Something similar happened when the hardcover edition of “Networking is Dead,” was published in mid-December. A week after selling enough copies to make it onto the Journal’s business best-seller list, more hardcover copies of the book were returned than sold, says book-sales tracker Nielsen BookScan.

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As part of the deal, a French author association that had been suing Google for copyright infringement said it had agreed to withdraw its lawsuit, the last such pending suit in France after other publishers withdrew theirs last year.

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Bradbury was the author of such books as “The Martian Chronicles,” “Fahrenheit 451,” “Something Wicked This Way Comes,” and “The Illustrated Man.” His wildly imaginative work blended surprisingly accurate forecasts on scientific and social trends with often poetic prose.

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A letter sent to shareholders today by founder and CEO Jeff Bezos, titled “The Power of Invention,” tackles the publishing industry head-on by explaining how both authors and customers are benefiting from its Kindle publishing business.

While Bezos fails to address the DOJ lawsuit, which accused Apple and five major book publishers of conspiring to raise e-book prices, he provides a glimpse at how he’s changing the economics of the business on a small scale.

Bezos says Amazon’s Kindle Direct Publishing division has already produced more than a thousand authors who are selling more than a thousand copies a month. Some have reached hundreds of thousands of sales, and two have joined the Kindle Million Club.

Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43.”

If you can’t take Bezos at his own word, the letter includes eight quotes from customers and authors who have benefited from Amazon’s services, including its publishing, fulfillment and Web services.

“These innovative, large-scale platforms are not zero-sum — they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers,” he wrote.

The company’s stock was trading down 1.81 percent, or $3.46 a share today, to $187.23. In recent months, the stock has slipped from its 52-week high of $246.71 a share.

The position of the anti-SOPA activists is antithetical to the principle of protection — for authors, that is — mandated in the Constitution of the United States. Our nation’s founders recognized that furthering the rights of creators is in the national interest, to “promote the progress of science and useful arts” by “securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Over the centuries, copyright protection has been codified in an expanding body of federal law in an attempt to implement the protection outlined in the Constitution.

The SOPA debate is emblematic of the growing tension between the copyright creator — the authors, composers, lyricists and artists who have contributed so much to the socio-economic fabric of American life — and the “interests” of the public in having free access to the works of others. However, the creator/public dichotomy is a false paradigm. What is truly at stake are the competing interests of the creators and the corporations who have acquired and are exploiting their works.

It is the rare creator who has the luxury to create simply for the sake of creating. As history has shown (every Renaissance artist worth his canvas had a patron), in order for creators to enjoy the benefits of their creations, it is necessary for them to cross over into the world of commerce, and to seek the patronage of publishers, record labels, and film and television producers. Sadly, the relationship between creator and corporate sponsor is seldom equal, as evidenced by the scores of documents executed by authors, songwriters and other creators, granting the rights in their works to corporate entities in perpetuity, often in exchange for modest compensation.

Congress attempted to include in the Copyright Act a series of provisions to give the creator (or the heirs of a deceased creator) the opportunity to terminate even perpetual grants of copyright, and “recapture” rights to their works in the U.S. These provisions, known as the “termination provisions,” were first introduced as part of the Copyright Act of 1976, and later modified as part of the Sonny Bono Copyright Act of 1998.

The intent of Congress in enacting the termination provisions was clear: To give creators, or their heirs, the opportunity to escape inequitable deals, or simply to revise the terms of their deals in order to share proportionately in the success of their creations. And, indeed, the opportunity to recapture rights is a potentially valuable asset for creators and their statutory successors. Yet, outside the music industry, the termination right is significantly underutilized, while even songwriters and recording artists are often thwarted in their attempts to recapture rights in a process made unduly complicated in response to pressure from corporate lobbyists.

Like the termination provisions, the real value of SOPA and other copyright enforcement legislation is its role in safeguarding the interests of the intended beneficiaries of copyright protection. Whether or not SOPA is the most effective means of curbing piracy in the online arena is a matter that should be thoroughly examined. However, the SOPA debate should not be commandeered as a vehicle for furthering the position of those who seek to write authors out of the copyright law and the Constitution.

Lisa A. Alter is a partner in the firm of Alter & Kendrick, LLP, in New York City. Her practice is focused primarily in the area of copyright law, with a particular emphasis on domestic and international music copyright issues. Ms. Alter has lectured frequently at law schools and professional meetings on copyright matters, and has represented clients on legislative matters impacting their copyright interests. She is the author of “Protecting Your Musical Copyrights,” which has recently been released in its second edition.

