Big tech is on a cancel binge. Now, the biggest of big tech, Google, seems to be seriously thinking of cancelling Australia through pulling all or part of its search engine from the country.
It’s looking increasingly likely. The overnight news that Google is experimenting to see how its users behave when links to commercial news are buried deep in search results comes on top of a steady ramping up of the company’s rhetoric about the unworkability of the federal government’s proposed mandatary news bargaining code.
When the government released draft legislation to give affect to the code in December, it looked like the fight between established media and new tech would be sorted through global talks between players like News Corp and The Guardian on the one hand and Google and Facebook on the other.
Now? Maybe. Maybe not. Google’s rhetoric suggests it might be struggling to sell Australia’s news media on its offer to pay to publish stories in News Showcase. Publishers want to be paid for links in the search engine itself.
That could take Google to Plan B: abandoning all or part of the Australian search market.
The news about Google’s experiments has shaken up old media: “A chilling illustration of their extraordinary market power,” said Nine, quoted by the Nine mastheads. Sure, isn’t that the point?
The experiment goes to the heart of the argument between old media and big tech: are search links to news essential to draw users to the search engine (as old media claims) or do the links benefit news media by pushing readers into news sites (as Google claims)?
In economic terms Google wants to work out the value exchange. It says it delivered $218 million in subscribers and advertising to publishers in 2018. It will be using this experiment as a control to give it two talking points: will users miss news links when they’re gone? And can old media afford to sacrifice the traffic that Google delivers them?
Facebook is ahead of them. It’s already declared it’s cancelling news in Australia, saying that, if the code goes ahead, it will stop Australians posting news in their News Feed. Easier for them. It adjusted its algorithm back in 2018 to prioritise family and friends over news posts.
Google’s Australia revenue last year was about $4.8 billion. It will be balancing how much money it might lose by restricting search in Australia against the cost of meeting old media’s demands — not just in Australia but everywhere else it operates.
Not all Google products are affected by the proposed code. About a quarter of its income comes from its ad tech services that place display ads on web pages, advertising on YouTube and sales of business services around its Gmail offering.
Even without news, a restricted Google search engine would remain the default for most Australians who use Android phones and Google Chrome. Google also pays Apple about $10 billion to have its search the default option in iOS. It knows user inertia is a powerful tool.
It could use Australia as a bigger experiment, pivoting its search engine to where the money is, as an online directory of services. For those old enough, think Yellow Pages for the web. They could trial going head to head against old media’s digital classified offerings like News Corp’s realestate.com.au and Nine’s Domain.
The current experiment will be giving them the pointers they need. How much traffic (and, most importantly) how much advertising would this model draw? If free links are found to be essential to draw traffic, how many would they need?
It will provide the ultimate answer to the question posed by the mandatory code. Who needs the other more: old media or big tech?
What impact would losing local news links in Google search results have? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say column.
The idea that Google and Facebook should pay to link to old media especially the Nine papers and News Corp Australia is ridiculous. For one when they link to the majority of the Nine/News Corp old media they are linking to paywalled content.
The AFR, the Oz, Herald Sun, Daily Telegraph & Courier Mail for instance have hard paywalls. Non-subscribers clicking on those links from Google and Facebook would come across a splash page asking them to subscribe. The Age and SMH allow for 5 free articles a month. May I note that number used to be 30 free articles a month. A bit too leaky of a paywall it was in the past so they’ve tightened it up.
So the benefit to these paywalled sites is not in advertising revenue because someone who clicks a link from Google or Facebook has to already be subscribed. Otherwise they will hit a splash subscribe page hard paywall. And I’m pretty sure there are no ads on those pages.
If Google removes links to all Australian news sites like Facebook plans to do and Google claims they provide $210 million worth of free traffic to Aussie news sites, Australian publishers will be begging for that traffic back just like has happened in parts of Europe. Facebook’s value in the traffic it provides would likely be around the same amount or more. So nearly half a billion in free traffic wiped out. Sounds like by asking for $600 million to a billion in addition to that free traffic the publishers are wanting to have their cake and eat it too.
The Nine papers and News Corp Australia are now majority subscription businesses. They should be investing in the journalism that attracts subscribers in the way The New York Times, Crikey and The Washington Post do for instance. To call for News Corp Australia’s papers to invest in journalism is a bit of a stretch though. And I’m not sure that’s what attracts subscribers to NCA.
The Coalition think they are so smart by including ABC in the News Bargaining Code as a concession to the left. But they seem to be using all their smarts in misguided ways because they hate investing in the ABC as it is. And I can’t see them ever setting up a fund with sizeable funds to support public interest journalism (even though it definitely should be done) as these ventures tend to end up targetting and being critical of corruption. And the Coalition hate to be held to account and answer for their crimes as we have seen with the way they treat the ABC.
