Google’s deal with the French press: €60m for digital transition and advertising partnerships

by WAN-IFRA Staff | February 4, 2013

Google and the French government have come to an agreement that will see Google creating a €60m Digital Publishing Innovation Fund to support “transformative digital publishing initiatives” and to deepen partnerships between Google and French publishers to help increase the latter’s online revenue using Google’s advertising technology.

The two parties have been involved in negotiations for three months after the French press demanded that Google pay for linking to news content so abundantly via its search engine. Google refused, arguing that it sends a vast amount of traffic to news sites via the links in question. French president François Hollande had set a deadline of 31 January to resolve the issue, promising to introduce a legislation to tax Google if negotiations were not successful.

Having signed the agreement on Friday night, after a surprise appearance from Google Executive Chairman Eric Schmidt, Hollande described the deal as having worldwide significance, and said that France was proud of having struck this ground-breaking agreement. As quoted in Le Monde, he said it was unclear whether or not the French deal would serve as a reference model for elsewhere, but “there is undoubtedly an alliance to be made between the producers of content and the diffusers.”

“It’s a win-win agreement,” the mediator in the case Marc Schwartz told Le Nouvel Observateur. Google is not paying for links, which it has always been virulently opposed to. But with a different kind of financial contribution – although significantly less than publishers originally demanded – there are clear benefits for the French press, and for Google a healthy transition to digital can only be a good thing. And there is no risk of Google removing publishers’ results from its search engines, which would undoubtedly damage traffic. As Schmidt said, “A healthy news industry is important for Google and our partners, and it is essential to a free society.”

As specified by Frédéric Filloux in his Monday Note column, the €60m fund for digital publishing innovation will be provided by Google over a three-year period and will be dedicated to new media initiatives. According to Le Monde/AFP, the funds will be dedicated to financing projects of “structural change,” and Google will assist this change with the help of its engineers and technical know-how.

There are about 150 websites that are members of the IPG association (association of ‘l’information politique et générale’ or general and political news) who are eligible for submission – both newspaper websites and pure players, Filloux and Le Monde reported.

“The fund will be managed by a board of directors that will include representatives from the Press, from Google as well as independent experts. Specific rules are designed to prevent conflicts of interest. The fund will most likely be chaired by Marc Schwartz, the mediator, also partner at the global audit firm Mazars,” Filloux says.

The second part of the agreement indicates that Google will offer publishers its platforms such as AdSense, AdMob and AdExchange.

According to Eric Schmidt, “These agreements show that through business and technology partnerships we can help stimulate digital innovation for the benefit of consumers, our partners and the wider web.” Schwartz told Le Nouvel Observateur that Schmidt said he wasn’t ruling out similar agreements elsewhere.

France is far from being the only country where Google is facing opposition from publishers. The search engine giant settled a six-year copyright dispute over article snippets in Google News with Belgian publishers in December, in a deal that sees Google covering publishers’ legal fees and buying ads in newspapers, and the papers buying Google ads to promote themselves. The agreement also includes collaboration on advertising solutions such as AdSense and AdExchange, implementing Google+ tools on news sites and working together to increase publishers’ presence on mobile devices.

As an article in paidContent noted, the deal was presented in the American press as a win for Google, while European news outlets saw it as a success for the Belgian papers. The legal fees would come to around €5m, paidContent said, and, together with the promise to buy ads, this was a way for Google to pay the publishers enough to keep them happy, without directly paying any copyright fees.

Germany’s Bundestag is set to hold a public hearing in early February over the proposed legislation that news aggregators, not just Google, will have to pay for the content that they use. And Brazilian newspapers have been boycotting Google News, hoping that this will turn audiences directly to their homepages.

Does the French deal signal a turnaround for the long-strained publisher-Google relationship? According to Filloux, “the biggest challenge will be overcoming an extraordinarily high level of distrust on both sides.” If this is overcome, will Google make similar deals in other countries around the world – whether willing or coerced?

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