Google Pressured to Pay European Content Publishers: Report

Google is investing $80 million in France to help publishers make more money online with their content. Now other European nations want their share.

After Google recently made a deal with French publishers to invest $80 million to help them promote their online content and show them new ways to increase their revenues, Google officials might have believed they had finally put out a firestorm that had been brewing for some time.

Instead, Google is now being pressured by content publishers in other European nations to provide similar compensation and financial aid, according to a report by Reuters.

Following the deal Google made in France, which was announced Feb. 1 by Google Executive Chairman Eric Schmidt in a blog post, the head of the European Publishers Council (EPC) told Reuters that the search giant now has to, in fairness, extend similar deals to publishers in other nations throughout the European Union.

In recent months, European countries, including Germany, Italy and France, have been looking at proposals that would allow struggling newspaper publishers to charge fees to search engines such as Google for linking to their content online.

"Search engines get more than 90 percent of revenues from online advertising and a substantial part of these come directly or indirectly from the free access to professional news or entertainment content produced by the media," said Francisco Pinto Balsemao, the head of the EPC, according to Reuters. "The situation is very bad for media groups (in Europe). This use is carried out without the authorization from copyright holders or without any payment in return. So, all aggregators, like Google, should pay."

Balsemao told Reuters that he was pleased with Google's willingness to negotiate with French publishers and that the deal there "looks like a good step that must now be followed in other (European) countries."

In Schmidt's post on the Official Google Blog, he wrote that his company would invest in two new initiatives in France to help "stimulate innovation and increase revenues for French publishers."

"First, Google has agreed to create a $80 million [60 million euro] Digital Publishing Innovation Fund to help support transformative digital publishing initiatives for French readers," wrote Schmidt. "Second, Google will deepen our partnership with French publishers to help increase their online revenues using our advertising technology."

Neither of those initiatives, however, actually mentions anything about Google paying for the use of any content. Schmidt even referred in his blog post about the benefits that Google believes that content publishers gain when that content is highlighted in searches by users.

"Our search engine generates billions of clicks each month, and our advertising solutions (in which we have invested billions of dollars) help them make money from that traffic," he wrote. "And last year, we launched Google Play, which offers new opportunities for publishers to make money—including through paid subscriptions. A healthy news industry is important for Google and our partners, and it is essential to a free society."

So what's this all mean for other publishers around the world? Could similar deals be sought here in the United States by publishers who want some help from Google for their struggling businesses?

Dana Gardner, principal analyst for Interarbor Solutions, said that the whole scenario is "kind of uncharted" for now.

For years, said Gardner, published content could be quoted in small chunks legally, and ethically if it was used with proper attribution by any person or news organization who quoted it.

"It's become the de facto method for how people and companies aggregate content online," he said. "There hasn't been resistance to that in the past by publishers because over time it's been the Googles of the world that are driving traffic to those sites through those referrals."

For content publishers, it has been mostly beneficial, said Gardner. "The majority of those publishers are getting the most clicks from the people that Google and other aggregators are sending their way, not from people who are seeking out specific sites to look for content."

By allowing Google and other aggregators to use snippets of that content, it drives the bulk of the traffic that the publishers receive, he said.

"The publishing industry needs Google and Google needs publishers of content," said Gardner. "They're in bed together, whether they like it or not. They just have to find a way to share the covers."