Who knits the purse-strings? - Google’s offer to papers

WILL GOOGLE control the shiny new pay-to-read systems that newspaper proprietors want? Last autumn, there were reports - on which the search engine company refused to comment - that it was planning to offer them a system. They're getting more frequent.

Many an e-commerce dream - and rather a lot of venture capital funding - has disappeared into the idea of users agreeing to pay a small amount of cash - maybe a penny or a cent or two, maybe less - to see or hear a small amount of content.

Such micropayments have been slow to take off: no-one really knows whether users are prepared to pay, because the mechanisms for them to do so have been clunky and a deterrent. And a subscription, giving access to an entire paper for year, is a faff to set up. (One magazine found that the volume of online comments fell dramatically when it merely suggested that drive-by commenters might like to register, while offering an easy way to avoid doing so.)

The banks haven't been entirely keen on the idea, though PayPal has managed to gain some trust and respectability in competition with them. If anyone can take on the banks and build a non-geek system for either kind of "paywall" with small transaction costs, it's probably Google.

Though Google still refuses to respond concretely to queries, the Guardian's Josh Halliday blogged that Google chief executive Eric Schmidt had this to say at a conference the paper organised on 1 July:

We want to enable paywall and non-paywall models. The current problem in the media industry: the analog rents are being replaced by small digital rents, people are losing their jobs and that's a very real problem. It's a very severe issue. Ultimately, revenue will eventually be higher because it'll be more personal. ...

The paywall is a model we provide. Let's run this experiment globally and see what happens.

A hint to the nature of the experiment is contained in the experimental service at http://fastflip.googlelabs.com

Google itself is nervous about the possible dominance of Apple's iPad as a platform for reading news. The Freelance is nervous about the dominant position Google would get by being the gateway to get to that news - and would expect regulators, for whom "dominant position" means "on the face of it, an illegal monopoly" to be at least as nervous.

Last modified: 30 Jun 2010 - © 2010 contributors
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