After five clicks--you pay...Google and news publishers

More details about the new relationship between Google and some publishers.

"Placating Publishers by Limiting Links: A Google 5-Click FAQ"

by

Eliot Van Buskirk, Ryan Singel, and John C Abell

December 2nd, 2009

Wired

Google’s been taking it on the chin from traditional publishers (i.e., News Corp. chairman Rupert Murdoch) a lot lately. So it should come as no surprise that the search giant has come up with a new way for media sites to throw up a digital checkpoint where money or credentials can be demanded from readers who got there in a Google search.

It’s probably also no accident that the latest initiative came less than 24 hours after Murdoch railed yet again against Google and its ilk. That rant continues no matter how many times Google tells content owners how to keep their content out of Google searches.

It remains to be seen if anyone will take the bait. Few have employed the blunt-force padlock that is robots.txt, a piece of two-line code that essentially bars the door from search bots. Google says any disgruntled publisher can start using it yesterday, but publishers don’t want to be left alone — they really want to be paid.

But it’s a complicated issue, and Wired.com is here to help.

Google requires that sites show a visiting user the same thing that it shows to Google’s indexing robot. If your site requires a subscription or registration to see pages of the site, those locked-down pages won’t show up in search results. News sites have dealt with this by taking advantage of Google’s First Click Free program, where any single page of a website can be seen, as long as the visitor shows up through a link from Google News or Google web search. If a user then clicks on another link to the site from within the site or from Google, the website can push the user to register, sign in or subscribe.

The idea is to allow searchers to find and read content on pay sites like the Wall Street Journal or mandatory-registration sites like the New York Times, while simultaneously letting those sites encourage readers to sign up. Being included in the Google index is important for news sites, because Google search traffic can make up a majority of traffic to news sites. Google News, the automated newspaper created through aggregated links, drives comparatively little traffic and is not a large revenue maker for Google.

Google announced that it is expanding that program by limiting the number of free pages to up to five per user on a given day, depending on how publishers set up their sites. That limit prevents users from evading registration or subscription by simply googling the headline of every story they want to read in order to avoid registration or a subscription, while still offering people a good chunk of free content every day.

Google is also now allowing subscription-only sites to show just portions of stories — the headlines and first few paragraphs — and have those snippets show up in searches. However, links to such sites will have the label “subscription” next to them in search results.

These changes come as Murdoch continues to accuse search engines, semi-automated aggregation sites and bloggers who rewrite stories of stealing content from his newspaper empire. News organizations continue to cut back on staff and bureaus as ad dollars continue to flee newsprint. Meanwhile, the Federal Trade Commission is also looking into newspapers’ ongoing trouble adapting their business models to the internet, where information wants to be free (as in beer).

To clear up what this means to readers and publishers, we put together the following FAQ about Google’s changes to the “First Click Free” program:

What has changed?

Publishers and website owners can now limit the number of times you can access their websites for free through Google to five times per day. Google put the new limit in place because “some [publishers] are worried about people abusing the spirit of First Click Free to access almost all of their content.” The previous version didn’t limit the number of pages on a subscription-required (or registration-required) site that users could access from Google’s News or web search. Unless you use Google or Google News to access the same website over and over rather than sampling the full breadth of what’s available, this rule change won’t affect you.

What gives Google the right to index anything for search?

The Digital Millennium Copyright Act allows search engines to list indexes and search results of whatever websites they want, so long as they remove them if asked to do so by copyright holders. Sites that don’t want search engines to index their pages can use a little file called robots.txt to tell search engine spiders to stay away — a voluntary but generally respected system.

What do publishers have to do to take advantage of the program?

If they’re using it for Google News, they need to tell Google. If you want to apply the system to your website in the general Google web search, you don’t need to alert Google; you just need to set up your website so that regular users — and Googlebot — can read at least one entire page (or as many as five) for free during a visit to your website. You would need to set up a request for registration or subscription only after a user clicks through to a subsequent page on your site from Google results.

