Will Google’s Goodwill Campaign Appease Publishers?

Here’s how the battle between Google and the news business is playing out: Big publishers, including the Associated Press and News Corp. (NWS), huff and puff loudly about the way the search giant treats them. They threaten to take their ball and go home, but they don’t actually do it.

And Google (GOOG) shrugs and says it can’t understand what the publishing guys are complaining about it, but goes ahead and makes goodwill gestures anyway.

By my count we’re up to three such gestures in the last nine days:

• Dec 1: Google changes its “First Click Free” program, making it easier for news sites to wall off access to their premium stuff–or harder for users to game the sites, if you want to think of it that way.
• Dec. 2: Google makes it easier for publishers to delist themselves from Google News.
• Dec. 8: Google launches a “Living Stories” experiment with the New York Times (NYT) and the Washington Post (WPO), which offers a new way to sort and read the papers’ stories. If it makes sense to you, let me know.

None of the above has anything to do with the publishers’ main complaint, which is that Google is simultaneously profiting from and devaluing their product. But it does allow Google to say that it’s listening to, and even working with, publishers.

Google could appease publishers simply by cutting them bigger checks, but that’s a slippery slope the search giant is trying to avoid. And the biggest publishers could put more oomph behind their argument if they really did cut themselves off from the search giant’s index. But tellingly, none of them have actually done this to date.

So I think we’re going to be stuck here for some time.