illness. You bargain that you will give up bad habits in exchange for wellness "I will quit drinking; smoking etc. if only the bipolar disorder goes away.
4. Depression- The "It's really happened" stage.
You realize the situation isn’t going to change. Perhaps you have had another episode. Perhaps you stopped taking your medication, only to discover that you became ill again. It finally begins to set in, and you ponder what this disorder is going to do to your life as you had known and accepted it. This is a stage of preparedness for acceptance, and finally one day it is reached.
5. Acceptance - The "I do have Bipolar Disorder" stage.

The actions necessary to placate Mr. Market are this simple:
1. Direct the Chairman of the Federal Reserve to set the fund rate according to the price of gold.
2. Define the only acceptable home loans to receive federal guarantees to be fixed- year, fixed-rate mortgages on owner-occupied primary residences with no prepayment penalties and required proof of ability to pay.
3. Reinstate the firewalls between commercial and investment banking.
4. Place covered CDSs under the purview of insurance regulators and ban naked CDSs.
5. Reinstate the uptick rule on all stock transactions.
6. Eliminate mark-to-market accounting.

Nick said...

What happened between 2001 and 2008? Oh yeah, the uptick rule. I've had enough straw men for one business cyle.
Save the politcal demagoguery. It's all a little more complicated than helping poor people buy homes.
Just remember, whatever you do, just glom onto the facets of this decline that fit your partisan beliefs.