Are there technical ways around the limits?

Certainly. The limit will likely be cookie-based, so simply clearing your cookies or changing browsers will help. A more clever workaround involves changing your browser’s user agent so it looks to the website like you are Google’s indexing spider. It’s a surprisingly easy change in Firefox, but might be overkill for most users.

Does this make any sense for a site that doesn’t have a paywall?

Yes, sites that require a free registration for repeat users will find this limit useful, and it will let them better track and target users for ads.

What would the immediate effect be if implemented? On Google? On the site? On the reading public?

For most users it won’t change anything. For website owners, it offers a way to monetize content through subscriptions, without disappearing from Google.

Are there any other industries which might want the same deal?

The music industry already has a similar deal with MySpace and Lala on the music side, where you get one free listen of any particular song. Depending on how this new five-page limit goes, record labels and music publishers could experiment with surfacing subscription services through Google.

The same way MySpace and Lala use free Google plays as a teaser for a song purchase, music-subscription services could copy the text-publisher model by offering five songs from various collections, playlists or subscription services for free before asking listeners to subscribe. Video subscriptions could potentially be offered in the same way.

What about using Google to search news and websites by including “site:[domain].com” in a search query (for example, “google news” site:wired.com)?

If a publisher or website joins the First One Free program, you will only be able to use Google’s web search to get to the site’s web pages up to five times a day.

Are there any implications in this modified policy for Google Books or even Google Editions?

Probably not. Google Books is a program under which Google scans works and hosts the digital versions of books in and out of print, so it needs no cooperation from other sites. This policy could be used as an option for wary authors and publishers who decide to have their in-copyright books remain in the search, but want to limit how many books of theirs are seen a day by the same user. Page limits per book are already built in to the system, which we explain in greater depth in our Google Books FAQ. Google Editions is a browser-based e-reader initiative, and the content will be entirely opt-in, so there should be no friction with anyone whatsoever.

Would this affect search only? What about all those stories I see on Google News?

If Google can see an article for indexing purposes, it can display the headline and first sentence on Google News, so nothing changes on that front. This will only affect you if you click through to view news stories or websites.

How does this affect linking? What if I link to a story in my post that that someone can’t read because of this?

Other sites may not have the ability to link to web pages without encountering a registration page or subscription pay wall. Using the link that Google or Google News uses should make it possible for your readers to get to the story without getting the login page.

Who’s most likely to bear the brunt of customer anger when things seem broken? Google or the site?

Things will only seem broken if a user accesses the same news publisher or subscription site through Google for the second to sixth time in a day, depending on where the site has set its limit.

Why is five the “magic” number? Or is it “up to five?”

It’s up to five. According to Google, this achieves a balance between monetizing content and allowing Googlebot and Google users some degree of free access.

Why doesn’t Google just pay every publisher 1 percent of whatever it makes on every click as a good-faith gesture?

Google might answer this question with another question: Why should Google pay 1 percent of its search-engine ad revenue to the websites of the world when the DMCA allows it to display search results for free? Or why shouldn’t websites pay Google for all the traffic that flow to their sites from its searches?


That will be $19.95 please...

52 lectures..."The Western Tradition"

A video instructional series on Western civilization for college and high school classrooms and adult learners; 52 half-hour video programs and coordinated books covering the ancient world through the age of technology, this illustrated lecture by Eugen Weber presents a tapestry of political and social events woven with many strands — religion, industry, agriculture, demography, government, economics, and art.

Produced by WGBH Boston.

Program list:

The Dawn of History

The origins of the human race are traced from anthropoid ancestors to the agricultural revolution.

The Ancient Egyptians

Egyptian irrigation created one of the first great civilizations.

Mesopotamia

Settlements in the Fertile Crescent gave rise to the great river civilizations of the Middle East.

From Bronze to Iron

Metals revolutionized tools, as well as societies, in the empires of Assyria, Persia, and Neo-Babylonia.