In March, Denny Chin, now a U.S. Circuit Judge in Manhattan, rejected a revised $125 million deal to resolve separate lawsuits over scanning books for online distribution by Google via its Google Books site. In his decision, the judge found the pact would give Google the ability to “exploit” books without the permission of copyright owners.

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Amazon.com Inc.’s top 50 digital best-seller list featured 15 books priced at $5 or less on Wednesday afternoon. Louisville businessman John Locke, for example, a part-time thriller writer whose signature series features a former CIA assassin, claimed seven of those titles, all priced at 99 cents.

“They’re training their customers away from brand name authors and are instead creating visibility for self-published titles,” one senior publishing executive who asked not to be identified, says of Amazon.

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In a 48-page decision, Denny Chin, a judge on the 2nd Circuit Court of Appeals, denied the 2008 settlement between Google, authors and publishers “without prejudice,” meaning they could submit a revised pact that would better protect copyright owners. The judge also suggested a potential solution.

“While the digitization of books and the creation of a universal digital library would benefit many,” Google’s current pact would “simply go too far” because Google could make books available online without copyright owners’ permission, Judge Chin wrote.

The deal would “give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission,” he said.

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Or, if you prefer, you can think of them as very long magazine articles. Here’s the company’s description of the new program:

Today, Amazon is announcing that it will launch “Kindle Singles”—Kindle books that are twice the length of a New Yorker feature or as much as a few chapters of a typical book. Kindle Singles will have their own section in the Kindle Store and be priced much less than a typical book. Today’s announcement is a call to serious writers, thinkers, scientists, business leaders, historians, politicians and publishers to join Amazon in making such works available to readers around the world.

Amazon being Amazon (AMZN), there’s nothing else of substance in its press release, but I have asked the company to answer some basic questions. From my email to Amazon PR:

1) Please provide an anticipated pricing range
2) Please explain how wholesale pricing will work
3) Is this program directed at conventional publishers, or does Amazon anticipate that most of the Singles will be self-published by the authors themselves?

UPDATE: Here’s Amazon’s response. Apologies for not getting these up sooner: Amazon sent them along shortly after I posted my story Tuesday morning, but somehow they were swallowed up in an email vortex–some sort of recurring problem I have with Apple Mail client and Google App email.

Anyway:

1) Prices will be less than a typical book.

2) With any particular publisher, pricing and terms will be consistent with our general terms with that publisher.

3) We expect to work directly with publishers and also for writers themselves to publish Kindle Singles.

When cards really attack

I’m intrigued, though, by the idea that the iPad, and eventually other tablet devices will give rise to a hybrid medium—call them book apps—that mix text with video, sound and game-like interactivity.

After sampling several early examples of these books apps, I’ve seen some tantalizing hints of the creative possibilities for authors and publishers who recast themselves as app makers.

I focused on kids’ books because they’re among the first to cleverly exploit the iPad’s capabilities and their rich illustrations can look great on the iPad’s color screen. It also helped that my 7-year-old daughter and 3-year-old son were fascinated with the iPad, looking for any opportunity to smudge up its touch screen.

The most interesting of the book apps I found in Apple’s (AAPL) online App Store was “Alice for the iPad,” a 52-page version of “Alice in Wonderland” by a small company called Atomic Antelope that costs $9.99. (A shorter “lite” version of the book is free.) The color illustrations for “Alice for the iPad” are based on the elegant wood engravings Sir John Tenniel did for the original 19th century “Alice’s Adventures in Wonderland,” which, like the text of the book, are now in the public domain.

White Rabbit’s pocket watch swings as you tilt the iPad.

The first sign there’s something different about “Alice for the iPad” comes when you flip to its third page, where the White Rabbit’s old-fashioned pocket watch, dangling by its chain from text, starts swinging whichever way the reader is holding the iPad. Other animated objects appear on later pages—a jar of marmalade, and collection of mushrooms—and move when you tilt the iPad or touch an object and drag it across the screen.

The animations can be predictable. On a page where Alice eats a cake that shrinks her body, a pile of cupcakes falls to the bottom of the screen, accumulating in an undamaged little pile, an action repeated on many pages with other objects. How much cooler would it be for the cupcakes’ frosting to get messy when they drop? I wanted to be able smear them all over the text on the page.

Still, there are wonderful moments in “Alice for iPad.” My favorite is when Alice is assaulted by a pack of flying playing cards. Alice’s arms and body bobble as a blizzard of cards slams into her. My daughter and I couldn’t resist trying to make the cards pile up on her by angling the iPad just so.