The news bargaining code will break the way the spirit of the Internet works in Australia and should be abandoned. If the Coalition Government can spend hundreds of billions on non-working submarines and fighter jets surely they can set aside funds to support public interest journalism. And as someone living in a regional area they should inject some of these funds into local news initiatives. A functioning democracy demands strong journalistic institutions.
Excellent response. Thanks.
Agree. Especially the bit about support and need for regional news and journalism, where ABC coverage is essential.
“If the Coalition Government can spend hundreds of billions on non-working submarines and fighter jets surely they can set aside funds to support public interest journalism.”
The difference is that the Coalition is not buying military junk, except as an irrelevant by-product of its real concern, buying votes and pumping money into the pockets of its cronies and paymasters. There is no such reason to give any support at all to public interest journalism, which it wants eliminated. The only sort of “journalism” the Coalition likes is hard-line pro-Coalition propaganda.
You can incognito/private browse mode through the smh and age paywalls. I do this to stop the Guardian begging me to make an account, too. Does not work on news corp, fortunately, or I might end up reading a non-zero amount of news from them.
I have 2 desktops at work and a desktop and laptop at home. With SMH giving 5 articles per month by using DDG, Firefox, Safari and Chrome I get 20 articles on 4 devices = 80 articles per month. I used to subscribe to SMH but like The Guardian once they have your credit card I found it difficult to stop auto subscribe. But I rarely use anywhere near 80 articles as the quality of SMH and Age have gone down the gurgler.
Good analysis, could be used as an article to inform the public versus media taking the NewsCorp line….. many lack digital literacy and especially how digital platforms operate.
Clearly there seems to be much that is complementary between legacy media and digital, or interdependence, but digital will win vs. legacy media; while legacy media and supporters make a lot of noise…..
“What impact would losing local news links in Google search results have?”
I dunno. First, I never use Google search because Duck Duck Go is better for privacy. Second, I don’t get local news through a search engine. So to me this is like a quarrel in a far-away country between people of whom I know nothing.
I do much the same…I do use google docs, but hey I can adapt to something else. Panic about nothing in my view
Duck Duck Go. I’ll try that, thanks.
So will I!
Agree as I use Duck & Go fir general use.
I haven’t used Google for years. Duckduckgo is superior & doesn’t track searches or share user information.
Duck Duck Go incoroporates information from other website engines.
This however does not change the fundamental question. If the biggest search engine in the australian market is targetted by the legislation, and they decide to pull out because it is too expensive, who will pick up the pieces?
If Duck Duck Go becomes the biggest and are targetted by this law, will they too remain in Australia?
“As of 2015, DuckDuckGo was profitable, and its revenues exceeded US$1 million.”
That’s under .001% of Google’s revenue that year. Revenue is of course not profit. So asking what happens when Google disappears and DDG takes over and the legislation is amended and so on… is rather too speculative for me.
I’ve been using DDG for a while, very happy with it. Don’t use Google at all except for Gmail – wonder if that will be affected?
Must try them thanks! What’s the issues around privacy?
Google tracks all your searches and related data, keeps it and trades it with advertisers, although you can try to adjust the privacy settings. If you do an internet search on ‘business model duck duck go’ you will easily find explanations of how and why DDG does not do that.
I set DDG as my home page on my browser on every computer I use. I still have Google in my bookmarks toolbar (Firefox) and will switch between the two if I am not getting the results I want. But DDG is my first choice.
And, yes, I get my news from Crikey, the Guardian, the ABC and the SMH. I cannot comprehend why someone would allow apps like Google or Bing to curate their news.
Years ago I used to use AltaVista, long before Google became a thing. I remember trying out Google while it was still a research project at Stanford University and deciding I preferred Alta Vista. But the morons who owned AltaVista did not realize the value of what they had and sold it to even stupider morons who destroyed that value.
Firefox is still round and good.
And does Firefox have its own search engine?
Yep, no panic, if they really intend to do this – they will really lose out on HUGE amount of money, they are trying to manipulate a public outcry – IF SEARCH is the issue, not advertising, the government and all of us should publicise Duck Duck Go, Yahoo, Bing and others – would be great to break the dominance
Yes indeed.
Way to go Chris with extrapolating Google dropping news searches to Google pulling out of Australia. Won’t happen.
What will happen is the news organisations – News Corp, Nine Media etc will get bloody noses.
What did they think was going to happen – they need Google more than Google needs them. They are so used to rent seeking behavior, particularly when dealing with our Government, they thought they could do the same with the big gorilla. Pretty stupid.
As long as google destroys the redneck media and news limited I don’t care if they drop bombs on the bastards and let’s see how the Murdoch media grovelers enjoy life on Newstart, they are always bagging those unemployed thru no fault of their own as bludgers so it will be a welcome sight to see them rummaging thru woolies food bins.