The Rise of Greek Civilization

Democracy and philosophy arose from Greek cities at the edge of the civilized world.

Greek Thought

Socrates, Plato, and Aristotle laid the foundation of Western intellectual thought.

Alexander the Great

Alexander's conquests quadrupled the size of the world known to the Greeks.

The Hellenistic Age

Hellenistic kingdoms extended Greek culture throughout the Mediterranean.

The Rise of Rome

Through its army, Rome built an empire that shaped the West.

The Roman Empire

Rome's civil engineering contributed as much to the empire as did its weapons.

Early Christianity

Christianity spread despite contempt and persecution from Rome.

The Rise of the Church

The old heresy became the Roman empire's official religion under the Emperor Constantine.

The Decline of Rome

While enemies slashed at Rome's borders, civil war and economic collapse destroyed the empire from within.

The Fall of Rome

Despite the success of emperors such as Hadrian and Marcus Aurelius, Rome fell victim to barbarian invasions.

The Byzantine Empire

From Constantinople, the Byzantine Empire carried on the traditions of Greece and Rome.

The Fall of Byzantium

Nearly a thousand years after Rome's fall, Constantinople was conquered by the forces of Islam.

The Dark Ages

Barbarian kingdoms took possession of the fragments of the Roman Empire.

The Age of Charlemagne

Charlemagne revived hopes for a new empire in Western Europe.

The Middle Ages

Amid invasion and civil disorder, a military aristocracy dominated the kingdoms of Europe.

The Feudal Order

Bishop, knight, and peasant exemplified some of the social divisions of the year 1000 A.D.

Common Life in the Middle Ages

Famine, disease, and short life expectancies were the conditions that shaped medieval beliefs.

Cities and Cathedrals of the Middle Ages

The great churches embodied the material and spiritual ambitions of the age.

The Late Middle Ages

Two hundred years of war and plague debilitated Europe.

The National Monarchies

A new urban middle class emerged, while dynastic marriages established centralized monarchies.

The Renaissance and the Age of Discovery

Renaissance humanists made man "the measure of all things." Europe was possessed by a new passion for knowledge.

The Renaissance and the New World

The discovery of America challenged Europe.

The Reformation

Voiced by Martin Luther, Protestantism shattered the unity of the Catholic Church.

The Rise of the Middle Class

As the cities grew, new middle-class mores had an impact on religious life.

The Wars of Religion

For more than a century, the quarrels of Protestants and Catholics tore Europe apart.

The Rise of the Trading Cities

Amid religious wars, a few cities learned that tolerance increased their prosperity.

The Age of Absolutism

Exhausted by war and civil strife, many Europeans exchanged earlier liberties and anarchies for greater peace.

Absolutism and the Social Contract

Arguments about the legitimate source of political power centered on divine right versus natural law.

The Enlightened Despots

Monarchs considered reforms in order to create more efficient societies, but not at the expense of their own power.

The Enlightenment

Intellectual theories about the nature of man and his potential came to the fore.

The Enlightenment and Society

Scientists and social reformers battled for universal human rights during a peaceful and prosperous period.

The Modern Philosophers

Freedom of thought and expression opened new vistas explored by French, English, and American thinkers.

The American Revolution

The British colonists created a society that tested Enlightenment ideas and resisted restrictions imposed by England.

The American Republic

A new republic, the compromise of radicals and conservatives, was founded on universal freedoms.

The Death of the Old Regime

In France the old order collapsed under revolutionaries' attacks and the monarchy's own weakness.

The French Revolution

Liberty, equality, and fraternity skidded into a reign of Terror.

The Industrial Revolution

Technology and mass production reduced famine and ushered in higher standards of living.

The Industrial World

A consumer revolution was fueled by coal, public transportation, and new city services.

Revolution and Romantics

Leaders in the arts, literature, and political theory argued for social justice and national liberation.

The Age of the Nation-States

The great powers cooperated to quell internal revolts, yet competed to acquire colonies.

A New Public

Public education and mass communications created a new political life and leisure time.

