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By Benjamin Mullin
Alphabet Inc.'s Google is in talks with publishers about paying a licensing fee for content in a news product, according to people familiar with the matter, a move that would mark a shift in the search giant's relationship with news organizations.
Talks are early, and it isn't known if agreements will be reached, the people said. Most of the publishers in talks with Google are outside the U.S., including in France and elsewhere in Europe, one of the people said.
Financial terms of the possible licensing agreements being considered couldn't be learned. The talks are focused on licensing content to appear in a free Google product, one of the people said, though the details are still being hammered out.
Licensing deals between Google and news organizations for its news product would be a watershed moment for publishers, who have long sought compensation from the search giant. Google sends news organizations huge amounts of traffic each month through its search engine but has so far resisted paying news organizations for their content directly.
Google would be the third tech giant to move toward paying publishers. Last year, Facebook said it would pay news organizations -- in some cases millions of dollars a year -- to license their headlines and story summaries for a news service.
Apple Inc. last year launched its own news app, Apple News+, which for $9.99 a month provides access to articles from hundreds of magazines including Vogue, GQ and Sports Illustrated. In addition to The Wall Street Journal, the Los Angeles Times and Toronto Star are among the North American newspapers that joined the service.
The Google talks come amid pressure from news executives outside the U.S. -- especially in France -- who have asked Google to pay a licensing fee to display their content in its search results. Google said in September that it wouldn't pay European news organizations for the right to include their content in its search results, sparking a backlash among publishers who expected compensation after the passage of a new European Union copyright law.
Some news organizations have recently said they would develop their own news aggregators to compete with tech giants such as Google, Facebook and Apple.
News Corp -- the parent company of Wall Street Journal owner Dow Jones -- earlier this year launched Knewz, a website that curates headlines from a variety of news sources. AT&T Inc.'s CNN said last year it is developing Newsco, a news aggregator that aims to compete with news products from Facebook and Apple.
News organizations have long pushed tech giants that display content in their products for licensing fees. For years, tech companies resisted, favoring donating to news organizations through philanthropic arms or offering indirect compensation in the form of increased web traffic.
Google and Facebook have been facing growing criticism for their roles in the news industry's struggles by sucking up much of the advertising revenue that used to go to newspapers. Combined, Facebook and Google are expected to earn 61% of all digital advertising revenue in the U.S. this year, according to eMarketer.
BuzzFeed Chief Executive Jonah Peretti said in an interview that he was encouraged by reports that Google was planning to pay news organizations to license content. When he was raising money for BuzzFeed a decade ago, he told potential investors that major tech firms such as Facebook and Google would ultimately pay publishers for content, the same way cable companies pay TV programmers for shows.
"You have to have some quality journalism or the vacuum will be filled by counterfeit journalism," Mr. Peretti said. He declined to say whether BuzzFeed had been approached by Google.
When Facebook launched its news service last year, Chief Executive Mark Zuckerberg said the social-media giant's decision to pay media outlets that participate in the service was a model other internet companies should follow.
"I think every internet platform has a responsibility to help fund and support news," he said at an October event in New York, where he discussed the service with Robert Thomson, chief executive of News Corp, which owns the Journal. "Hopefully others will follow the model we are helping to set up."
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
February 14, 2020 16:01 ET (21:01 GMT)
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