As I said earlier this month, the Internet has dramatically transformed the media environment and how we all access information. We know that for news media companies, particularly smaller and regional companies, the transition to digital has increased competition, increased unbundling, and reduced classified and circulation revenue streams. We all care about the importance of a vigorous news industry as it makes progress in transitioning to a digital environment.
At Google, we are actively working on solutions that we believe can help publishers derive more revenue from their content. We’ve heard the feedback from the Government, regulators, and industry and are in discussions to license and pay to display or provide full access to news content beyond simple snippets and links.
But as we move forward, it’s important that we have a discussion based on facts. There’s been some recent talk about the profitability of online news in Australia, including the suggestion that online platforms should be forced to pay publishers AU$600 million or more every year. This is based on an assertion that news accounts for 10 percent of queries and generates about 10 percent of our gross revenues in Australia.
We all agree that high-quality news has great social value, but we need to understand the economics as well. We would like to provide some facts and figures to address inaccurate claims about the economics of links to news content on Google Search, as well as highlight our ongoing commitment to work with media companies to increase the value they get from their news content.
First, the direct economic value Google gets from News content in Search is very small. We don’t run ads on Google News or the news results tab on Google Search. And looking at our overall business, Google last year generated approximately AU$10 million in revenue—not profit—from clicks on ads against possible news-related queries in Australia. The bulk of our revenue comes not from news queries, but from queries with commercial intent, as when someone searches for ‘running shoes’