Fin de Siècle

Everyday life of the working class was transformed by leisure, prompting the birth of an elite avant-garde movement.

The First World War and the Rise of Fascism

Old empires crumbled during World War I to be replaced by right-wing dictatorships in Italy, Spain, and Germany.

The Second World War

World War II was a war of new tactics and strategies. Civilian populations became targets as the Nazi holocaust exterminated millions of people.

The Cold War

The U.S. and Soviet Union dominated Europe and confronted each other in Korea.

Europe and the Third World

Burdened with the legacy of colonial imperialism, the Third World rushed development to catch up with its Western counterparts.

The Technological Revolution

Keeping up with the ever-increasing pace of change became the standard of the day.

Toward the Future

Modern medicine, atomic energy, computers, and new concepts of time, energy, and matter all have an important effect on life in the 20th century.

"The Western Tradition"

Thanks to POSP stringer Tim.

Babette Babich...philosophy and technology

“The question of technology is one of the most important questions in all of philosophy because we, as human beings, live with technology and live on its terms. Something like the Internet is so immediate to us … so intimate in our lives, that we take it for granted and may not realize that it actually plays a role in shaping our thinking.”

"Philosophy Professor Sees ‘Plato’s Cave’ in Today’s Technologies"

by

Janet Sassi

November 30th, 2009

Fordham University

What is life?

That fundamental question fascinated Babette Babich, Ph.D., professor of philosophy, when she was an undergraduate student, so she majored in biology.

But the answer she was looking for was not to be found in the natural sciences. Instead, she discovered it in the dense texts of Friedrich Nietzsche and Martin Heidegger, philosophers whose ideas about life fueled her desire to explore that critical question.

“I also didn’t want to sacrifice hamsters just to study them,” admitted Babich, a contemporary continental philosopher, author of four books, recipient of three Fulbrights and founder and editor of New Nietzsche Studies and editor of a new collection, Heidegger und Nietzsche (Rodolpi, 2009).

Today, Babich moves smoothly between antiquity and the 21st century when rendering commentary about the philosophy of science and technology. At the Lincoln Center campus, Babich teaches Internet-savvy students a course on technology and values, which incorporates Heidegger’s notion that “technology leads science.”

What he meant, for example, is that without a microscope, scientists would not have been able to discover the structure of a cell; without the Large Hadron Collider, no so-called “God particle.” Heidegger even suggested that modern technology challenges natural science and alters humanity’s way of being in the world.

“That concept was a big shock to me,” said Babich, who credits Heidegger with getting her out of biology and into philosophy. Today, the philosophy of science and technology is one of Babich’s biggest interests.

“The question of technology is one of the most important questions in all of philosophy because we, as human beings, live with technology and live on its terms. Something like the Internet is so immediate to us … so intimate in our lives, that we take it for granted and may not realize that it actually plays a role in shaping our thinking.”

Already, Babich noted, the social scientists—including psychologists and sociologists—are looking at the effects of the Internet and cell phones on humans and behavior. Philosophers, said Babich, also need to get involved.

She compares the online world of virtual reality to the view within Plato’s Cave, from a parable in Plato’s The Republic. In the parable, human prisoners have lived their lives chained in a cave, facing only a blank wall. The shadows projected on the wall by real things passing behind them are the only reality they know.

“The Internet gives us shadows to look at, which we take for reality,” said Babich. “When children are harmed because of a posting on the Internet, one can see that, to them, it’s the real thing.”

Because human consciousness has the ability to project one’s full consciousness into a virtual world until the real environment fades away, it is important for philosophers to think about new technologies and their consequences for “being” human, Babich said.

“We are dealing with something very new,” she said. “We have self-representations in the virtual world, yes. But it is not just what you put up—it is also what someone else anticipates and projects.”

The question of technology and self-representation in a civilization is not new to Babich. The ancient Roman historian Pliny claimed that ancient Greek cities, such as Athens, Rhodes or Olympia, were filled with literally thousands of life-sized bronze statues, most likely created with the day’s latest technologies. Babich was curious about why so many statues were there, and what it was like to live in such a world.

