Google Offers Hand to News Publishers

By Jack Nicas Features Dow Jones Newswires

Google is rolling out a package of new policies and services to help news publishers increase subscriptions, a move likely to warm its icy relationship with some of the biggest critics of its power over the internet.

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Google said it will end this week its decade-old "first click free" policy that required news websites to give readers free access to articles from Google's search results. The policy upset publishers that require subscriptions, believing it undercut their efforts to get readers to pay for news.

Google, a unit of Alphabet Inc., said it also plans tools to help increase subscriptions, including enabling users to log in with their Google passwords to simplify the subscription process and sharing user data with news organizations to better target potential subscribers.

With billions of people using its search, YouTube and other web properties, Google has an outsize influence on a wealth of industries and modern society. The Wall Street Journal reported Friday that the company is investigating whether Russian-linked entities used its ads or services to sway opinion ahead of last year's U.S. presidential election, following similar moves by Facebook Inc. and Twitter Inc.

The new publisher rules are good news for the print industry, which has largely struggled to convert its business model to the internet as print advertising sales have plummeted in the digital age. Google and Facebook dominate the internet ad industry, and news organizations are increasingly reliant on those two tech giants for web traffic. Google says it drives 10 billion clicks a month to publishers' sites.

Some newspapers even asked Congress this year to exempt them from antitrust laws so they could negotiate collectively with the tech giants.

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Those challenges have caused years of budget cuts and staff reductions at news organizations, which Google says led it to act.

"We really recognize the transition to digital for publishers hasn't been easy," Google Chief Business Officer Philipp Schindler said in an interview. He said a strong news industry boosts the utility of Google search and helps Google's ad business, which sells ads on news sites. "The economics are pretty clear: If publishers aren't successful, we can't be successful."

News publishers, some of whom called for such changes for years, greeted the moves with cautious optimism. "The felicitous demise of First Click Free (Second Click Fatal) is an important first step in recognizing the value of legitimate journalism," News Corp Chief Executive Robert Thomson said in a statement. "We will monitor this change closely to ensure that consumers can indeed find the work of our journalists online, and will report what we learn, for better or for worse."

News Corp owns The Wall Street Journal, which this year disabled free access to its stories from Google search. As a result, Journal stories were demoted in Google's search rankings, reducing traffic from Google search by 38% and from Google News by 89% in August compared with a year earlier.

Google said articles were demoted because its search engine didn't index stories its users couldn't access free. Google said it is now ending that policy. The company said it will still encourage publishers to offer free samples, but the decision won't affect their search rankings. Google labels articles that require subscriptions in Google News.

Google is exploring other changes to boost subscriptions, including enabling publishers to tap Google user data to more directly target users who are likely to subscribe. Google is also considering changes to its search results and Google News service to surface more articles from publications subscribed to by users.

And Google said it aims to simplify the subscription process by enabling users to use login information and credit-card numbers already entered into their Google profiles. "Ideally we'd like to have a subscription process that is one click," said Richard Gingras, Google's vice president of news.

Mr. Schindler said that while Google would likely take a small cut of transactions, it is trying to help publishers, not build a new business. "This is not some secret disintermediation strategy," he said. The financial arrangement isn't yet clear, "but we're looking at it more from a cover-the-cost perspective."

Kinsey Wilson, the former executive editor of USA Today who now advises New York Times Co., said publishers must be careful about letting Google be the middleman to its readers. "Google can remove some friction," he said, "but publishers have to stay vigilant."

Still, he added that Google's moves mark a detente between news organizations and the internet juggernaut that looms over their industry. "We're quite heartened," he said, speaking generally of news publishers. "I don't think anyone is going to assume that they're suddenly acting purely in our interests, but it is real genuine engagement on a variety of fronts."

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

October 02, 2017 00:15 ET (04:15 GMT)