Google News makes no money, it has no advertising. Hundreds of millions of people come to it every day, where they click on hyperlinks taking them to different newspapers to read the full article.
Newspapers, on the other hand, make a lot of money from Google News. They receive billions of referrals, and get billions of extra dollars from the ads they have on their web pages.
Spanish authorities pushed Google to the edge of the cliff, and called its bluff. Google decided it had had enough and announced that on December 16th, 2014, its Google News España (Spain) service would shut down.
For Spanish newspapers, which are already suffering from declining print sales and advertising, and like all media around the world, can only survive by growing online, this must be the kiss of death.
Google News is by far the largest online referrer of news items. Losing that will be like a farmer telling the elements he no longer wants it to rain unless nature pays him every time it does.
Will the new legislation go down as the most foolish move in the history of publishing in Spain, or a blessing?
Google News decided to leave Spain because legislation there will now require Spanish publishers, regardless of their wishes, to charge a licensing fee to news aggregators, such as Google News, for use of their content. All Google does is place the headline with a hyperlink, and a one-line synopsis of the article.
Why should Google News, which is currently making no money, pay newspapers, which make a fortune from Google News referrals? In fact, many could argue with more conviction that if any party should be paid, it should be Google.
American experts mostly believe that Spain has shot itself and its newspapers in the foot. But not all of them.
Executive Director of the American Press Institute, Tom Rosenstiel, said Google’s decision could give the country’s media a chance to come together and create their own search algorithm.
Fox News Latino quotes Mr. Rosenstiel, who said:
“It’s easier to do that now (create your own search algorithm) than 10 years ago and it could be a good opportunity if they all team up.”
Most experts, however, say the immediate effect of Google News’ withdrawal from Spain will be a sharp fall in Spanish news Web sites. It could push many to bankruptcy.
Whoever believes Google does not matter, and that most news referrals now come from social media websites, is in for a big disappointment. In March this year, Google was found to claim a 41% market share of search engine users, up from 35% in 2013.