Babich hypothesized that the ancient Greeks created the plethora of public statutes from casts of actual persons. The statues provided them with exemplars of excellence against which rank-and-file citizens could measure themselves, thus introducing a kind of competition. These rank-and-file citizens, in a state of “agonistic tension,” found their own reflections in the polished statues.

Today, Babich said, we do the same thing when we catch our own image in a store window, or when we enjoy mingling at an elite event with the elegant people.

“We walk among them, they reflect into us, and we feel as if we are on their level,” she said.

Babich has taught philosophy at Fordham for 20 years and has held a full professorship since 1999. The need to ground philosophy in its own history, she said, is solidly entrenched in Fordham’s core curriculum—and Fordham students benefit from it.

“The Jesuit tradition includes a historical thoughtfulness in the teaching of philosophy,” Babich said. “Philosophy raises crucial questions: What should we do to be moral? What is the nature of the human being? What distinguishes the Fordham undergraduate from students at any of the other metropolitan colleges who ask the same questions, is that he or she pursues the questions in a systematic way with the resources of the last 2,000 years.”

Such a teaching emphasis, Babich said, enables a Fordham student to keep someone like Plato, or St. Thomas Aquinas, or Emmanuel Kant, relevant and modern.

“We can go inside that parable Plato is telling and explain why it is relevant today,” she said.

And philosophers themselves can function like the prisoner in Plato’s parable who escapes his chains, rises to see the real world and to understand the meaning of life, and shares that enlightenment with others, she said.

December 2nd, 1942 and Henry Moore 1967

"Nuclear Energy"

Henry Moore

1967

University of Chicago

Wikipedia...

Nuclear Energy is a bronze sculpture by Henry Moore that is located on the campus of the University of Chicago at the site of world's first nuclear reactor, Chicago Pile. It is on Ellis Avenue, between the Max Palevsky West dormitory and the Regenstein Library. This site is located in the Hyde Park community area of Chicago in Cook County, Illinois, United States. The location commemorates the exact location where the Manhattan Project team devised the first nuclear reactor to produce the first self-sustaining controlled nuclear reaction under the former stands of Stagg Field. It was erected for and dedicated at the celebration of the 25th anniversary of the splitting of the atom on the grounds by Enrico Fermi in December 2, 1942. Thus, it was dedicated at precisely 3:36 p.m. on December 2, 1967. The site of the first nuclear reaction received designation as a National Historic Landmark in February 18, 1965 and was added to the newly created National Register of Historic Places (NRHP) on October 15, 1966 as one of the original designated historic places. Chicago Pile-1 is one of four Chicago NRHPs on the original list. The site was named a Chicago Landmark on October 27, 1971. The sculpture is described as 14.0 feet (4.3 m) in height and 8 feet (2.4 m) in diameter by the Smithsonian Institution, and it sits atop a base that is 1.5 feet (0.46 m) in height and 10 feet (3.0 m) in diameter. However, the University of Chicago says it is only 12 feet (3.7 m) in height. The sculpture was commissioned by the B. F. Ferguson monument fund. The sculpture reminds some of the human skull, while it reminds others of an atomic mushroom cloud.


Chicago and the Manhattan Project

That will be $19.95 please...

The Internet is heading for disaster if the news services peruse a policy of charging for news articles. It is bad enough for scholarly journals to charge per article or high subscription rates but this will be utter confusion and wasted money from users.

"Paid content may not do as well as free options, but that is not a decision we make based on whether or not it's free. It's simply based on the popularity of the content with users and other sites that link to it."

Okay, they want web sites and blogs that reference links to articles and the like and the readers will be forced to pay for such access and information. Would it not be fair for the bloggers and web site owners who post these links be given a percent of the fees charged? Fair is fair. And, can someone accurately define the word and meaning of "news"? This scream about "intellectual property" is a ruse to boost profits. How many times have the articles been incomplete and void of content. This is not good news at all. And what if one visits 50 news sources and pays an annual subscription rate of $50...not worth the investment.

