As media cos income dips Google earns 47 bn from news in

first_imgWashington: Google made a whopping $4.7 billion from the work of journalists last year via search and Google News, taking a huge cut from the online ad revenue of media houses which lost a crucial source of income, resulting in many of them getting shrunk or closed, a media report said. News is a significant part of Google’s business, according to a study by the News Media Alliance (NMA) which represents more than 2,000 newspapers across the USA. The journalists who create that content deserve a cut of that $4.7 billion, president and chief executive of the NMA David Chavern was quoted as saying by The New York Times. The California-based internet giant made the amount from the work of news publishers in 2018 via search and Google News, it said. That $4.7 billion is nearly as much as the $5.1 billion brought in by the United States news industry as a whole from digital advertising last year, the report said. The NMA cautioned that its estimate for Google’s income was conservative. For one thing, it does not count the value of the personal data the company collects on consumers every time they click on an article like this one. “They make money off this arrangement and there needs to be a better outcome for news publishers,” Chavern said. “The study blatantly illustrates what we all know so clearly and so painfully,” said Terrance C Z Egger, the chief executive of Philadelphia Inquirer PBC, which publishes The Philadelphia Inquirer, The Philadelphia Daily News and philly.com. “The current dynamics in the relationships between the platforms and our industry are devastating,” Egger said. The NMA is making the study public in advance of a House subcommittee hearing on Tuesday on the interrelationship of big tech companies and the media. Some 40 per cent of the clicks on Google’s trending queries are for news. That’s content that Google does not pay for, the report said, although it often presents headlines from news outlets verbatim. Egger said the big tech companies should show some appreciation for the content that news publishers provide. Two giant companies Alphabet, which is Google’s parent, and Facebook are major distributors for news publishers. The two of them ferry more than 80 per cent of external traffic to various sites. That is a far cry from the analog days, when media barons controlled how their publications reached the public and collected all the ad income they generated. But Google and Facebook don’t steer news consumers to news sites out of altruism. Rather, their middleman role allows them to take a huge proportion of online ad revenue. As a result, legacy news outlets have lost a crucial source of income over the last couple of decades, which has led them in most cases to shrink or disappear. The big tech companies “like this business. It’s a good business, where you write for them,” Chavern added. Chavern said he hoped that an outcome of any conversation generated by the study would be the passage of the Journalism Competition and Preservation Act which would give news publishers a four-year antitrust exemption, allowing them to collectively bargain with the owners of online platforms over revenue splitting. “News is an important form of content that sustains civic society. I think everybody from readers to writers to politicians understands that if journalism goes away, that’s a horrible outcome for whether we’re able to sustain the republic,” he said. Google, which did not reply to a request for comment, keeps much of its data about search and revenues in a black box alongside its algorithm, the NYT added. Google also spent $21.7 million on lobbying last year to influence lawmakers, becoming the leading corporate spender among the tech companies facing increasing scrutiny from US regulators over privacy practices and market control, according to a media report. Lobbying spending by tech companies has been on a steady rise in recent years and is way up over the past decade, according to the report in CNBC. The report cited data from the Center for Responsive Politics, which is a non-profit, nonpartisan research group that tracks the effects of money and lobbying on elections and public policy. As the biggest US technology companies face increasing scrutiny from regulators related to privacy practices and market control, they are spending a lot more money to try and influence lawmakers, it said. “No company in America is pouring more money into those efforts than Google,” the report said. Last year, the company spent $21.7 million on lobbying, according to the Center for Responsive Politics. In 2009, Google spent just $4 million on lobbying, a number that increased fivefold by last year, it said. For two straight years, it’s been the top corporate spender, outranking traditional front-runners like Boeing and AT&T. Amazon and Facebook also reached record levels of lobbying expenditures in 2018, it said. For years, with their market caps climbing alongside their consumer influence, the largest US tech companies have prepared for the day when their business practices would be more thoroughly scrutinized, the report said. Reports surfaced last week that the Justice Department is preparing an antitrust probe of Google and has been given jurisdiction over Apple as part of a broader review into the tech industry. The Federal Trade Commission (FTC) has assumed oversight of Amazon and Facebook.last_img

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