News organizations nationwide have been complaining for over a decade how Big Tech was thriving and continuing to do so partly on the backs of journalists. Now a new report finds that Google made almost as much ad revenue last year on news searches as the entire news industry combined made on its own content.
The study, the data behind which Google has already called "back-of-the-envelope calculations," was released Monday by the News Media Alliance, and it finds that Google made an estimated $4.7 billion in 2018 "from crawling and scraping news publishers’ content — without paying the publishers for that use." That's compared to an estimated $5.1 billion taken in by all news publishers in the country last year in digital ad revenue, combined. The New York Times, which along with many major hubs of traditional journalism has been beating the drum for regulation of how tech companies — and Facebook in particular — treat publishers, ran with the study, and spoke to several experts who took it as confirmation of what the news media has been saying for many years: Tech companies are siphoning away our ad dollars and using our content without paying for it.
But Slate has taken a different position on the calculations, and is taking Google's side in saying that the math seems pretty "flimsy" when you look a little closer. "The group arrives at its headline figure with little more than a back of the envelope scribble based mostly on a number one-time Google exec Marissa Mayer mentioned offhandedly during a lunch in 2008," writes Slate reporter Jordan Weissman. "As much as I, a journalist who cares about journalism, wants the big tech problem addressed, this effort is so amateurish that I’m guessing it will probably do more harm than good for the industry’s cause."
The number being referred to was an estimate that Mayer mentioned at a Fortune conference, saying at the time, 11 years ago, that Google News was worth about $100 million to the company because of how many users it drove through search.
The News Media Alliance, which it should be noted is itself a lobbying group for the media, makes the fairly irresponsible leap to say that the Google News app represented 0.7 percent of the company's overall revenue 11 years ago, so we can assume it represents about the same share today. There's then another leap: they write that because publishers say they get six times more traffic from Google's main site than the News app, then news searches on the main site must be worth 4.2% of overall revenue (six times 0.7), and the combined total is 4.9%, which when taken out of Google/Alphabet's known 2018 revenue comes to $4.7 billion.
Agreed, that is flimsy math, and it would be far more helpful if Google broke down these figures themselves — though Google has a vested interest in downplaying the amount of ad revenue it reaps from news searches.
In a statement, the company said, "the overwhelming number of news queries do not show ads." While there's some evidence to back this — no ads are served on the News app or on the News tab under search — there are top-line ads served on the main page of search results which often comes up with a Top Stories carousel that sits just below an ad.
As Weissman writes, "What’s a bit infuriating about all of this is that Google probably does benefit in significant ways from being a major news destination, and at this point, there’s an argument to be made for making it share some of those rewards with media organizations." But in the absence of internal data from Google, it is hard to quantify how that model should work. Perhaps with the impending antitrust investigations by the federal government, some more light will be shined on this topic, and Google will be coerced into paying something back to the news industry.
Similarly, Facebook benefits demonstrably from being a news source to billions of people around the world, and has consistently resisted the idea that it should therefore function as a news room, and vet the content it displays for its quality and veracity. Also, Facebook has changed its news feed algorithm multiple times over the years to emphasize and de-emphasize publishers' content. And the most recent hints from Mark Zuckerberg suggest that the company will continue to emphasize personal sharing and "private" interactions over publicly published content, though that is unclear.