"Google to allow publishers to limit free news access"

by

Jason Deans

December 2nd, 2009

guardian.co.uk

Google is to allow publishers of paid for content to limit the amount of free access internet users have to their websites from Google News.

The move, announced by the Google senior business product manager Josh Cohen late yesterday, comes after mounting criticism of the search engine giant from newspaper publishers, not least the News Corporation chairman and chief executive, Rupert Murdoch.

Just yesterday, Murdoch accused online aggregators such as Google News of "theft" of content, speaking at a US media regulators' workshop on the future of journalism in the internet age in Washington.

Murdoch plans to put News Corp content, including from UK newspapers such as the Sun and the Times, behind a paywall and has threatened to remove it from Google's search index and Google News.

However, Cohen said publishers would be able to charge for their content and still make it available via Google following the changes announced yesterday. "The two aren't mutually exclusive," he added, on a Google News blog.

Cohen said Google had achieved this by updating its First Click Free programme, so that publishers can limit Google News users to looking at no more than five pages of content a day without registering or subscribing.

"If you're a Google user, this means that you may start to see a registration page after you've clicked through to more than five articles on the website of a publisher using First Click Free in a day ... while allowing publishers to focus on potential subscribers who are accessing a lot of their content on a regular basis," he added.

Cohen said that Google will also begin crawling, indexing and treating as "free" any preview pages – usually the headline and first few paragraphs of a story – from subscription websites.

"We will then label such stories as "subscription" in Google News. The ranking of these articles will be subject to the same criteria as all sites in Google, whether paid or free," he added.

"Paid content may not do as well as free options, but that is not a decision we make based on whether or not it's free. It's simply based on the popularity of the content with users and other sites that link to it."

"These are two of the ways we allow publishers to make their subscription content discoverable, and we're going to keep talking with publishers to refine these methods. After all, whether you're offering your content for free or selling it, it's crucial that people find it. Google can help with that."

It remains to be seen whether this will placate Murdoch, who told the US Federal Trade Commission workshop yesterday: "Producing journalism is expensive. We invest tremendous resources in our project from technology to our salaries. To aggregate stories is not fair use. To be impolite, it is theft.

"Without us, the aggregators would have blank slides. Right now content producers have all the costs, and the aggregators enjoy [the benefits]. But the principle is clear. To paraphrase a great economist, [there is] no such thing as a free news story."

"Media execs make case for online fees at FTC panel"

by

Joelle Tessler

December 1st, 2009

Associated Press

Rupert Murdoch, News Corp.'s chairman and chief executive, sees a promising future for publishers that can adapt to the Internet age. Key to survival, he said, is giving consumers what they want, how they want it - be it on a computer, mobile device or e-reader - and then charging for it, as his company does with The Wall Street Journal.

"We need to do a better job of persuading consumers that high-quality, reliable news and information does not come free," Murdoch said. "Good journalism is an expensive commodity."

Murdoch's comments were echoed during the Federal Trade Commission's workshop, which explored the challenges facing media companies and ways the government can help them survive.

Newspapers, broadcasters and other traditional media companies are in distress as the growth of their online revenue has failed to keep pace with sharp declines in the offline advertising that has historically supported their operations.

The FTC holds periodic workshops on developments across a range of industries, from health care to targeted advertising. In the two-day journalism workshop that began Tuesday and concludes Wednesday, media executives came to discuss new business models and government officials sought ways they might protect a critical pillar of democracy - a free press.

"News is a public good," FTC Chairman Jon Leibowitz said. "We should be willing to take action if necessary to preserve the news that is vital to democracy."

Leibowitz stopped short of endorsing specific proposals, although he noted that government support for the media has precedent - such as with requirements that legal notices be printed in newspapers.

