Written evidence submitted by Google
BACKGROUND: GOOGLE'S
BUSINESS MODEL
1. Google's mission is to organise the world's
information and make it universally accessible and useful. The
internet is the richest source of information the world has ever
seen, and we believe that everyone should be able to access that
information. We provide a number of technology services and tools
to do this—from Google Search to Google Maps to Streetview—that
help hundreds of millions of internet users across the world find
what they're looking for among the billions of internet pages
available.
2. Most of our products are funded through
advertising. When a user types a search term into the Search box,
Google will return a page of useful and relevant results. The
main part of the page is made of "natural" search results
which are not paid for but there are sometimes also a number of
"sponsored links"—text ads that appear adjacent
to the natural search results. These are relevant ads that an
advertiser pays for, but only if a user clicks on the ad. Our
goal is to give an internet searcher the best information possible,
whether that information can be found through a search result
or an ad.
3. Google offers advertisers a revolutionary
service. Instead of targeting customers likely to be interested
in their services, Google enables advertisers to target people
at the moment they are actively searching for the particular product
or service they offer. In addition, advertisers only pay when
a user actually clicks on their "sponsored link". All
of our advertisers are treated equally—we don't let businesses
buy their way to the top of the "sponsored links" and
so small businesses are given the chance to compete with multinational
companies. Companies are therefore given great value for money
from advertising on our services.
4. The revenue that Google generates from
this advertising funds more than 150 different internet technology
applications. The common theme uniting all these innovations is
that they are there to help users access and organise the vast
wealth of information available online.
5. We are not a media company—we do
not author or editorialise the content on the internet. Our users
trust our services—especially our Search service—precisely
because we have no vested interest in promoting one point of view
or one website over another. We are independent signposters whose
value comes purely from delivering a great user experience. Our
expertise in the matter of local and regional media is therefore
not from the perspective of the news gatherer or journalist. But
we do understand a huge amount about how consumers and advertisers
use the internet. As news organisations evolve their own practices
to fulfill the tremendous promise of journalism in the digital
era, Google is committed to helping them find innovative ways
to attract bigger audiences, better engage those audiences and
generate more revenue online.
THE FUTURE
FOR THE
NEWS MEDIA
ON THE
INTERNET
6. Traditional business models for local
and regional media are clearly facing long-term structural challenges.
As a recent OFCOM report pointed out, circulation figures for
local newspapers have gradually and consistently fallen over 30 years.
Market challenges such as the growth in competition for consumer
attention coming from the proliferation of television, radio and
magazines (including local council owned publications) and the
fall in above the line advertising budgets—alongside the
global recession—mean traditional local media businesses
are operating in a more competitive market than ever before. These
pressures have led to some contraction within the industry. The
Local Media Alliance suggests the total number of employees in
the industry fell by around 14% between 2007 and 2009 with
job losses concentrated on management, sales, administration and
production.
7. Given the increased access to local and
regional news and information for users, and the increased advertising
offerings for local businesses, Google supports the need to allow
for a 21st century media merger regime. As we said in our evidence
to the recent OFT review on the local and regional media merger
regime, we believe that local and regional news services should
be allowed to merge and consolidate in order to create scalable
and competitive news offerings, in line with general principles
of UK competition law.
8. The growth of the internet, as the means
by which more and more citizens are choosing to get their information,
poses a different challenge altogether. Most people still choose
to get their local news through traditional, non-internet media—24%
of people use newspapers as their main source of local news whereas
only 4% use the internet.[135]
Instead, the internet is creating a whole new marketplace, where
old business models and old ways of distributing news media just
do not work. News media used to be produced by a few expert journalists
in a single country—in the online world, news is produced
by thousands of citizen and professional journalists from across
the world. News used to be distributed by a handful of powerful
executives who controlled the process through printing papers
or broadcasting TV channels on a daily or weekly basis. In the
online world, the expectation of users is that news should be
updated by the hour or even by the minute and made available to
them wherever they are and on whatever device they're using.
9. We believe that this offers amazing opportunities
and possibilities for the distribution and consumption of news.
It creates enormous, global audiences for serious news journalism.
It enables editors to innovate with formats as they learn to present
information in the most effective ways on the internet and as
mobile technology creates a plethora of ways to absorb information.
And a big new pool of citizen journalists and bloggers are adding
to the wealth of global debate and discussion—which has
to be better for society as a whole.
