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Google Pledges $1 Billion in Licensing Payments to News Publishers

Alphabet Inc.’s GOOG 3.56% Google said Thursday it would pay publishers more than $1 billion over the next three years to license news content for a new product called Google News Showcase.

The product will display story panels—teasers for articles in Google’s news section—complete with images and summaries selected by publishers. Users who click on the story panels will be taken directly to news organizations’ websites, where a story can be read in full.

The program is launching in Germany and Brazil. Google is in talks with publishers in other countries, including the U.S., according to people familiar with the matter. Google has already signed deals with nearly 200 publications, including Der Spiegel, Stern, Handelsblatt and Folha de S. Paulo.

Google News Showcase will be integrated into the Google News app and eventually will be available on Google Search. The company plans to include audio briefings and video clips later.

“The value of news to Google is really about building a more-informed world,” said Brad Bender, vice president of product management for news at Google. “This launch and billion-dollar global investment takes our support to a new level.”

Mr. Bender said news outlets will be paid based partly on the number of stories they curate and summarize for Google News. The readership of those stories won’t affect how much publishers are paid, one of the people familiar with the matter said. Mr. Bender declined to say how much publishers will be paid annually.

Several Silicon Valley heavyweights have ventured into the business of rounding up news stories. Last year, Apple Inc. launched Apple News+, which carries stories from several news organizations, including The Wall Street Journal. Apple said that product will be offered as part of a bundle for subscribers called Apple One, which will include television shows and music. Facebook Inc. is paying publishers to include story summaries in its news tab, a feature launched last year.

Google is facing scrutiny from federal and state authorities. The U.S. Justice Department has been moving toward bringing an antitrust suit against Google, while state attorneys general are pursuing their own investigation of the tech company, the Journal has reported.

Some news publishers have complained about Google’s dominance of the online advertising marketplace, including its various tools that help place ads on websites. Google has also been criticized by executives at major news organizations—including Wall Street Journal parent News Corp —for using news content in its products without paying the publishers that provide it.

News Corp Chief Executive Robert Thomson said, “We applaud Google’s recognition of a premium for premium journalism and the understanding that the editorial eco-system has been dysfunctional, verging on dystopian. There are complex negotiations ahead but the principle and the precedent are now established.”

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Answer 1

Google Pledges $1 Billion in Licensing Payments to News Publishers

Google would pay more than $1 billion over the next three years to publishers for licensing news content for its new product called Google News Showcase, which will be integrated into the Google News app and eventually will be available on Google Search. The product will display story panels, teasers for articles and images and summaries selected by publishers. The company plans to include audio briefings and video clips later. Google has already signed deals with nearly 200 publications, including Der Spiegel, Stern, Handelsblatt and Folha de S. Paulo. Users who click on the story panels will be taken directly to news organizations’ websites to read the full story. The program is launching in Germany and Brazil. Google is in talks with publishers in other countries, including the U.S. Several Silicon Valley heavyweights have ventured into the business of rounding up news stories. The news outlets will be paid based partly on the number of stories they curate and summarize for Google News. The readership of those stories won’t affect how much publishers are paid. The new venture is in the wake of certain antitrust suit movement by the U.S. Justice Department and criticisms rose by Medias including Wall Street Journal parent News Corp —for using news content in its products without paying the publishers that provide it. The News Corp Chief Executive Robert Thomson responded that, “the principle and the precedent are now established”. Last year, Apple Inc. launched Apple News+ for Apple One subscribers, which carries stories from several news organizations, including The Wall Street Journal and which will include television shows and music. Facebook Inc. also launched a similar product called news tab last year.