Google moves toward micropayments for newspapers
With micropayments and transaction platforms a buzzworthy sector of the Web right now, it's no surprise that Google would want to get in on the game.
But Mountain View's pitch is a little bit different: the payment platform it plans to build, according to Harvard's Nieman Journalism Lab, is geared toward newspapers that want to charge for digital content.
Google's plans are detailed in a document the company sent to the Newspaper Association for America. The document, a response to a query from the association, also requested more information pertaining to paid-content models.
"While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year," explained the document (PDF) posted Wednesday by Nieman Lab. "The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time. Google will mitigate the risk of non-payment by assigning credit limits based on past purchasing behavior and having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud. Merchant integration will be extremely simple."
This is interesting, as Nieman Lab points out, because Google's plan aggregates payments into a bundle for processing, something that could potentially quell publisher concerns about transaction fees. The plan is very preliminary, obviously.
"The Newspaper Association of America asked Google to submit some ideas for how its members could use technology to generate more revenue from their digital content, and we shared some of those ideas in this proposal," according to a statement Wednesday from Google's PR department to Nieman Lab. "It's consistent with Google's effort to help publishers reach bigger audiences, better engage their readers and make more money."
Google's Checkout product, the online transaction service that would likely be the base for a micropayment system, has been around for a few years now. But it hasn't made a huge dent in far bigger competitor PayPal, and it's also been experiencing some big problems, as my colleague Tom Krazit reported Thursday.
It ought to be pointed out, of course, that Google has been the target of harsh criticism from the newspaper industry (as well as other sectors of the publishing business) for profiting from third-party content. Wall Street Journal editor Robert Thomson went so far as to call online news aggregators (not mentioning Google by name) "parasites or tech tapeworms."
Meanwhile, the payment platform that's been getting the most scrutiny and interest in the tech press these days has been, of course, Facebook's "credits" system. But while Facebook's pitch thus far has been toward nonprofits looking for small donations and game developers selling virtual goods, it's still impossible to discount the fact that Google's micropayments move could be aimed at staking a claim in the same territory.
Note: This post was expanded at 7:09 a.m. PDT. And on Friday morning, the Associated Press reported that Google was one of several tech companies, including IBM, Microsoft, and Oracle--that responded to the Newspaper Association of America request, though the AP story offered no details on those other companies' responses.
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline. 
Where is the government in all this? They should be investigating Google for rights abuses and possible anti-trust violations.
Oh, wait, they don't.
Part of the reason why so many papers are going under is that not only are people reading actual paper newspapers less, but sites like Google actually steal the stories from the newspaper web sites, or link to them so people can access the content without actually going to the site the story is on.
I don't know if anything has been done about this lately, but I hate to see a valued resource like the newspaper industry going broke.
Perhaps they could also look into some type of link randomizer to change the links so although they are easily accessible from within the paper's site, the like will be broken quickly so outside sites linking to the story will just end up with a broken link.
The only thing tha changed was it moved from printed matter to digital.
This is different than the newspaper going broke. That problem I do believe has a solution in the paper going online and becoming the official homepage for it's community. News, Weather, Sports, Events and such all on your home page. National companes try to do this, but a local entity like a paper could do a far better job as they have the staff and resources to pull it off. For whatever reason they don't, and if they dont' at least try, they will die.
1) By linking directly to the news item, the user bypasses the newspapers' main sites and hence ad revenues are lost.
2) Google nevertheless makes money on ads even though it links to 3rd party content
3) Google does not pay the newspapers for their content or share revenue with them
Granted, it increases the visibility and/or the base of the host but does not contribute to their bottom lines.
The sooner the Internet gets off the "one legged" system of everything paid for my adverts the better.
Id happly pay 1 or less cent for an article if the process is quick, easy or even completely transparent.
Journalism not supported by advertising is far better imho.
Quality, unbiased, investigative journalism just as good as traditional media (if not better) can finaly be supported.
We are worth next-to-nothing per person in advertising revenue. It wont take much (per person) to give newsites A LOT more revenue.
"but sites like Google actually steal the stories from the newspaper web sites, or link to them so people can access the content without actually going to the site the story is on."
O_o
You go to the site when you click to read the story.
Google arnt ripping content and hosting it themselfs. Goto news.google.com and try it for yourself.
You DO goto the website. They post a few lines at most....just like every other site they search.
You just don't goto the front page.
The idea of needing to goto the newspapers *front page* to enjoy a story is just idiotic, counter-intuitive and a plee of desperation from a redundant system. And so is the idea you have to use their search function.
I -dont- want my news from one source any more.
I want to enjoy news from thousands of sources, so I dont get biased to one sides view.
This is the way of the web.
Get used to it.
If newspapers need to force people to spend longer on their site while they find what they actualy want to read....most people wont bother -at all-
"Google and Apple are both becoming everything and everybody hated about Microsoft."
No they arnt.
Google have consistently pushed open formats, platforms and standards. Given their tools away for free, and generally supported net neutrality and open-source software.
They are acting nothing like Microsoft or Apple...both keen on DRM and closed formats. Both liking customer "lock-in" to their products.
Not to say they are perfect, but they act quite unlike Microsoft, and peoples complaints against google are mostly on different matters.
- by mscritsm October 11, 2009 7:56 AM PDT
- How is it that Google thinks it can make micropayments work even when credit card companies cannot? They've got all the hurdles of accessing merchant accounts, verifying data, dealing with deadbeats, etc. that credit card companies do. The referenced document suggested that Google might pre-charge you in set amounts and then take micropayments from this reserve. In this case Google benefits from the float of having your money all this time. But even so, it's just not clear how Google can make money on this while the credit card companies cannot.
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