An explosive new report details how Google earned a whopping $4.7 billion in ad revenue from news organizations online in 2018, while the entire US news industry made a combined $5.1 billion from digital advertising.
The study, by the News Media Alliance, reveals the extent to which the tech giant profits from the work of web journalists and digital news organizations by monetizing Google search and Google News. According to the study, some 40 percent of clicks on Google’s trending queries are news-related, all of which are monetized.
“They make money off this arrangement,” said President and CEO of the News Media Alliance David Chavern who argues that journalists and content creators deserve a cut of that money, “and there needs to be a better outcome for news publishers.”
Google does not pay for the content but generates web traffic clicks, and thus revenue, by sharing headlines and news summaries from various outlets verbatim.
Furthermore, the $4.7 billion figure is a conservative estimate as the analysis didn’t factor in the personal user data collected by Alphabet, Google’s parent company, which can be further monetized.
Details from the report generated a very mixed reception among journalists and media workers who particularly drew attention to the revenues built up by Google while news outlets increasingly lay off staff.
Every penny of that is the result of the labor of low-paid journalists, hanging on by their fingernails. What happens to Google’s profits when all that free high-quality content just goes away? https://t.co/r4hCUVaYKo
— DaveLaFontaine (@DaveLaFontaine) June 9, 2019
What also seemed unjust is that the snippet Google shows “is all anyone cares about,” and readers don’t bother actually clicking into the full story. “Google should license/pay for this,” one commenter suggested.
People do realize though that the relationship between the tech company and news media is more complicated, saying that when Google “makes money on news it’s by serving ads ON publishers’ sites.”
Well you see…
Media orgs ignored Google and facebook right up until Google and Facebook ate their lunch (ad revenue).
Oh, and because of the internet itself, your local paper is competing with news media around the world directly. https://t.co/lJbTbIqSGQ
— James Purser (@purserj) June 10, 2019
According to the newly-launched Save Journalism Project some 2,400 journalists have been laid off in the US so far in 2019 while 32,000 have lost their jobs in the last 10 years. They estimate 63 percent of digital ad revenue is controlled by Google and Facebook, the remainder falling under the auspices of Amazon, Twitter and Microsoft, among others.