Among the options being discussed now: tax changes that would allow media companies to earn tax credits or become tax-exempt entities, and copyright law changes that would force search engines and other online aggregators to compensate media companies for the content they produce.

Also on the table is a proposed change in antitrust rules to allow newspapers to jointly negotiate payments from Web sites that use their content.

Many of Tuesday's speakers urged the government to remain on the sidelines, allowing the free market to weed out the publishers unable to evolve.

"The bold will survive and the timid will fail," said Chris Ahearn, president of media for Thomson Reuters Corp., which specializes in financial news and data.

Srinandan Kasi, general counsel for The Associated Press, also participated in Tuesday's session. The AP, a not-for-profit news cooperative founded in 1846, is experimenting with ways to increase its online revenue through a mix of advertising and higher fees imposed on Web sites that license its stories and photographs.

The FTC will hold more workshops in the spring to discuss the ideas that emerge this week in greater depth. It could offer legislative recommendations to Congress.

Many newspapers have been drawing up plans to charge people to read at least some of the stories on their Web sites. It's a radical shift from the main model for online news for the past 15 years, in which publishers mainly gave it away. That hasn't worked out because it has contributed to a sharp decline in readership of print editions - where ads generate about 10 times more revenue than Internet ads.

Journalism Online, a startup developing a payment system for newspapers and magazines, will start sending out its software next week so it can be tested during the final weeks of the year, said Steven Brill, Journalism Online's co-chief executive. He didn't identify which publishers are involved in the initial tests, saying only that more than 1,300 newspapers, magazines and blogs have signed letters of intent to use Journalism Online's system.

The industry is still debating the risks of charging for online material - it could just drive readers to the abundant free sources likely to remain. But in some cases, such as at The Wall Street Journal, online fees can pay off.

The 407,000 online subscribers that the Journal listed in its latest circulation report helped it overtake USA Today as the nation's top-selling newspaper. And if not for the online fees, the Journal would probably employ 280 to 290 fewer newsroom employees than it does today, said Robert Thomson, the Journal's managing editor.

"The Internet age cannot just be the triumph of amateur hour," Thomson said.


The shrinking Internet

Heavy metals from China

The elements at the bottom of the periodic table are rare and could well be monopolized by China. Maybe it might be time to adjust your investment portfolio.

"Heavy metal"

by

Robin Powell

November 18th, 2009

Prospect

China’s monopoly on rare earth metals could choke economies across the world.

Cast your eyes down to the lower reaches of the periodic table, and you find a row of exotic-sounding elements that you probably never got to in chemistry lessons. Here lie 17 elements known as rare earth metals, a group consisting of lanthanides (atomic numbers 57-71), scandium (21) and yttrium (39)—the latter owing its name to the similarly unpronounceable Swedish town where it was discovered in the late 18th century. Yet rare elements are not quite as unusual as their names might suggest. In fact, they are everywhere: in your mobile phone, hard disk drive, iPod headphones, plasma television, and hundreds of other electronic and industrial products. And now their supply is under threat.

Global demand for these metals has more than doubled over the past decade, as ever more devices make use of their unique properties. Rare earth phosphors in your television screen make the colours bright, while super-strong rare earth magnets allow electric motors to be compact enough to fit in a car, and headphones small enough to fit in your ear. Japan manufactures many of these goods and is the world’s biggest importer of the metals. The car giant Toyota aims to sell around 1m hybrid cars a year from 2010—a huge jump if you consider that it has sold 2m hybrids in total since 1997. With several kilograms of rare earth metals in each hybrid car, Toyota, Honda and other car-makers will have to stock up to avoid bottlenecks.

