In a move that some say is disastrous for the newspaper industry, Google has started using news content directly from the Associated Press. The move comes a year after the two announced that Google had agreed to license content from the Associated Press. The agreement is similar to the terms commercial customers have with the AP.

Technology pundit John C. Dvorak wrote about the new agreement in his recent PC Magazine article:

The Google News site robotically scans hundreds of news sources and provides a faux front page of popular news items, with hundreds, if not thousands, of redundant links to those stories (as they are carried by local news outlets). Google links to these outlets, and this is where the reader then goes to read the story. If the story is from the Associated Press , then the local outlet pays the AP for the content.

Until now.

The AP, among others, saw this as some sort of vague copyright violation. It demanded that Google pay a license fee and link to the story directly from the Google site. So, Google said okay. Now, the newspapers—who collectively "own" the AP—lose a link and a potential long-term customer.

Dvorak goes on to question the question why the newspaper industry would let this agreement happen:

So can someone explain to me why the newspapers would stand by and let this happen? No wonder they're dying. They're run by idiots. The newspapers obviously encouraged the AP and others to do this, or they would have squawked when the idea came up.

Earlier this year Google settled a lawsuit with the Agence France-Presse news agency after they claimed Google infringed on their copyrights by posting headlines, photographs and news summaries without the agency's permission.

It does seem strange that the newspaper industry would overlook the benefits of being included Google's aggregated news index. Is this latest agreement with the Associated Press another example of the newspaper industry's lack of new media savvy?