There’s something fitting about the sensation of gravity that the animations bring to a story with so much body-shrinking and mind-blowing going on it. It will be exciting to see what the Atomic Antelope crew does with their next project: an iPad version of “The Wonderful Wizard of Oz.”

“The Lorax” ($3.99, also for the iPhone) from Oceanhouse Media is a vivid rendition of the Dr. Seuss classic, with some nice features to assist early-readers.

The app lets you read “The Lorax” like a traditional book, but with fun atmospheric sound effects like the sound of wind blowing and old crows cawing.

With my son, I choose another option that reads the book to him in a narrator’s voice. Words on the page were highlighted as the narrator said them.

While there’s no animation, one nifty feature of “The Lorax” app lets readers tap objects, like faucets, rocks and pails, to hear their names sounded out. My son was particularly fond of tapping to hear the words “Grickle-grass” and “Once-ler” over and over again.

The iPad version of “The Lorax” was the most static of the book apps I looked at, but considering the modest interactivity it brought to a lovely reproduction of a classic kids’ book, it was worth the price.

“Miss Spider’s Tea Party for the iPad” ($9.99) from Callaway Arts & Entertainment is based on a picture book about a lonely, tea-sipping spider that longs to make friends with other insects. The app narrates the story to readers or lets them read it on their own. Bumblebees, beetles and other illustrated characters make noise and move when readers tap on them—another big hit with my son.

The app also lets you passively experience the story as a short animated movie. With another option, you can assemble puzzles or color in paintings featuring the story’s characters.

“Miss Spider’s Tea Party” illustrates an approach I predict many book-app creators will take: tacking a lot of multimedia material onto an electronic book, without paying enough attention to weaving it all into one coherent story.

This app can’t decide whether it’s a book, a movie or a game.

I believe it’s a matter of if, not when, the great book apps for iPad will show up. I wager the good book apps will be original works, rather than adaptations of existing books, with an electronic version built from the ground up that will take advantage of the device. For now, “Alice for iPad” is the coolest book app out there.

Walter S. Mossberg will return June 24. Email Nick Wingfield at nick.wingfield@wsj.com.

“Although the United States believes the parties have approached this effort in good faith and the amended settlement agreement is more circumscribed in its sweep than the original proposed settlement, the amended settlement agreement suffers from the same core problem as the original agreement,” the DOJ said in a filing with the U.S. District Court for the Southern District of New York.

“It is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation,” the report continues. “Under the [revised proposal], Google would remain the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats. Google also would have the exclusive ability to exploit unclaimed works–including so-called ‘orphan works’–without risk of liability.”

And then there was this:

Google’s exclusive access to millions and millions of books may well benefit Google’s existing online search business. Google already holds a relatively dominant market share in that market. That dominance may be further entrenched by its exclusive access to content through the ASA. Content that can be discovered by only one search engine offers that search engine at least some protection from competition. This outcome has not been achieved by a technological advance in search or by operation of normal market forces; rather, it is the direct product of scanning millions of books without the copyright holders’ consent.

In other words, the amended deal continues to give Google (GOOG) significant anticompetitive advantages and rewards the company for scanning books in violation of copyright protections. And while the Justice Department did not go so far as to explicitly urge rejection of the deal, it recommended that parties to the settlement make further changes before the Feb. 18 fairness hearing at which it is to be reviewed.

Another setback for Google, or as Gary Reback–a Silicon Valley antitrust lawyer who represents Microsoft (MSFT) and the Open Book Alliance, a coalition opposed to the settlement–said, the filing is a “profound embarrassment–bordering on an outright humiliation” for the search company.

Amazon.com (AMZN), one of the most outspoken critics of the original settlement, Wednesday filed an objection to revised one, raising many of the same objections it made to the first. In particular, the books giant argued that the agreement overreaches and violates the U.S. Copyright Act. “The (settlement) continues to give Google exclusive rights likely to lead to a monopoly,” it read.

U.C. Berkeley Professor Pam Samuelson submitted an objection on behalf of a group of academic authors. “We do not believe that the settlement of a class action lawsuit is a proper way to make such a profound set of changes in rights of authors and publishers, in markets for books, and procedures for resolving disputes as the (settlement) would bring about,” the letter read.

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Starting this summer, the e-commerce giant will offer a 70 percent royalty rate for books published on its self-serve Digital Text Platform, up from the 35 percent of the list price it currently offers. The offer comes with a series of strings attached, but all are aimed at the same goal: Selling titles at the lowest possible price.

