Google wants to have a “fact-based” discussion with the government and regulators regarding the profitability of online news in Australia, saying the value of news is not about economics.
“The value of information to Google is not about the economy, but about its role in educating and informing Australians, and its importance in strengthening democracy,” he said.
In a blog post, which comes in direct response to the Australian government which announced earlier this year that it would develop a code of practice to force tech giants such as Facebook and Google to pay for Australian content if it is a source of profit, the search giant reiterated that it barely makes any money from news content – just A$10 million in revenue last year.
“We don’t advertise on Google News or the news results tab of Google search. And in terms of our overall business, Google generated around A$10 million in revenue last year. – with no profit – from ad clicks over any news related queries in Australia,” he wrote. “Most of our revenue is not from news queries, but from commercial queries. , like when someone searches for “running shoes” and then clicks on an ad.”
Read: Google says it doesn’t make money from Australian news, somehow
The indirect economic value it derives from news in Google Search is also “very small” for Google. He said of all the things people come to Google for, news is a very small part, and last year news related queries accounted for just over 1% of total queries on Google Search in Australia .
“The ‘indirect value’ argument also overstates the relevance of a small fraction of hard-to-monetize queries and ignores the fact that ‘indirect value’ cuts both ways – Google Search drives a lot of traffic to news publishers from users who weren’t, “I wasn’t originally looking for news content at all,” he said. “For example, a search for ‘Melbourne’ would return results such as tourist links, maps, local government information, news headlines, etc.”
Google sees an existing “two-way value exchange” as substantial, pointing to a previous remark it made that Google drives traffic to news sites more than 24 billion times a month worldwide.
“To put it plainly, a lot of people (Australians and beyond) click from Google on Australian news websites, giving publishers the opportunity to make money by showing them ads or turning them in paid subscribers,” Google said.
He said that in 2018, Google search accounted for 3.44 billion free visits from large and small Australian news publishers. He used research from Deloitte in Europe to translate this into around A$218 million worth returning to Australian publishers every year from Google traffic alone.
“In summary, news media companies are likely to derive far more benefit from cross-media content than they generate,” the search giant added.
“We are always looking for new ways to support journalism, not because we make money from it, but because we believe everyone benefits from its contributions to society and its essential role in the fight against disinformation.
Google said while it recognizes the importance of news and is committed to finding new ways to support publishers, it said a mandatory code would have significant consequences for Australians, such as affecting the types of news consumed and how they are searched and discovered through Google.
“As we work with the ACCC and government, as well as media companies to develop new solutions to generate additional revenue, it is important to base decisions on facts, not inaccurate numbers and baseless claims,” he wrote.
For 2019, Google Australia reported an after-tax profit of A$34 million on revenue of A$1.24 billion. Compared to the previous year, advertising revenue increased by A$158 million to A$719 million.
The Australian Competition and Consumer Commission (ACCC) released a concept paper on the impending mandatory code last month, seeking comments on how best to address the imbalance in the bargaining position between the news media and specific digital platforms, asking 59 consultation questions.
“As we move forward, it’s important that we have a fact-based discussion,” Google added.
The decision is part of the government’s response to the ACCC’s inquiry into digital platforms, which in July made a total of 23 recommendations covering competition, consumer protection, privacy and regulatory reform. medias.