There has been quite a number of journalists weighing in on the role Google plays in the newspaper industry. The company has made billions of dollars of advertising revenue at the expense of content creators. The newspaper industry has lost billions of dollars in the last 10 years, which is directly proportionate to the sheer growth Google has garnered . Should Google be doing more for the newspaper industry?
In 2011 Google made 37.9 billion dollars, of which 96% derived from advertising. Each quarter from 2012 to 2013 earned Google 14 billion dollars on average with the same amount coming from their core advertising market. “Our top 25 advertisers are spending over $150 million per year” on Google’s ads business such as search, display and YouTube, said a Google Spokesman . Currently Google accounts for more than 41% of U.S. digital ad revenues, according to eMarketer.
When Google first introduced their Adwords platform in the year 2000, newspapers in the US peaked at $48 billion dollars from direct advertising. This has since declined to 18.9 billion in 2012. It is painfully obvious that most advertisers are getting more bang for their buck by advertising on the internet, instead of physical papers.
In the last few months many of techs leading innovators is trying to help journalism reach new heights and put a priority in the dailies. Amazon CEO Jeff Bezos acquired the Washington Post for $250 million, then eBay founder Pierre Omidyar promised to spend a similar amount on a brand-new media entity called First Look Media. Google so far as done nothing to give back to the industry.
Many European countries are not taking the advertising market share of Google laying down. Google generates an estimated €1.5 billion, or $2 billion, in France. The government is irate that the company pays almost no taxes in France, and instead is going to Belgium and Ireland. “We want to work to ensure that Europe is not a tax haven for a certain number of Internet giants,” the digital economy minister, Fleur Pellerin mentioned.
The fight against Google Advertising has been taken to European courtrooms for several years, with publishers in Belgium, Italy, and France bringing copyright cases against it for displaying and aggregating snippets of content in search results and on services such as its Google News aggregator. Basically, Google was taking newspaper articles and monetizing it and publishers were not being compensated.
Google tried to defuse the France situation before they managed to convince the EU to pass sweeping new laws to tax Google for local news that makes Google News and is ridden with adverts. The government and Google passed a €60m digital innovation fund that will help local news companies start to monetize their newspapers in digital form. The commercial agreement will allow media organisations to profit from Google advertising platforms, including AdSense and AdMob for mobile phones. Google sends some 6bn clicks a month to publishers around the world, representing a big money-making potential by selling advertising next to it and drawing in new readers.
Many industry experts agree that Craigslist led to the decline of the local classified advertising that was the cornerstone of newspapers revenue stream. Google has a pronounced effect on the consistent decline of advertising Simply put, Google has not done enough to aid the newspaper industry. If the company continues their profiteering ways at the expense of original content creators, more papers will fold and less content will be created.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.