Update: Includes response from Google.
Google confirmed yesterday that the company is paying the Associated Press (AP) for its content and that content will be used as the foundation for a new product that will complement Google News.
According to the AP, the deal, which has been in place for months, helps Google avoid further dispute with the non-profit AP, which argued that Google's news search service, Google News, unjustly used the AP's words and photographs.
Google has long argued that providing pointers to news is a practice covered by fair use copyright protections.
Neither companies disclosed terms of the deal, according to the AP.
"The license in this agreement provides for new uses of original AP content for features and products we will introduce in the future," said a Google spokesperson. "We are very excited about the innovative new products we will build with full access to this content."
Google News is Google's 4th most popular product, according to data from Hitwise, garnering 1.38 percent of all traffic to Google.
Google News is unpopular among many publishers, who say that Google's computer-based news search undermines the editorial process and takes traffic away from news sites.
The AP is a 158-year-old not-for-profit service owned by U.S. news companies. Unlike news agencies such as Reuters, the AP does not publish its content on a central Web site and thus does not benefit from traffic driven by Google News.
The AP has lately been trying to modernize its Internet operations. In March it released its online video network, a video news service that allows individual site owners to publish AP videos to their sites.
Google is currently being sued by another news wire service, Agent France Presse, which is seeking $17.5 million in damages for copyright infringement.
The AFP's attorney, Joshua Kaufman, said he believes the AP-Google agreement supports AFP's position that copyright protected content should be paid for.
"All AFP has ever sought from Google was reasonable compensation for the past uses of its content and a go forward market value license to use its content in the future," said Kaufman in an e-mail interview. "Google's refusal to pay a reasonable license fee for the AFP content is why AFP felt in necessary to file suit."
That case is continuing in the U.S. District Court in Washington, D.C. A status conference between the parties is set for November.