This won’t be relevant for most of the mass-market titles, whose publishers negotiate individually with Amazon (AMZN). But it will be relevant for Kindle owners, who tend to be price-sensitive types who flock to low-cost and no-cost titles.

Amazon has two goals here. The company wants to push e-book prices down, which should help it sell more e-books and more Kindles. And it wants to keep business away from a growing list of rivals, which include Sony (SNE), Barnes & Noble (BKS), and, very soon, Apple (AAPL), which will be supporting e-books on its new tablet device.

Schmidt added a bit of nuance to that message today, noting that the company had been surprised to see its European business bounce back as quickly as it has. Here’s my transcript of his opening statement.

We are clearly seeing aspects of recovery, and what is notable is that we’re seeing aspects of recovery not just in the United States but in Europe. I had been in error in assuming that there would be a lag, that it would the U.S. first and Europe second. Asia, of course, was never significantly hit in the first place.

So that means from a Google perspective that…we never stopped hiring, but we told our team internally and again, we’ve said to many other people that we are increasing our hiring rate and our investment rate in anticipation of a recovery.

Schmidt and Google co-founder Sergey Brin covered a lot of ground in the hour-plus press conference, and I’ll try to go back and break out out some of the other highlights. A few items worth noting in summary:

• Brin expressed contrition over recent Gmail outages and said the company was working both to prevent future failures and to react more quickly if and when they do happen. But he reiterated the argument, common among cloud-computing fans, that conventional email systems fail much more frequently.
• Schmidt repeatedly defended the proposed settlement Google had reached with authors and publishers regarding its book archive. Recurring theme: It’s not a perfect settlement, but it’s workable.
• Schmidt stressed the importance of porting Google’s Chrome browser to Apple’s Mac platform and said this would happen within months.
• Schmidt said Google was working on ways to help publishers sell their work on the Web (via one-offs or subscription). But he said he had no interest in promoting one publisher’s results over another, as Associated Press officials had recently suggested: “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.”
• Schmidt, who’d previously noted that he expected Google to start making an acquisition per month, said that these would likely be small, five-to-ten-person companies. He added that it was unlikely the company would be in the market for something the size of a YouTube acquisition, which cost Google $1.65 billion. Translation: Don’t expect us to pony up billions for Twitter.

Earlier: My live coverage of the press conference:

Google (GOOG) co-founder Sergey Brin is sitting down with about a dozen reporters in Google’s New York City headquarters for a Q&A session. Tune in for live coverage. This should be a wide-ranging conversation, which I’ll attempt to cover live as well as I can. Please consider everything below to be a paraphrase unless it’s in quotes.

Brin is joined by Google CEO Eric Schmidt. Brin gives an unofficial intro.

Schmidt adds his own informal introduction.

Schmidt: We’re here because we have a global sales meeting in New York, and we’re winding that up right now. A series of internal talks, and the mood was “very, very positive.” We told them that “the worst is behind us” (which Schmidt has said before). We’re seeing recovery not just in the U.S., but in Europe as well. I had been in error in thinking it would be U.S. first, then Europe second. Asia is less important, obviously. We’re increasing our hiring rate and investment rate in an anticipation of a recovery.

Brin discusses some tweaks to search. Do you feel that Microsoft’s innovations with Bing will cause you to accelerate your innovations?

Brin: Competition is healthy. Microsoft (MSFT) has made its contributions. So has Cuill. Many of the tweaks in Bing we’d already seen from Microsoft Live earlier in the year.

Schmidt: I agree!

But do you think Bing is really different? Or just a rebranding.

Brin: [Demurs]

Schmidt: You guys should judge us and our competitors. We’ve been criticized for having a self-referential view of the world. But I’d argue that our success so far proves that’s been a good strategy.

Please talk about Android and other mobile plans.

Brin: We started with Android because it was a problem for us, as an end-user and a developer, that phones lacked powerful browsers and the ability to install powerful apps. I think Android has addressed this very well, but it has also pushed the market. It has pushed Apple (AAPL) with the iPhone and RIM (RIMM) and Windows Mobile. I’m pretty excited about the future; they’re getting increasingly capable browsers, and you can now write native applications across five platforms that will cover most smart phones. I think that having the software platform has freed the hardware makers from spending time on that, and they can rejuvenate their efforts on hardware.

Please talk about enterprise efforts.