The problem is that there is only one seller: China, with 95 per cent of the world’s supply. Not only does China dominate the production of rare earths, it also leads the field in extraction. That means, for example, that when Japan buys rare earth minerals from countries other than China, it still has to pay Chinese factories to extract the pure metal. All of this wouldn’t be an issue if China was keen to sell. But, increasingly, it isn’t. Beijing has cut export quotas steadily, from 48,500 tonnes in 2004 to 31,310 tonnes in 2009. And in August, China proposed capping rare earth exports at 35,000 tonnes for each of the next six years; barely enough to satisfy the current Japanese market, let alone the world. Even worse for companies like Toyota, China is planning to entirely phase out some forms of dysprosium, a vital component in the magnets of electric car motors. Without dysprosium, the magnets won’t work at high temperatures, meaning in theory that your hybrid car could stop dead as you hit the motorway. Prices of the metals were rising fast before the global recession—a kilo of dysprosium hit $120 in 2007, up from $35 in 2004—and have started their rapid climb again following China’s announcement.

So what is going on? China certainly isn’t running out; it has the metals in abundance. Rather, as Shigeo Nakamura, head of the trading company Advanced Metals Japan, told me, China has a new strategy to boost its own high-tech manufacturing sector. Chinese companies stand to make handy profits by making and selling components that use the metals (like electric car motors), instead of simply selling the raw material. Such moves have already brought a chorus of corporate complaints, and the recently elected Japanese government even made securing rare metal supply a manifesto pledge. China’s response so far has been to claim that because it has such large reserves it must restrict exports, or the market would flood and global prices would fall. Unconvinced, the US and EU have already asked the WTO to investigate.

This economic gamesmanship is forcing developed countries to mimic China’s own aggressive courtship of mineral-rich African regimes: Jogmec, a Japanese body charged with securing stable resources for Japan’s industry, has already struck deals with several African countries, most recently Botswana, to develop new mines. Western companies, meanwhile, are looking anew at old assets. In California, the mining company Molycorp has reopened its Mountain Pass mine, one of the world’s richest until Chinese competition put it out of business in 2002. Yet even these efforts are unlikely to head off a bout of national panic buying. Japan has an emergency stockpile of rare metals used in steel products, and plans to increase its stock of others. But such measures won’t relieve pressure on manufacturers outside China if the cost of rare earths continues to rise; they may be faced with a stark choice of hiking up their own prices, or relocating to the People’s Republic. Senior government advisors in Britain draw a blank when asked about this scenario. Britain may not have a manufacturing sector the size of Japan’s, but the consequences of a trade monopoly in rare earths would still be disastrous.

There is no viable rare earth substitute. Other metals have been tested, but they don’t work. Scientists have had some success in reducing the amount of rare earths needed in products, but not enough. Efforts being made to reuse and recycle the many tonnes of rare earth metals currently thrown away (in discarded mobile phones, hard drives, and so on) are unlikely to make a difference on their own. Even if any of these initiatives do eventually succeed, new mines still take years to build, and new scientific techniques take just as long to be adapted for commercial use. China’s former leader Deng Xiaoping once noted that “while the middle east has its oil, China has rare earths.” His words may be even more prescient than he realised.

The shrinking Internet

This is not good news at all but time will determine its impact.

"Google to limit free newspaper articles"

by

Jefferson Graham

December 1st, 2009

USA TODAY

Google, which has come under fire for making newspaper content easier to read without buying a paper edition, made changes Tuesday to allow publishers more control of their content.

Google updated its First Click Free program to let publishers limit online readers to looking at no more than 5 pages of content per day without registering or subscribing.

"If you're a Google user, this means that you may start to see a registration page after you've clicked through to more than five articles," writes Google's senior business product manager Josh Cohen on a Google blog.

That way, the publisher still gets its articles indexed, while at the same time, can charge for reading. The pieces will be labeled as "subscription" in Google News.

Recently, the blogosphere has been aflutter over News Corp. CEO Rupert Murdoch's suggestion that he might take Wall Street Journal online content (which is a subscription service) away from Google, because WSJ.com articles can be read for free via Google.

Google's new policy might help satisfy Murdoch -- but there are potential risks. Google says subscription content won't necessarily be at the top of the search findings. "That is not a decision we make based on whether or not it's free," says Google. "It's simply based on the popularity of the content with users and other sites that link to it."