By Mika Rekai - Monday, November 12, 2012 - 0 Comments
France threatens to take the Internet search giant to court over getting rich from revenue-starved media sites
For media agencies, producing good content is expensive, and giving it away online has never made much sense as a sustainable business model. As readers have dropped print subscriptions and migrated to the web, newspapers have suffered years of plunging revenue. Many hoped the losses would be temporary as advertisers also moved online, but news sites still aren’t reaping the benefits. According to the Newspaper Association of America, in 2011, for every $25 lost in print revenue, newspapers made only $1 online.
While many news organizations, including the Globe and Mail and the Postmedia chain in Canada, have put in place online paywalls, a more radical solution is unfolding in France that could put an end, once and for all, to the industry’s crisis. French newspapers, with the help of the socialist government of François Hollande, are going after Google.
Many companies spend millions to advertise on the Internet, but instead of doing so on sites that produce content, the money largely goes to search engines (i.e. Google) and web aggregators (widely used sites that provide links to news content). Last month, leading French newspaper publishers called on the government to adopt a law that would require Google to make payments to news sites for displaying links to their content. Google, which earns $3 billion every month in ad revenue, said in a statement that it “could not accept” the move and “would be required to no longer reference French sites” as a consequence of such a law. Forcing Google to pay for linking to news content, a spokesperson says, would threaten Google’s “very existence.” Continue…