10. These opportunities are as real for
local news as they are for national. The growth in citizen run
hyperlocal news sites in the UK is one of the most optimistic
and promising part of the news media market. The simplicity with
which people can publish using modern web 2.0 platforms is
bringing news that reflects local interests and priorities to
communities, sometimes for the first time. Across the UK sites
run mainly by unpaid citizens are providing mature, serious, high
quality news and commentary about local areas. This ranges from
tiny villages (http://parwich.org) where the site has over 400 views
a day in a village of 500 inhabitants, to highly professional
offerings in small towns and cities (http://thelichfieldblog.co.uk/)
to campaigns and news in gritty urban areas (www.kingscrossenvironment.com)
to cities with huge democratic challenges such as Stoke-on-Trent
(www.pitsnpots.co.uk) where the site has had over 30,000 comments
in one year and over 1,600 unique visitors a day. Even in
their early days, these sites are reaching a substantial scale
and appear to be playing an important role in local news plurality.
11. This is an emerging market where the
business model is still being established. In USA there are large
numbers of commercial hyperlocal start ups. In the UK the main
growth in hyperlocal sites is in not for profits. The 4IP, Screen
West Midlands and Advantage West Midlands funded "Talk About
Local" project (www.talkaboutlocal.org) aims to create community
owned sites in over 150 places. We believe that hyperlocal
sites can be a great complement to professional journalism—rather
than a substitute—and that professional news organisations
should take courage from their success. These sites illustrate
the continuing—possibly even growing—enthusiasm for
community news and information, giving confidence to local news
organisations that their core offer, of high quality local information,
will remain relevant in the digital era.
12. But we recognise that the internet poses
challenges for media companies—namely, how to create new
business models that don't just cope with the new distribution
mechanisms but flourish with them. There are journalists, editors
and producers in the UK who are investing significant brain power
in doing this. This is not Google's role. But Google does have
a vested interested in ensuring that our users find the highest
quality information possible, and journalism is one important
source. An internet of spam, badly researched blogs and questionable
sources is not useful to either Google or, more importantly, society
at large. So we want to help news media organisations harness
the power of the technology to enable them to invest in producing
high-quality news and sharing it with the maximum number of people
possible.
GOOGLE'S
PARTNERSHIPS WITH
NEWS PUBLISHERS
13. The next few years will be a time of
transition, where media companies search for new business models
fit for purpose in an internet age. We do not believe there is
a "right" answer: there are many different ways that
website editors might increase traffic and monetise their sites.
We believe that a combination of advertising, subscription and
micropayments can deliver new revenue streams for high-quality
content.
14. There are a number of Google tools that
benefit news publishers. This is not an exhaustive list but rather
an attempt to show how working in partnership, enthusiastically
embracing technology rather than rejecting it, can create exciting
new models. Now is a time for innovation, and we anticipate Google
continuing to experiment in partnership with news organisations.
15. We're optimistic for the future of journalism.
Quality content is as popular as ever. If we can help readers
find stories, then help publishers better monetise their content,
then our publishing partners are happy, our users are happy, and
the internet is the better for it.
HELPING INTERNET
USERS FIND
NEWS PUBLISHERS
ONLINE
16. Internet users can find thousands of
pieces of information online, Google helps them find news publishers
websites through Google Search and Google News. Unlike traditional
distribution models for news—where news publishers pay newsagents
per copy sold in their shops—this is free. In total, Google
Search and Google News send news publishers globally over 100,000 clicks
a minute. Each of those visits is a business opportunity for the
publishers to show ads, win loyal readers and sell subscriptions.
17. Google News was launched in 2002, after
a Google engineer tried to access news coverage of September 11th
and realised how hard it was to find and compare articles about
the same story from the thousands of different news sources across
the world. Google News seeks to get internet users to the news
they are looking for—quickly and accurately. It achieves
this by collecting relevant news information, creating an index
with that information, and serving it to Internet users via a
simple web search page. As with Google Web Search, our goal with
Google News is to give internet users the most relevant, objective
results. We believe this service is really helpful to users in
organising the world's information—it sends internet users
to over 25,000 news sources in 30 languages and 60 countries
worldwide, from the BBC to the New Zealand Herald to the Malaysian
Star. To see what Google News looks like, go to Annex A.[136]
18. British local and regional news sources
are amongst the news sources that Google News signposts, providing
global promotion for local sites. It links to newspaper sites,
blogs and news clips so users are able to see a wide range of
news coverage from across the internet, whether it be written
or broadcast news from websites such as the BBC. As well as bringing
range, Google News brings a capacity to sort the media. Internet
users are offered a simple yet powerful search tool on the Google
News site where they can search for any topic or town they are
interested in reading about. For example, a recent query specifying
"South Shields" on Google News returned stories from
five different news sources including two local newspapers and
three national news or specialist services.
