The future of news should not harm a free and open web
Editor's Note: This first appeared in The Globe & Mail on October 25.
In 1990, more than 75% of newspaper ad revenue was from classifieds, department stores, auto dealers, and supermarkets. Today, people buy and sell used skates on Kijiji and social marketplaces. They start their holiday shopping online and turn to job sites to find part time work. Print still plays an important role in the path to purchase and advertising, however, the internet and the emergence of the digital economy has changed user behavior and drastically impacted newspaper business models.
Many Canadian publishers are innovating their way forward - The Globe & Mail is a global leader in award-winning digital journalism, Village Media has reinvented local news and found profitability in cities like Sault Ste. Marie. Glacier Media has grown a successful real estate listings site (Rew.ca) in Western Canada. But now, big news publishers are calling on governments to compel companies like Google to pay hundreds of millions a year for links to news content that shows up in Search results - something we don't do for anyone.
Demanding that Google pay to include search results undermines the very principle of the open internet as we know it today. People trust Google to help them find useful and authoritative information, from a diverse range of sources. Results in Search, including links to news, are determined by relevance - not commercial considerations. Google does not accept payment to appear in organic search results nor does it pay for sites to appear in search results.
While Google is committed to contributing to the sustainable future of journalism, these proposals fail to recognize that's not how search engines work, or should work. Nor does it reflect the value search brings to the news sites who benefit from search traffic. In essence, search is a global, virtual newsstand, driving valuable traffic from Google's users at no cost to the publisher. When you search on Google, no matter what you are looking for, you will see a list of blue links and in some cases, one or two lines of text (sometimes referred to as 'snippets'). In the case of searching for a news article, you can only read the article after clicking through to the publisher's site. In 2019, Search drove over 5 billion visits to Canadian news publishers for free. This traffic is valuable because it gives publishers the opportunity to show readers advertisements or offer subscriptions. Deloitte estimates the value of traffic to be around CDN $ 0.10 per click, which equates to about half a billion dollars a year for news publishers.
While we send significant amounts of valuable traffic to news publishers, news actually represents a tiny proportion of overall searches. Looking at our overall business in Canada, Google last year generated approximately $ 9M in revenue - not profit - from clicks on ads against possible news-related queries in Canada. And news represents a small number of queries - in 2019 just 1.5% of total searches in Canada.
The internet has dramatically transformed the media environment and how we all access information. If publishers receive over $ 500M in value from Search while Google only earns $ 9M in revenue, it's clear that publishers receive significant benefit from this exchange. Digital platforms do not owe publishers compensation for the emergence of an Internet based economy, nor is it a sustainable solution to one single industry's economic challenges.
None of this is to deny the vital role that the news industry plays in our society. Earlier this month, we announced Google News Showcase, an initiative committing more than USD $ 1 billion globally to pay publishers directly to create and curate high-quality content that will drive even more traffic to publishers' sites.And our work doesn't stop there - we are deeply committed to supporting the future of journalism for the long term. We make it easier for users to subscribe to premium content through Subscribe with Google. We created the Google News Initiative to provide programs, tools and training to help journalism thrive in the digital age. We provided emergency funding to 5,600 local publishers globally, including 150 newsrooms across Canada, to help with the impact of COVID-19. And our work doesn't stop there - we are deeply committed to supporting the future of journalism for the long term.
We have been in Canada for over 20 years. We have more than 1,500 employees here. Last year, research from Public First showed that Google's search and advertising products helped generate $ 23B in annual economic activity for over 500,000 businesses in Canada, a total impact equivalent to approximately 1.1 percent of Canada's entire GDP. We are deeply proud of the work we do here and the contributions we make. We will continue to actively engage in discussions with governments, regulators and industry. And we will continue to collaborate with the news industry on further innovation to enable a sustainable future for news.