Google has hit back at a News Media Alliance report which estimates the search giant's annual take from news publishers' work at $4.7 billion as inaccurate "back-of-the envelope calculations".
The NMA published the findings of a report it prepared with economics consulting firm Keystone Strategy - which has also worked with Facebook - ahead of debate on a bill that provide limited safe harbour protection for news publishers to negotiate collectively with platforms such as Google and Facebook.
President and chief executive David Chavern says this is the only way to correct the current marketplace imbalance and control who sees publishers' content and when.
The report analyses how Google uses and benefits from news, describing it as a key source "on which Google has increasingly relied to drive consumer engagement with its products".
NMA says the amount of news in Google search results ranges from 16-40 per cent and estimates the platform received $4.7 billion in revenue in 2018 from crawling and scraping news publishers' content, without paying the publishers for that use.
"News publishers need to continue to invest in quality journalism, and they can't do that if the platforms take what they want without paying for it," says Chavern. "Information wants to be free, but reporters need to get paid."
The report says the figures are conservative, with the actual value of news content to Google difficult to quantify because of the various ways it uses news content to drive traffic, develop its products and entrench its dominant position. In addition to using news content for product development, such as training its artificial intelligence services, Google is tailoring its products - ramping up its use of news - to keep users in the Google ecosystem.
According to the report, since January 2017, traffic from Google Search to news publisher sites has risen by more than 25 per cent to approximately 1.6 billion visits per week in January 2018. Corresponding with consumers' shift toward Google for news consumption, news is becoming increasingly important to Google.
"The findings clearly point to Google responding to an increase in consumers searching for news, creating and tailoring products that keep users within its ecosystem," says Chavern.
Google's news products also allow it to capture user data that help it improve core services, and the report says Google News had more unique monthly visitors in the US than top news websites such as the New York Times, CNN and Huffington Post.
The New York Times said the sum was more than the combined ticket sales of the last two 'Avengers' movies, or what "virtually any professional sports team" is worth.
The newspaper quotes Philadelphia Inquirer PBC chief executive Terry Egger saying the study "blatantly illustrates what we all know so clearly and so painfully".
"The current dynamics in the relationships between the platforms and our industry are devastating."
Google contested the study's findings on Twitter, saying the "back-of-the envelope calculations" were inaccurate, because the overwhelming number of news queries did not show ads.
Keystone Strategy used a 2008 statistic in which an executive estimated that Google News brought in $100 million.
Egger told the NYT there was potential for "a beautiful codependence," and that the big tech companies "should show some appreciation" for the content that news publishers provide.
Chavern says the big tech companies like the arrangement: "It's a good business, where you write for them."
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