Google News Opens Pandora's Box

(Note: This is a post submitted by BNET member Sean Blanda, whose bio appears below. To submit your own post, click here.)

Google News’s value to newspapers is debated frequently within the media industry. Is it a traffic-generating friend or pageview-stealing foe?

Concerns are usually answered with the fact that Google doesn’t make a dime from its news aggregation service. However, Google VP Marissa Mayer may have just taken that argument off the table. By telling Fortune that Google rakes in an estimated $100 million in revenue from Google News, Mayer may have given fuel to the service’s sharpest critics, and even worse — their lawyers.

While this is evidence to many that the search giant is stealing business, the estimated revenue comes from referrals to Google’s main business: Ads served during searches. Google has had to fend off more than just accusations over the ethics of posting links to news Web sites, with some companies resorting to lawsuits. Now the company may have paved the way to further litigation by admitting it is profiting from content providers who never receive a check.

As reported here a few days ago, Google is already treading on some thin ice, and the announcement of a profitable Google News likely won’t ease nerves at already jittery news companies.

Sean Blanda is a freelance journalist located in Philadelphia, PA.