Brin: We started in enterprise, like mobile, to address our own needs. When we started with mail in ’04, Web email was like a toy. We really focused on something that would work in an enterprise and then made it available to consumers. We feel we’re farther ahead (than competitors) both in email and in collaborative document-editing. We’re moving toward eventually having everything (all our applications) available everywhere. “I just think the cloud model is a better model….I do think this install-less model of a cloud is better….It’s definitely made me more productive.”

More on enterprise from Brin: We’ve been successful with both SMB [small and medium business] and increasingly with enterprise. We’ve got a big implementation with Genetech (DNA), and in Washington D.C. We’re specifically adding features for enterprise. That’s part of the Postini acquisition–to add some of those email features for enterprises. You’d be surprised to hear some of the things businesses ask for.

Please talk about recent Gmail outages.

Brin: Certainly we’re not happy with any outages. With those outages we’re at the “three nines” level, which is not where we want to be. Targeting “four nines” by end of quarter. We’ll let you know how we do. Focusing not only on outages, which we don’t like, but recovery time. Second outage could have been resolved in five or ten minutes, but we made errors in handling it, and it extended over an hour. But if you look at a typical enterprise today, those outages tend to add up to more than even these kinds of outages that we had in Q3. Also, we’re working on the number of people affected by outages. Trying to group people into pods so that if one goes down it doesn’t affect others.

You’re adding more complexity to search. It’s more confusing than it ever was. Same thing with site links. Is that an issue (it is for Danny Sullivan)?

Brin: I’d like to see all the options, available in all the corpuses. We don’t have all the same options in each offering. In terms of the links and snippets that we’re offering, we’re trying to experiment with that.

On Google book deal: If the judge asked you why he shouldn’t be concerned by the concentration of Google’s power, what would you say?

Schmidt: It’s an error to answer a theoretical question from a journalist. But anyway, we won’t get that kind of question. With respect to book search, we were doing something that we thought was appropriate. We were sued, and after three years of discussion, we’ve come to a settlement. This is perfectly normal. From our perspective, this is a settlement we like, it’s a settlement we think they’ll like, and we’ll hear what the court says, within minutes. Let me reframe your question: There’s nothing particularly exclusive about what we’re doing. The rights registry we’re doing is for the benefit of orphan works. “It’s not a particularly good business for us. We’re going it because we think it’s the right thing to do.” We don’t think the settlement is perfect, but we think it’s good.

What are plans to expand book search?

Schmidt: We’re already huge. There are millions of books that have never been read, and we’re going to deliver readers to those books.

Brin: We want as many works as possible in some form, because that’s of tremendous value.

Schmidt: This doesn’t cover all international books, all books in the world. [Some disagreement about this between Brin and Schmidt]. It will take time to get the registry up and running, so for the near future I think that’s all we can achieve.

Back to the economy, please.

Schmidt: We’ve tried for a while to figure out if Google is an accurate predictor of the economy, and we can’t prove it. If we could, we’d brag about it. Last early in the year we saw a decline in U.K., which surprised us. From our perspective, the low point was somewhere in the spring. Which is why I said worst was behind us in May, June. We noticed a recovery “June-ish.” The conventional wisdom is that U.S. recessions are 18-24 months. Bernanke sees a recovery too, which we agree with. Conventional wisdom was that Europe would lag by three-five months, which we’re not seeing. Europe is not one country, and it varies a great deal depending on which country we’re in. I won’t go in to specifics but it’s the obvious stuff–the countries that didn’t have a big bump did not have a big fall. More on being a leading indicator: Obviously we’re a leading indicator in advertising.

Brin: And we’re good indicator for consumer spending, and you can see for yourself by looking at Google trends.

It seems as if Chrome isn’t having the impact with consumers that you would like.

Brin: [Starts, then stopped by Schmidt]

Schmidt: Some of your premise about Chrome is incorrect, in terms of adoption, and we’re going to get that message out.

Brin: It’s actually exceeding our benchmarks.

Schmidt: I see a lot of Macs in this room, and a lot of very sophisticated people are using Macs now and we need to get a version of Chrome out for that, which we’ll have in a couple of months. Key to browser strength is speed. In general, we announced Chrome OS and Chromium product. Everything is linked together: Cloud, chrome, etc.

At one point do Android and the Chrome OS come together or not come together?

Schmidt: Current definition of use platforms has to do with use patterns. Android for mobile, delivered via telecom store, heavily integrated with telco offerings, like our Verizon (VZ) deal, which we’re enormously excited about. The analog for Chrome is that it’s designed for a 10, 12-inch form factor. They both use Linux, etc. But they’re designed for different uses. [Netbooks?] May be some overlap there.

