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Google Plans Paid News Platform September 10, 2009

Posted by Joanne KY Teoh in Advertising, Convergence, Journalism, News, Social Media, Trends.
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Google is developing a payment platform for newspapers that would allow them to charge for content online, contending that the service will drive traffic to news websites.

Harvard University’s Nieman Journalism Lab said Google had submitted a proposal to the Newspaper Association of America in response to a request made by the NAA to major technology companies. Download the document here.

The Web giant says micro payments will be a payment vehicle available to both Google and non-Google properties within the next year. The idea is to allow viable payments of a cent to several dollars by aggregating purchases across merchants and over time.

googlecheckout

To mitigate the risk of non-payment, Google proposes to assign credit limits based on past purchasing behavior and using its proprietary risk engines to track abuse or fraud. Revenue may be shared in a similar fashion to the iTunes App Store and Google’s own Android Market, both of which take a 30% cut of revenue.

We believe that content on the Internet can thrive supported by multiple business models – including content available only via subscription. ‘While we believe that advertising will likely remain the main source of revenue for most news content, a paid model can serve as an important source of additional revenue. Google

Given ‘the newspaper industry’s tenuous relationship with Google, the move is surprising. ‘Google’s popular news aggregator website Google News has drawn fire from some US newspaper publishers for linking to their articles without payment.

The micropayment system is likely to have bigger implications outside of the news industry. Other companies too are seeking to develop a payment platform for newspapers.

Journalism Online, a company launched in April which seeks to help news organizations make money on the Web, says it has more than 500 newspapers and magazines agreeing to join the venture as affiliates.

A payment platform would go online later this year to allow subscribers to access paid content at the websites of the affiliates using a universal Journalism Online account.

Rupert Murdoch’s News Corp. has held talks with The New York Times Co, Washington Post Co, Hearst Corp and Tribune Co, publisher of the Chicago Tribune and Los Angeles Times, on forming a consortium that would charge for news online

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