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Google tries to play nice with European publishers with $163M fund

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Google is attempting to mend relations with European publishers, launching a series of initiatives to train digital journalists and work with papers to build new products to deliver the news. The US company announced partnerships with eight European newspapers — including The Guardian and The Financial Times — as well as a $163 million pot (€150 million) to fund "innovation in digital journalism" over the next three years.

The announcement comes at a time of heightened tensions between Google and European institutions, with the European Union formally accusing the company of monopolistic search practices earlier this month. Although the charges do not cover the news industry, publishers in Europe have been criticizing Google's business practices in the market for years — especially the company's habit of aggregating stories to appear in searches and Google News.

"We've made some mistakes along the way."

"I firmly believe that Google has always wanted to be a friend and partner to the news industry, but I also accept we’ve made some mistakes along the way," said Carlo D'Asaro Biondo, Google's president of strategic partnerships in Europe, during an event in London transcribed in Google's European policy blog. "We recognize that technology companies and news organizations are part of the same information ecosystem. We want to play our part in the common fight to find more sustainable models for news."

Creating these "sustainable models" is the challenge for both Google and publishers. Although, as Biondo notes, the digital business model of traffic, advertising, and subscriptions is working for some English-language papers (publications like The Guardian, The New York Times, and The Daily Mail have all been able to expand to new audiences), the battle is more difficult for smaller publishers whose audience is limited by their language. In some cases, Google might find that increasing traffic — and the advertising revenue that goes with it — can only help so much.

"We are cautiously optimistic," said Mathias Blumencron, digital editor at German paper Frankfurter Allgemeine Zeitung — one of the partners in Google's new scheme. "The main goal for publishers is this: can we find sustainable mechanisms that can finance quality journalism in the digital world? If we can, then the initiative is a success. If not, then we will leave."

Google claims "publishers are in control."

However, although Google has a vested interest in helping news publications succeed (news is a staple product that draws users to its services), it's clear that underlying tensions remain. For example, Biondo claims that "publishers are in control" of Google News because they can opt out at any time. However, when German publishers did exactly that in November last year, traffic to their sites dropped so sharply they reversed their decision in two weeks. Similarly, when Spanish lawmakers attempted to charge Google for aggregating news stories, the US company simply stopped operating Google News in Spain. This new investment fund may show that Google is willing to work with European publishers, but the US company is not going to forget its own interests either.