Is Google being too nice? Is there a rethinking of relationships with aggrieved groups?

Schmidt: In many ways we’ve always wanted to be this Google as opposed to the way we were perceived a few years ago. We’re particularly proud of the way we’re working with advertising agencies, which is very important to us. With the media industry, we’re having success with YouTube and YouTube monetization, and we’ll have more on that coming forward….”We have always wanted to have these partnerships….We’re learning how to do them in a way that they win, too.”

Brin: People can now differentiate between us and the Internet.

Schmidt: Google is an innovator. The Internet is causing collisions. Innovation plus collisions equals opportunity. For instance, the fact that Verizon has embraced most of the open principles that we put forth five years ago is shocking. “It’s pretty amazing. This is Verizon. It’s not some itty-bitty telecom start-up.”

Are you uncomfortable with Google employees’ sense of entitlement? [Per new Ken Auletta book]

Brin: [Refers to layoffs--Schmidt corrects him: "We did not have layoffs."] [Addendum: Schmidt was talking about Google closing engineering offices in Phoenix and other locations; Google did have layoffs last winter.] You’re right:

What do you think about publishers requiring pay walls, and how will you help surface that.

Schmidt: We’re starting with that YouTube. Overall, “there’s clearly a market for free content, and that market is the size of the Internet.” Also a market for subscription/paid. The analogy I would offer is TV. We all grew up with “free” TV. Now almost everyone pays for cable, and some people pay for pay-per-view, “which is ridiculously expensive,” but people will pay for particular events, like boxing. I think all three of those uses will emerge. We’re working on payment models, subscriptions, to enable that.

But what about surfacing paid content in search [this comes from WSJ.com editor Alan Murray]? Will you factor the desire of someone to pay for content into results?

Schmidt: We’re not going to use the price you use as our ranking in results. That’s not going to be our signal. But we’ll incorporate the price people are paying for your content into results. But I’m not going to answer this precisely because I don’t want to discuss how we produce results. The most interesting improvement you could make is that to the degree that we have more of the marketplace data available, we could take that information and reflect some of that in our rankings.

The AP CEO said Google or Microsoft might be willing to pay a premium for an advance look at the news.

Schmidt: We have a deal with the AP, and I don’t want to talk about any specifics of any deal. I don’t think that’s proper. “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.” We are staying out of the media business. “You guys are very good at it, and we’re not.”

[Apologies for tech error; I missed the specific question and part of the following exchange, but the subject is entitlement.]

Brin: We cut down on snacks, etc. to “reset expectations” regarding entitlement.

Schmidt: “Google pays very well. Google is clearly a growth company. People at Google don’t work for those reasons at Google. We don’t want them to come to work for Google for those reasons. We want people to come to Google to change the world. Life is short.” The tightening in the last year has been good for this, by the way, the controls put into place by Patrick Pichette, who is our hero, have been very helpful.

Please talk about M&A plans and goal of one acquisition per month.

Schmidt: That’s been our historic pattern. I think we will be buying small companies–five, ten people. That’s where some of our best stuff has been. One day Larry and Sergey bought Android, and I didn’t even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. “And I said, ‘for how much, Sergey?’ And it turned out to be a few million.”

Would you buy a YouTube?

Schmidt: Is there another one to buy? The problem with that size of acquisition is that you have to make your money back. I think that DoubleClick and YouTube will be two of our best acquisitions. DoubleClick is already close to paying back, and YouTube will get there soon. But bear in mind that any major acquisition now will involve a regulatory review, because of our size and because our competitors will make sure of that.

[Sorry, missed another question]

Do you anticipate making large upfront commitments for new or renewed search deals [as you did with MySpace and AOL]?

Schmidt: I’d rather not comment on search deals. We are in discussions with both of those companies. “Some of our best friends are in those companies.”

[Missed yet another one]

What will new tablet machines [like Apple's] mean for you? And to content producers?

Brin: Hardware is getting amazing with regard to cost. Used to be that display was expensive. Now that’s cheap, and so are chips, etc. Now, the main cost is broadband connection, or cellular, or however you get to the Internet. That’s why wide broadband availability is important to us. Think about how much you spend on access costs compared to the amount you spend on your handset. The phone cost is negligible.

Schmidt: Not sure how to answer question. We provide the infrastructure below what you’re talking about [touch interfaces, etc.]. Kindle is a good example. Don’t think about current one, think about one two or three years out. I think there will be many kinds of things like Kindles, and that’s a material change in the way people will interact with hardware, media.

