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Google Talks Up Micropayments for Web Content

Often at odds with news publishers, the search giant pitches them a variety of options for generating revenue from their online content.

September 11, 2009
By Michelle Megna: More stories by this author:

Google News, publishers and micropayments
Google is exploring several approaches designed to help news publishers charge for online content, according to a document the company issued to a news print group.

In a document filed with the Newspaper Association of America (NAA), the search giant revealed that it is developing a micropayment service "available to both Google and non-Google properties within the next year."

In addition to micropayments, Google (NASDAQ: GOOG) also said it was looking into affiliate syndication and subscription offerings.

The paper came in response to an NAA task force of newspaper executives, tasked with evaluating how the industry can charge for online content. The group approached several technology companies, including Google, asking them to offer proposals on the topic. InternetNews.com obtained a copy of the report from the Nieman Journalism Lab at Harvard University Web site, which first reported on the issue.

"Google believes that an open Web benefits all users and publishers. However, 'open' need not mean free," Google said in its report. "We believe that content on the Internet can thrive supported by multiple business models -- including content available only via subscription."

The report comes at a time when the ailing newspaper industry is grappling with how to generate money from its online content. Some traditional publishers are considering partnerships with e-reader businesses as they try to mitigate the effect of steep declines in print ad revenue.

Others, however, have accused companies like Google from unfairly profiting from their labor.

In particular, Google and news publishers have often been at odds over how the dynamic between online and offline media should work -- a conflict that often centered around Google News, the company's news aggregator service.

Some publishers have maintained that Google unfairly benefits from their original content indexed at Google News, while the search giant counters that it helps news Web sites by driving traffic to them -- and that any outlet can opt out if it doesn't want to participate.

Another look at micropayments

In addition to subscriptions, Google also suggested micropayments, or the billing of small fees for individual articles, as an extension of its Google Checkout service.

The concept of using micropayments to pay for online content isn't a new one. But with Google throwing its weight behind the idea and with publishers now desperate for solutions, it could encourage both parties to embrace the idea.

Google, for its part, sees micropayments coming into play in the near future.

"While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year," the company said in its report. "The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time."

Under the plan, Google would cover the risk of non-payment by assigning credit limits based on past purchasing behavior and "having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud."

"Merchant integration will be extremely simple," it added.

Subscriptions and syndication

In its report, Google also discussed a subscription option, in which users would pay for a single sign-in to access content across different sites.

Readers would shell out for a monthly fee for a "wide-ranging package of premium content" -- for example, the stories from the top 10 business publications.

Publishers would get paid in proportion to the "usage of content in the package," Google said.

The company also proposed syndicating of content through affiliate networks.

"News publishers can decide to package their content (or a rich preview thereof) with appropriate branding and advertising units and encourage third parties (e.g., other newspapers) to host the syndicated content package, exposing it to a broader audience," Google wrote. "Publishers would derive revenue from advertisements embedded in the syndicated package, as well as traffic from the embedded links back to the publisher."

In terms of how Google would get paid, the company suggested a model similar to the revenue share for its Android Market, the mobile app store for its open source platform.

With Android Market, developers get 70 percent from an application sale while Google takes a 30-percent cut. The company recently said it is working to expand how payments are processed at the app store -- right now Checkout is the sole option.

For now, however, the search giant is not disclosing any more details on the proposals.

"The Newspaper Association of America asked Google to submit some ideas for how its members could use technology to generate more revenue from their digital content, and we shared some of those ideas in this proposal," a Google spokesman told InternetNews.com in an e-mail. "It's consistent with Google's effort to help publishers reach bigger audiences, better engage their readers and make more money."

"We have always said that publishers have full control over their content," the spokesman added. "If they decide to charge for it, we'll work with them to ensure that their content can be easily discovered if they want it to be."

The spokesman also said that Google isn't announcing any new services around its payment service, Checkout, but "we're always looking for ways to make payments online more efficient and user-friendly."

Meanwhile, it appears the NAA itself will not take any further action on the proposals, but rather will disseminate the information and let news organizations make up their own minds on what to pursue.

"As newspapers work to harness the power of their print and online audiences, the Newspaper Association of America continues to seek input from companies and individuals who have interesting ideas on how our industry can grow revenue across multiple platforms" Randy Bennett, NAA senior vice president of business development, told InternetNews.com in an e-mail.

"As part of this effort, NAA regularly makes requests for information to various companies to make our member newspapers aware of new technologies, systems and resources available to them," Bennett said. "We have received some intriguing responses, and individual newspapers will ultimately decide whether to pursue relationships with any of the companies that participated."

TAGS: Google, search, services, open source, e-Mail




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