In particular I'm sure Google benefits from news indirectly by giving them valuable info about their users (you can tell a lot about somebody by what news they're interested in) and also by adding one more potentially useful service to the Google "suite", giving one more reason for users to commit to their ecosystems. That being said I'm incapable of judging of the actual monetary value of either of these things.
>People do pay for Google Search ads to drive traffic to their site, and for newspapers that probably gives them ad revenue and signups.
>Newspapers get a similar service from Google News for free.
That's a bit of mental gymnastics here. That's like saying "people pay to have google ads, but you can also get listed in the organic results for free! Thanks Google!". If I go to Google news then I expect to see news, them only displaying newspapers that agree to pay for it would make the service objectively worse. That would be like having Google search only listing ads and no organic results.
As rational actors it's in the newspaper's best interest to create content that interests people and it's in Google's best interest to promote that content to make their service valuable. Nobody is giving anybody a freebie here.
But given that we are in 2018, not right after 2001-09-11 as when it was created, even if Google News doesn't add anything positive to Google's bottom line or PR (big, BIG "if") there's a huge cost to shutting it down to Google PR, since it's another example of Google shutting a popular product.
If the EU is doing this, it actually gives Google an excuse, in case they wanted to shut it down anyway. And nobody else would make a replacement because it's just not economical.
Yes. I agree that "being logged in while browsing the Internet" has value to Google.
You may disagree on what that value is. I may be way off, but it's a Fermi estimate. I encourage you to plug in the numbers you would estimate, and see what monetary value Google News has to Google, and see if a link tax with amounts that news sites would actually care about makes economic sense.
> That's a bit of mental gymnastics here.
I agree. It's more a counter-point to "obviously Google should pay" than a suggestion for a better model.
> Nobody is giving anybody a freebie here.
On this we agree. Both supply-side parties add value, and all three parties gain value. To say that one of the parties is a "leech" is not accurate.
If the EU forces Google to pay a meaningful fee to news sites, then that may (in my estimate: extremely likely to) completely erase any benefits, and it'd be rational for Google to bug out.
I'm pretty sure they use News as part of their tracking efforts. Being an extremely tight lipped and secretive company this point would be extremely hard to prove.
But given their history of shutting down unprofitable properties I would be surprised if they just provide this service for altruistic reasons.
Google News was ostensibly started for altruistic reasons, because on 2001-09-11 ALL news websites went down under the load.
In 2018 news websites maybe are more behind cloudflare/akamai and would be able to handle load, so less relevant technically.
But to say that altruistic reason would surprise you because of this history is extremely cynical. Even by my standards.
Google probably does gain from people logging in (though you can use Google News without logging in, it probably does cause people to log in, even if just a little more).
If the newspaper has ads from Google, then Google does take a cut (that's the business logic), and arguably Google News is similar to the newspaper buying ads on Google Search, except they don't have to pay.
People do pay for Google Search ads to drive traffic to their site, and for newspapers that probably gives them ad revenue and signups.
Newspapers get a similar service from Google News for free.
"Should Google (or anyone else) pay newspapers in order to run a news aggregation service" really boils down to "how much $ is a login worth to Google"?
It becomes a formula:
Google News value to google = google_news_users_per_month * fraction_not_logged_in * fraction_who log_in_because_of_google_news * value_of_a_login_to_google
Let's guess some numbers:
1M * 0.7 * 0.2 * $0.01 = $1400 per month
If Google has to pay developers, server infrastructure, AND newspapers more than $1400 then Google loses money on this and SHOULD turn down the product. I say this as a shareholder of GOOG: If it doesn't make financial sense then stop wasting my money.
(but yes, there's also brand value)
PS: Yes, there's one more value to Google, and that's the general: "More Internet use is a benefit to Google because any increase of Internet use will have a fraction on it go to sites that have Google ads on them". But saying that's bad is as if Google were to give free Internet, and people would demand that Google pay to give free Internet to people, because users would browse to sites where many of them would have Google ads on them.