Brin: I think it’s better if hardware isn’t locked down to specific platforms.

[Long exchange between Schmidt and Danny Sullivan that I'll have to pick up later]

Should Google be required to lease servers and access to Google checkout numbers to deal with “lock-in” issues that broke up the telcos?

Schmidt: Google Checkout isn’t interesting. But I think your analogy is wrong and that there are no data to support your theses.

[I missed the next question on the book settlement about orphan works, etc.]

Schmidt: A lot of these complaints are being made by people who don’t want a solution.

What are the reasonable book settlement proposals you’ve seen?

Schmidt: Goal is to get all the books to everyone and to get all the authors compensated properly. Some of the proposals make sense to me, but I don’t want to characterize them. Not a perfect solution, but the best one we can do.

How will book settlement affect international users?

Brin: It won’t. We’d love settlements that work across a range of countries.

Why won’t you be like Microsoft with regard to antitrust?

Schmidt: Many reasons. Culture, for one. Another reason is that majority of users are one click away from moving away from us. Third: If we went into an “evil room” and had an “evil light” shined on us, and we then behaved in an “evil way” we would be destroyed….There is a fundamental trust between Google and its users.”

Schmidt walks through “ludicrous” thought experiment whereby Chrome takes 80 percent of market share and then tries to lock consumers in, noting that it wouldn’t work due to open source.

Do you think you’ll take another stab at moving into radio, print?

Brin: We are quite optimistic on the TV front. Radio and print didn’t pan out as well as we thought initially. One of the reasons is that those mediums are moving online and consumers are moving online and the publishers/producers want to work with us there. “We were kind of at the dock where the ship had already left.” But TV is quite similar to the Web in terms, potentially, of measurability, so we’re excited about those prospects.

Is page rank broken? People are gaming it, etc.

Brin: No. We have to continually develop. Part of the issue is span, but the main issue is that everything changes. We’re doing a much better job of ranking than we did a decade ago. If we just rested on our laurels with what we wrote in paper from 1998, we’d be in big trouble.

The judge presiding over the case, who’d been urged by the U.S. Department of Justice to reject an earlier version of the settlement, set that date during a morning hearing so brief that when MediaMemo’s Peter Kafka asked Google CEO Eric Schmidt about it at a company roundtable this morning, Schmidt was unaware a date had been set. When Peter broke the news to him, Schmidt didn’t have much of a comment, but he did speak briefly about the settlement and Google’s view of it earlier in the morning.

From Peter’s paraphrased notes on the session:

With respect to book search, we were doing something that we thought was appropriate. We were sued, and after three years of discussion we’ve come to a settlement. This is perfectly normal. From our perspective, this is a settlement we like, it’s a settlement we think they’ll like, and we’ll hear what the court says, within minutes. Let me reframe your question: There’s nothing particularly exclusive about what we’re doing. The rights registry we’re doing is for the benefit of orphan works. “It’s not a particularly good business for us. We’re doing it because we think it’s the right thing to do.” We don’t think the settlement is perfect, but we think it’s good.

Though it’s not yet clear what form the revised settlement might take or what adjusted terms are being discussed, Google and the authors and publishers it has allied with it have quite a few critics to appease, including academics, librarians, privacy advocates, would-be rivals and the French and German governments.

“The settlement would alter the landscape of copyright law, for millions and millions of rights holders of out-of-print books,” Peters said. “It would flip copyright on its head by allowing Google to engage in extensive new uses without the consent of the copyright owner–in my view, making a mockery of Article One of the Constitution, that anticipates that authors shall be granted exclusive rights.”

The settlement, as Peters sees it, will allow Google (GOOG) to profit from the work of others without prior consent. “It could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come,” she said. “In essence, the proposed settlement would give Google a license to infringe first and ask questions later, under the imprimatur of the court.”

One of the more blistering attacks on the deal to date, especially given its source: The nation’s top copyright official. But Google nevertheless dismissed it as unfounded: “We think the settlement is legal, and we think it is structured well within the guidelines of what you can do in a class action settlement,” David Drummond, Google’s chief legal officer, said during the hearing. “It certainly is not usurping Congress’s authority to do whatever it wants.”

A typically arrogant response from Google, though the company does appear to be conceding a bit of ground in the face of widening opposition to the deal. Responding to Peters’s criticism and claims that the deal will essentially grant Google a de facto monopoly over out-of-print books, Drummond said the company plans to make those works available to any book retailer.

