Google News business model: It’s being discussed all over the place, so I feel somewhat after-the-fact making an observation on the Wired.com Media Hack column about the “problem” Google has if it ever tries to monetize its 3-years-old, but still in beta, Google News.
As it turns out, however, Google has a problem that is nearly as complex as its algorithms. It can’t make money from Google News. So while other online publishers like Yahoo News and MSNBC earn tens of millions of dollars in revenue each year and continue to grow, Google News remains in beta mode — three years after it launched — long after most of the bugs have been excised. The reason: The minute Google News runs paid advertising of any sort it could face a torrent of cease-and-desist letters from the legal departments of newspapers, which would argue that “fair use” doesn’t cover lifting headlines and lead paragraphs verbatim from their articles. Other publishers might simply block users originating from Google News, effectively snuffing it out.
While I’ve blogged on the topic of how publishers view Google as a threat, the “Google can’t make money from Google News” argument is lost on me. It makes about as much sense as an argument for why Google can’t make money from its front page because there are no ads there also.
The logic that concludes that ads on Google News will lead publishers to sue Google may be legally valid, but I’d bet Google News delivers a significant percentage of the eyeballs those publishers are monetizing (finally) in other ways, or directly from Google’s AdSense program, causing them to be hard-pressed to bite that hand.
Furthermore, every time I use Google (which is often), that brand is jammed into my face which is saving Google untold tens of millions of what I believe are called “equivalency advertising dollars.”
Those six million unique users a day fondling that Google brand and using Google as the doorway-of-choice into all that news “content” seems like a business model to me. Especially when it helps lock down a billion dollars of advertising being purchased on Google from a gazillion small business owners who don’t read Wired.com.
Suggested next assignment for Media Hack: Why the cable industry can’t make money from C-Span and what they should do about it.
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