Google Inc. is planning to end its "first click free" policy that enables users of its search engine to bypass paywalls on news websites, a move that could help publishers boost subscriptions, News Corp Chief Executive Robert Thomson said Tuesday.
Google for years has encouraged publishers to be part of the program, which allows search users to access a limited amount of content on subscription-based news sites free of charge. Some publishers say the policy has hurt subscription growth and say their sites are penalized in Google's search rankings if they don't participate in the program.
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The Wall Street Journal, which is owned by News Corp, opted out of the program this year and saw its traffic from Google search fall 38% and from Google News fall 89% last month compared with a year earlier because its stories were demoted in search results, a spokesman said.
Now, Google is ready to end the first-click-free program and allow publishers to choose how users access their sites from its search results, Mr. Thomson said Tuesday at a media-business conference hosted by Goldman Sachs Group Inc. People familiar with the situation said Google will still enable subscription-oriented publishers to give search users a free sample of their stories if they choose to, but they won't be penalized if they don't.
"That will fundamentally change the content ecosystem, and not just for us but for many publishers. It will allow the creation of coherent, viable subscription models," Mr. Thomson said. "There's a lot more to negotiate, there's a long way to go, but their willingness to end first click free should be celebrated by all publishers."
Google, a unit of Alphabet Inc., said in a statement, "We are always evaluating our policies but we don't have anything to announce at this stage."
Up to now, subscription-based sites that didn't participate in first click free have been disadvantaged in Google's search results, because its algorithm only scanned the portions of articles outside the paywall. Under its new approach, Google's technology will be scanning the full article, despite any paywalls, according to one of the people familiar with the situation.
It is unknown when Google's policy and technology changes will go into effect.
Google's plans mark an apparent warming in its relationship with publishers, who have sparred with the tech giant at times over everything from its dominance in mobile advertising to what they perceive to be its role, along with Facebook Inc., in facilitating the spread of misinformation on the internet.
"At one stage I called Google a 'tapeworm in the intestines of the internet,'" said Mr. Thomson, who has been a leading critic, at the conference. "But actually things have changed."
Mr. Thomson and Google CEO Sundar Pichai had a breakthrough in their relationship in July at investment firm Allen & Co.'s annual exclusive media conference in Sun Valley, Idaho, a person familiar with the matter said.
Mr. Thomson on Tuesday singled out Mr. Pichai for mending relations between the two firms. "Sundar deserves a lot of credit for taking a different approach," he said.
Subscription revenue is becoming more important for news organizations including the Journal, New York Times Co. and the Financial Times, amid steep declines in print advertising revenue and an uncertain digital advertising landscape that is dominated by Google and Facebook.
Publishing executives have been more closely scrutinizing how their stories surface on Google's search results, since it is a major source of traffic.
Google's move to end the first-click-free program is part of its larger effort to help publishers boost subscriptions. Google has tested changes to first click free with the New York Times and Financial Times.
The company is also testing other tools, such as sharing its data with publishers on which users are likely to buy subscriptions and using its online-payments system for subscriptions.
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(END) Dow Jones Newswires
September 12, 2017 23:11 ET (03:11 GMT)