“For the out-of-print books being made available through the Google Books settlement, we will let any book retailer sell access to those books,” Drummond told the committee. “Google will host the digital books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any internet-connected device they choose.”

Sadly for Google, that conciliatory gesture did not go over well with critics of the deal. “The Internet has never been about intermediation,” Paul Misener, Amazon’s vice president of public policy, said of the company’s offer. “We are happy to work with rights holders without anyone else’s help.”

The Internet Archive’s Peter Brantley was even more disdainful. “I fail to see what’s really new here,” he told the Los Angeles Times. “It’s like Macy’s telling Sears, ‘You can sell Macy’s clothing.’ There’s no fundamental change of the conditions under which Macy’s acquires those clothes. Google remains in control.”

In a conference call with reporters, a broad group of professors and civil rights leaders said that the important social benefits of the settlement–which would allow Google to make millions of out-of-print books accessible online–are getting lost in the discussion of the settlement, which has drawn a fierce group of critics hoping to block a federal court from approving it.

Google helped arrange the event, which the participants said they called to bring more attention to the settlement’s benefits.

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The Open Book Alliance formally launched the manifesto this past week with which it’s challenging Google’s settlement with authors and publishers. The organization now has a Web site and quite an array of allies–which include, of course, Microsoft (MSFT), Yahoo (YHOO) and Amazon (AMZN). And as if Google doesn’t have enough on its plate, turns out that all along, Microsoft has been holding regular “Screw Google” meetings, the bastards. Uh, I thought that’s what people pay good money to learn in Business School. On a happier note, Howard Stern fans everywhere were happy to learn that Sirius XM (SIRI) has debuted a device that can turn an iPhone or iPod touch into a full-fledged satellite radio.

Over in Personal Technology, Walt reviewed Snow Leopard and found it to be an improvement on its predecessor, but with a lot of the upgrades under the hood invisible to most users. Not the typical object of desire we’re trained to expect out of Apple. In Mossberg’s Mailbox, Walt answers reader email about choosing a vendor to buy a computer online and setting parental controls in Firefox. In The Mossberg Solution, Katie Boehret explores the trials and tribulations of BlackBerry and iPhone users switching one for the other.

More next week.

The Open Book Alliance formally launched the manifesto this past week with which it’s challenging Google’s settlement with authors and publishers. The organization now has a Web site and quite an array of allies–which include, of course, Microsoft (MSFT), Yahoo (YHOO) and Amazon (AMZN). And as if Google doesn’t have enough on its plate, turns out that all along, Microsoft has been holding regular “Screw Google” meetings, the bastards. Uh, I thought that’s what people pay good money to learn in Business School. On a happier note, Howard Stern fans everywhere were happy to learn that Sirius XM (SIRI) has debuted a device that can turn an iPhone or iPod touch into a full-fledged satellite radio.

Over in Personal Technology, Walt reviewed Snow Leopard and found it to be an improvement on its predecessor, but with a lot of the upgrades under the hood invisible to most users. Not the typical object of desire we’re trained to expect out of Apple. In Mossberg’s Mailbox, Walt answers reader email about choosing a vendor to buy a computer online and setting parental controls in Firefox. In The Mossberg Solution, Katie Boehret explores the trials and tribulations of BlackBerry and iPhone users switching one for the other.

More next week.

“The mass digitization of books promises to bring tremendous value to consumers, libraries, scholars, and students,” the Alliance says in its mission statement. “The Open Book Alliance will work to advance and protect this promise. And, by protecting it, we will assert that any mass book digitization and publishing effort be open and competitive. The process of achieving this promise must be undertaken in the open, grounded in sound public policy and mindful of the need to promote long-term benefits for consumers rather than isolated commercial interests. The Open Book Alliance will counter Google, the Association of American Publishers and the Authors’ Guild’s scheme to monopolize the access, distribution and pricing of the largest digital database of books in the world. To this end, we will promote fair and flexible solutions aimed at achieving a more robust and open system.”

Rallying behind that cry is an array of nonprofit author groups, library institutions, and Google (GOOG) rivals that includes the American Society of Journalists and Authors, the New York Library Association, Microsoft (MSFT), Yahoo (YHOO) and Amazon (AMZN), which only confirmed its membership in the Alliance today. All of these participants fear that the Google Book Search Settlement, which will restore access to millions of out-of-print books, could one day give the company a monopoly on the largest digital library in the world.

With a Sept. 4 deadline for submissions to the court reviewing the settlement approaching, we’re likely to hear increasingly more cries that the settlement is bad for consumers, libraries, schools, authors and publishers.