Google to pay publishers under new licensing deal

Google has bowed to global pressure from regulators and lawmakers and agreed to pay some publishers for news content in a major strategic shift by the search advertising giant.

The $US978 billion ($1.4 trillion) company, which has long resisted paying publishers for news, announced a new licensing program in a blog post late on Thursday afternoon and revealed it had signed partnerships with publishers in Germany, Brazil and Australia.

The Google logo at the company's headquarters in Mountain View, California.Credit: AP

"Today, we are announcing a licensing program to pay publishers for high-quality content for a new news experience launching later this year," Google News' vice president of product management Brad Bender said.

"Where available, Google will also offer to pay for free access for users to read paywalled articles on a publisher’s site. This will let paywalled publishers grow their audiences and open an opportunity for people to read content they might not ordinarily see."

Industry sources said the search giant was in advanced talks with Antony Catalano's Australian Community Media, which owns more than 100 regional titles, while Schwartz Media, publisher of The Saturday Paper, Private Media, publisher of Crikey and Solstice Media's InDaily and InQueensland have already signed deals with the company.

Specific details of how the program will work have not been disclosed, but the decision to license content is a strong pivot away from Google's public stance on the value news brings to its search engine. Google closed its news service in Spain in 2014 after legislation was introduced requiring it to pay publishers. When France attempted to make Google pay for publishers content last year, the tech giant said it would change the way articles appear in search results.

The change in stance from Google comes as Australia's competition regulator prepares to announce a compulsory code that will force the tech giants to pay local publishers for the use of news content.

Google Australia's boss Melanie Silva has been vocal about the tech giant's refusal to pay for content and has argued that news adds little value to the platform ever since the Morrison government announced the code would be mandatory in April.

"The direct economic value Google gets from news content in Search is very small. Google last year generated approximately $10 million in revenue—not profit—from clicks on ads against possible news-related queries in Australia," Ms Silva said last month. "The indirect economic value Google gets from news in Google Search is also very small."

Facebook has similarly downplayed the value news adds to its website.

Google, Facebook and large news publishers including Nine Entertainment Co (publisher of this masthead) and News Corp Australia have sent submissions to the Australian Competition and Consumer Commission outlining the way in which the code should work and money should be distributed.

Most publishers believe a collective pool of money is the most effective way to aggregate funding from the digital platform, but remain divided on how the revenue should be split. But some small and independent news publishers - including Solstice Media and Private Media - are concerned that they will not get their fair share of payments.

News Corp Australia's executive chairman Michael Miller said in a statement: "I welcome the fact that Google has finally recognised it needs to pay for news.

"It's difficult to avoid the conclusion that this is a politicised PR exercise and that Google has struck deals with publishers that reflect its views and stance on social issues. It must be made to negotiate on level terms with all genuine news publishers."

Paul Hamra, managing director of InQueensland and InDaily, said his new deal with Google would give the publisher access to new markets and "additional commercial benefits".

"With local news under stress, finding new channels and new audiences for our premium content, in safe and curated environments, is a high priority,” Mr Hamra said. “This opportunity will give us access to new markets and provide additional commercial benefits.”