In Google’s way of looking at the world, she explained, any product that simplifies a task for consumers better delivers “the world’s information” to them. Which is another way of saying: Google engineers should imagine that search can be anything that makes a current system more efficient. Searching for a better way to display ads or a better advertising rate-or a better alternate energy source to reduce costs-are forms of search.

The answer is consonant with the Google culture. Understand this Google bias and you’ll better understand why it is a wave-generating company that other media companies ride, crash into, or are submerged by.

“I think they’re naive, not evil,” said CBS’s Quincy Smith. He said his friend Marc Andreessen thinks he’s naive to be so trusting. But Smith doesn’t subscribe to a conspiracy theory because “I don’t think anybody can be that smart.” Not that he’d allow Google to take over CBS’s ad sales function-“That would be letting the fox in the henhouse,” he said. However, having marinated in Silicon Valley for most of his professional life, Smith approaches Google as a potential partner, not adversary. He wants CBS to play offense. Pacing the floor of his new Menlo Park office, he said that media companies fail to understand that Google is a platform. “CBS has sixty-five thousand advertisers, and only fifteen thousand are core advertisers. Google has millions of advertisers.” By placing two- or three-minute clips on YouTube, CBS can sell advertising off those clips. Smith doesn’t believe Google is a content competitor. He does believe that the more CBS places its content on Internet platforms, “the less chance there is for piracy”; a two-minute CSI clip on YouTube watched by two million people is a fantastic way to enlarge CSFs audience. He is encouraged that CBS CEO Les Moonves wants CBS to play offense. Smith, however, was mindful that he was now a member of the broadcast fraternity-and presumably, though he didn’t say it, that his controlling shareholder was Sumner Redstone. “My objective is to be a little bit ahead of the pack, not a lot,” he said.

Eric Schmidt, who admitted in September 2007 that relations with traditional media companies were frosty, was more encouraged in September 2008. “The CBS deal is one” example of detente, he said. “We’ve done a series of deals. They are slowly happening.” Of course, he added, “it would be much better if I could point to a billion-dollar new revenue stream.” To try to calm advertising agency fears, Google established a forty-person team to visit agencies and assure them that Google was not a competitor, just another company that had products their clients would want to use and that could share valuable customer data with them.

To ease the fears of content providers, Google turned to David Eun, vice president of strategic partnerships. A soft-spoken man who displays few rough edges and who once served as a senior executive at Time Warner and NBC, Eun today supervises a staff of about two hundred employees out of New York. He and his partnership team made some deals for YouTube. HBO and Showtime agreed to run a handful of their full programs on YouTube, accompanied by ads; MGM licensed some of its movies, and music companies supplied videos. With a new antipiracy technology they called the Video Identification System (VID), YouTube has now archived the reference file numbers for companies’ content and set its computers to scan all uploaded material to determine whether numbers match. If they do, content companies are offered three choices: they can have YouTube take the clip down; let it run and monitor audience reaction; or sell ads against it, as CBS agreed to do in late 2008. David Eun pushed for the third option because he believes content companies, in addition to selling ads off this content, can collect valuable data. “The audience is telling you what they like,” he said. YouTube can monitor what content is uploaded and shared with friends, how much time users watch it, or what they click on. “These are like the presidents of your fan clubs. Would you arrest the president of your fan club?

“The headline here,” said Eun, “is that there has been a dramatic shift” in traditional media’s attitude toward YouTube. He singled out Quincy Smith as “one of the few people who seems to truly understand so-called new media versus traditional media.”

Eun made a larger point about how very different this new medium really is, how control has shifted to users. In the digital world, advertising is not locked into a time and space. Ads are interactive, allowing users to click to remove them from the screen or to fill the screen, to treat them as information and go deeper to learn more and make a purchase, or to forward the ad to a friend. “Traditional media was about bringing the audience to where you decided the content was going to be,” said Eun. Media companies would announce when a movie would open, a DVD would go on sale, a record would be released, a show would be scheduled on television, a book published. “It was about control. This is no criticism. That was the business. They created a huge, multibillion-dollar business. In this medium, the new media, it is not about bringing the audience to where the content is. It’s about taking the content to where the audiences are. And the audiences are all over the Web.” Not just YouTube but thousands of sites become potential platforms.

Because this is a very different model than traditional media is accustomed to, and because they have legitimate concerns about giving content away cheaply, “No one wants to be the first to jump into the pool, or be the last,” said a Google executive. The old media companies “are all clumped together. And if one breaks out-as Bob Iger did when he put Disney content on iTunes-then all follow. It is an industry that follows.”

Google did achieve a dramatic breakthrough when, in October 2008, it reached an accord with the U.S. publishing industry. The industry agreed to drop its lawsuit, subject to approval from the court; and Google agreed to pay $125 million to settle earlier copyright infringement claims, to reimburse publishers’ and authors’ legal fees, and to establish a system that will permit publishers and authors to register their books and receive a payment when these are used online. Individuals or institutions will be able to read up to 20 percent of out-of-print but copyrighted books, and either purchase digital copies or search them using Google, and publishers and authors will receive 63 percent of any sales or ad revenues, with Google taking the rest. Libraries will be able to display these digital copies for free; colleges and universities will, for a subscription fee, allow students to retrieve books online. Book titles still in print would be available to be purchased or searched, but only if approved by author and publisher. At the time of the agreement, Google Book Search had already scanned seven million of the estimated twenty million books that have ever been published. By winter, Brin said, Google was “able to search the full text of almost ten million books.”

There are two potentially momentous shifts here: First, Google had conceded it must pay for some content. And second, Google was not relying on a promise of advertising revenues to reach an agreement; rather, it agreed to an up-front compensation formula of a sort it had refused to make with other traditional media companies, with the exception of the Associated Press and some wire services. “It’s a new model for us,” admitted Google’s chief legal officer, David Drummond.

This new model was lavishly praised by authors and publishers, but it raised new questions. Was Google going to enter the online book-selling business, competing against an early investor, Amazon’s Jeff Bezos? With Microsoft dropping its book search project and no other deep-pocketed competitor jumping in, did the agreement concentrate too much informational power in the hands of a single company? Did Google have the right, as it claimed, to sell digital copies of books whose copyright had expired? If it is true-as the Internet Archive, a competitive book digitizer, claims-that the settlement grants Google immunity from copyright infringement, will the courts permit this? What of so-called orphaned books, those whose copyright owners can’t be identified-does Google, as it claims, get to own the digital rights? Will there be any regulation of the prices Google may charge libraries and colleges for access to digitized books? What will be the outcome of new lawsuits challenging this and other aspects of the settlement? And what impact would the publishing accord have on the Viacom lawsuit and Google’s dealings with other media companies seeking compensation for their content?