19. We do not host articles from news publishers
on the Google News site. Some people giving evidence to this Committee
have suggested that "it is copyrighted content that is being
taken". This is simply not true. We show just enough of an
article for users to identify the stories they're interested in—a
headline, short snippet and a link to the publisher's site—and
we direct users straight to those newspapers' sites to read the
stories. Our approach follows international copyright law and
is well-established on the internet as beneficial for both users
and publishers. Our goal is to get users the key information they
are looking for and send them on their way as quickly as possible.
If at any point a web publisher decides they no longer want to
be included in Google News, they're able to do so quickly and
effectively by simply asking us to remove them as a source.
HELPING PUBLISHERS
MAKE MONEY
ONLINE
20. Many years ago (before Google was well
established) newspapers decided that free web editions, supported
by advertising, was the best way to monetise their internet sites.
Google has since developed a free service called AdSense through
which we offer websites the opportunity to host Google-enabled
adverts on their own sites. Once a website owner signs up for
AdSense, they have complete control over where they want the adverts
to appear on their site and what kinds of adverts they will (or
will not) accept. Google and the website owners then share the
revenue generated, with the majority of the revenue going to the
website owners.
21. The Google News service has also worked
with publishers—such as the FT and Wall Street Journal—to
identify ways for those that charge for access to provide a free
sample for potential subscribers. To implement "First Click
Free," publishers agree to allow users who find a web page
through Google Search or Google News to see the full article without
requiring them to register or subscribe. The user's first click
to the publishers' site is free. When users click on additional
links on publishers' sites, the publishers then can show a payment
or registration request. It's a simple system that lets readers
test-drive a news source before deciding whether to pay, and it
helps publishers promote their content to new users. More detailed
description of ways to show paid content can be found here: http://www.google.com/support/news_pub/bin/answer.py?hl=en&answer=40543
HELPING PUBLISHERS'
WEBSITES WORK
BETTER
22. In order to generate returns to advertisers
or benefits to users who take up subscriptions, website publishers
need to engage users and keep them on their site. Improving the
useability of sites is part of the solution.
23. One problem with reading news online
today is that browsing can be really slow. A media-rich page loads
dozens of files and can take as much as 10 seconds to load
over broadband. Google Fast Flip (currently available in Google
Labs with U.S. publications) is a new reading experience that
combines the best elements of print and online articles. Like
a print magazine, Fast Flip lets you browse sequentially through
bundles of recent news, headlines and popular topics, as well
as feeds from individual top publishers. At the same time, we
provide aggregation and search functionality across many top newspapers
and magazines, and the ability to share content with friends and
community. Fast Flip also personalizes the experience, by taking
cues from selections you make to show you more content from sources,
topics and journalists that you seem to like. In short, you get
fast browsing, natural magazine-style navigation, recommendations
from friends and other members of the community and a selection
of content that is serendipitous and personalized.
24. To build Google Fast Flip, we partnered
with over three dozen publishers, including the New York Times,
the Washington Post and Newsweek, and we're planning to add content
from other partners soon. These partners will share the revenue
earned from contextually relevant ads. This gives publishers an
opportunity to introduce new readers to their content. It also
tests our theory that being able to read articles faster means
people will read more of them, driving more ad revenue to publishers.
25. Another way to keep users on websites
is through integrating media—video, audio and text. While
now we display text, video and audio next to each other there
might be a future where the stories are told in a new medium that
emerges out of a deep convergence of these three. Indeed, the
development of integrated formats might change journalism fundamentally
in terms of how to set out the line of a story, what to begin
with and where to end, or how to provide additional information.
We offer many free services that publishers can use to engage
their readers, such as Google Maps, Google Earth and YouTube videos.
YouTube recently introduced a program called YouTube Direct that
allows publishers to tap into the wealth of user-created video
and include it on their news sites. More information about this
innovation can be found at: http://youtube-global.blogspot.com/2009/11/connecting-citizens-and-journalists.html.
CONCLUSION
26. In short, Google believes that internet
technology offers web publishers a myriad of different ways to
distribute, promote and display high-quality news. Working with
the technology, rather than shying away from it, is the best way
to reap the benefits of this new technology. Google believes that
some of the innovations we have been working on are amongst the
first, but by no means the only, models for the future. We are
committed to helping news providers harness the opportunities
that new technology offers.
November 2009
135 17-11-09 OFCOM Report to the Secretary of
State on the Media Ownership Rules Back
136
Ev not printed. Back
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