Google is not the only company which has been investing in the news but it is definitely the one which has been splashing out the biggest amount of money. Although news are not a subscription service, more contents equal more readers and thus a higher value for the ads to be displayed on the pages. Richard Gingras, Google News Vice President explains: << People rely on Google to help them find useful and trustworthy information coming from several, diverse sources. Our task is to sort such information and link them to the most relevant ones […] In order to deserve our readers’ trust we don’t accept payments from publishers wishing to be included among the search results. We sell ads, we don’t sell search results>> (How Google invests in news).
The trick is not to be paid by publishers but to help them publishing better contents in an easier way and consequently be paid by advertisers. Indeed, it is no secret and no surprise, that BigG’s revenues mainly come from advertising. Having always worked to sort information to allow people to find the contents they are after as quickly as possible, when Google recently modified the layout of the search results pages, this caused a hail of criticism. Here is what actually happened: Google updated the pages design. Nothing too radical, it happens quite often. However, the new graphic layout made it more difficult for people to distinguish between contents and advertising. To the point that, following the consequent outcry, Google was forced to redesign the pages again (Google backtracks on search results design).
Let’s go back to contents or, better, to their value. If more contents mean more advertising, investing in contents means, first of all, supporting publishers. This is the reason why Google News Initiative has invested 300 million dollars to help publishers all over the world to develop new products and business models which may adapt to the digital market. The internet being today’s newsagent’s, publishers have to learn the new marketing rules.
Publishers are not expected to pay Google but Google will make more money if publishers will thrive. According to Deloitte in Europe, users click on Google news 8 billion times a month, i.e. 3.000 clicks per second reaching newspapers home pages for a value of 4 to 6 Euro cents per click. The more the clicks, the higher the value of ads (The impact of web traffic on revenues of traditional newspaper publishers).
I opened this post by claiming that Google is not the only company investing on contents, at the moment. LinkedIn has been doing the same. The social media dedicated to professionals boasts 675 million users in the world, 13 millions only in Italy who are considered among the most active in Europe. In short, the company has realized that two million posts, videos and articles are shared every day generating tens of thousands of comments and reactions every hour. Users are eager to read news about their job, they want to be updated, they want to discuss the most interesting matters with other professionals and to be always on track. And LinkedIn is willing to take this chance. Its business model is different from Google’s but still profitable. Let’s consider the advantages of being the most valuable source of news for the world of global professionals and to the number of premium subscriptions (not particularly cheap) which may follow, as well as the new possible advertising formats.
In short, nowadays, investing in contents is fruitful. And for users this may finally mean better quality.
Are you satisfied with online news and do you read them? Tweet @agostinellialdo.
To find out more about the digital world, you may read my latest book entitled: “People Are Media”
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