[jim-greer]

> If that's the case, then wouldn't Google's work be considered derivative of the original content?

The ruling pretty much addressed this already:

"Plaintiffs’ contention that Google has usurped their opportunity to access paid and unpaid licensing markets for substantially the same functions that Google provides fails, in part because the licensing markets in fact involve very different functions than those that Google provides, and in part because an author’s derivative rights do not include an exclusive right to supply information (of the sort provided by Google) about her works."

If that's the opinion concerning providing search in the books, I think it's highly likely that the same logic would apply to improving search and even ads.