AP Hopes to Put the Squeeze on Google, etc.

(MoneyWatch) 

This has been a rough year for the Associated Press, and lately, the 163-year-old news cooperative has been feeling its age. Its execs have lashed out at the "Internet" as the source of all evil in its battle to survive the historical transition to the new world of interactive, networked, social and mobile media. They've also announced ambitions to become a news portal.

But the AP is also taking some more promising moves, such as a recent deal to begin distributing investigative reports from four non-profit journalism organizations. The essential problem that the AP is trying to address is a devastating loss of revenue from struggling newspaper and broadcast companies.

Thus, in an in-house interview late yesterday, the AP's CEO Tom Curley disclosed that the cooperative is reducing the fees it collects from newspapers by $45 million next year, after already reducing such fees this year by $30 million. For some perspective, that amounts collectively to ten percent of AP's total annual revenue, which reached $748 million last year.

Furthermore, reflecting the disastrous conditions most of its member companies are enduring at present, Curley said he expects AP's overall revenue to fall both this year and next.

But the main purpose behind Curley's interview, I thinking, was not to deliver this bad business news at this particular time, but to engage in another of his (very public) round of negotiating with its largest Internet customers -- Google, Yahoo, Microsoft, and AOL.

"The Google contract, which expires at the end of this year, could be the trickiest -- and most important -- negotiation," explains to the AP report.

In other words, the AP reporter who conducted this interview got it right in his lede: "The Associated Press hopes to negotiate more lucrative licensing deals with major Web sites..." wrote Michael Liedtke for his report, before going on to cover the matters discussed above.

The AP is planning to eliminate an additional 10 percent of its payroll costs by the end of this year, BTW, so expect more layoffs to come.