Yesterday Google announced that they will be placing ads on Google News’ search results in the U.S.  This means if you search for keywords such as the iPhone or the Kindle, you will notice results for sponsored links from websites such as BlackBerry.com, att.com, Amazon.com, and SonyStyle.com.

“We’ve always said that we’d unveil these changes when we could offer a good experience for our users, publishers and advertisers alike, and we’ll continue to look at ways to deliver ads that are relevant for users and good for publishers, too,” stated Josh Cohen on the Google News Blog.

Google was debating whether to put ads on news.google.com for about 6 years.  They were skeptical before because of criticism from newspaper publishers.  Content from Google News is aggregated from various blogs and online newspapers.

Google CEO Eric Schmidt has reiterated that the search engine company is a friend of newspaper publishers.  Google’s own Adwords and AdSense business depends on newspaper publishers and other content publishers.

“When Eric Schmidt says he worries about the newspaper industry, it’s crocodile tears,” stated Brian Tierney CEO of the parent company for The Philadelphia Inquirer and The Philadelphia Daily News.

William Dean Singleton, CEO of MediaNews Group has a difference of opinion with Tierney.  MediaNews is the parent company of about 54 daily newspapers including the San Jose Mercury NEws and The Denver Post.  He says that newspaper companies don’t have to let Google take content, but opt to do so because it drives traffic.

Reuters says that they will be watching Google News closely as they don’t have any licensing agreement with them.  “We are certainly not surprised by the move, which places Google News in a position to compete with news publishers — giving us cause for concern,” stated Alisa Bowen, SVP for Reuters.

[via New York Times]

Yesterday a 10-Q was filed with the SEC.  The 10-Q was regarding MediaNews Group and The Hearst Corporation buying 80% of classifieds web site, Kaango.  The cost of 80% ownership was roughly $20 million. 

MediaNews Group is the fourth largest newspaper company and is headquartered in Denver, CO.  MediaNews represents roughly 58 daily newspapers and 100 non-daily publications.  Acquiring partial ownership of Kaango was a vertical integration strategy for MediaNews.  MediaNews Group signed Kaango last June to provide their newspaper companies a classifieds platform.  This is the same case for The Hearst Corporation who also previously signed Kaango for a classifieds platform deal as well.

“Kaango will be held by a newly formed LLC, which is 50 percent owned by each of the two. The remaining 20 percent of Kaango is owned by its founders and is subject to a call option and is expected to be purchased in the future, the company said,” wrote Rafat Ali [paidContent].

This transaction reminds me of when eBay Inc. bought 25% of classifieds website, Craigslist in 2004 from shareholder that was a former Craigslist employee.  Clearly the classifieds market on the Internet is still hot and is acquisition-ready.