Google’s profit “very small” from News content
Google revealed that their direct profit from the news content is very small in response to the suggestion of paying AUS$600 annually to the news publishers on online platforms. Melanie Silva, Managing Director and Vice President, of Google in Australia, stated in the blog post that Google had earned revenue of AU$10 Million not profit from click ads that could be potential news queries,
“The bulk of our revenue comes not from news queries, but from queries with commercial intent, as when someone searches for “running shoes” and then clicks on an ad,” she said.
Australia is on the verge of creating a Digital Code where news agencies publishing on online platforms should also earn just like Facebook and Google. The news agencies like News Corp, Seven West Media and Nine Entertainment, also deserve the advertising revenue, which should be around 10%.
However, Silva stated that the 10% figure, “is based on an assertion that news accounts for 10 percent of queries and generates about 10 percent of our gross revenues in Australia.” She further clarifies that Google’s direct and indirect profit is very small, whereas Google helps media companies to attract traffic without any cost.
According to Silva, “A study by Deloitte in Europe valued each visit between euro 0.04-0.06 or around AU$0.063 — which equates to approximately AU$218 million in value going to Australian publishers each year from Google traffic alone. In summary, news media businesses are likely to derive far more cross-content benefit than they generate.”
She further added that if the mandatory code is levied, it will have consequences based on which type of news content should and should not be published on the online platforms.