Can Google fix the $108-bn news industry it helped break?

The innovation that turned Google and Facebook into money-making behemoths wasn’t search or social networking. It was selling advertising space alongside content they got for free.

Now, as regulatory investigations in the US, Europe and beyond raise the prospect of breaking up the Silicon Valley companies, they’re tweaking that formula. The two firms are striking deals to start paying one important source of that content: news organisations. Not only does this help bring them in line with new copyright laws, it also gives them the chance to regain the media industry’s trust.

Later this month, Facebook will launch its news tab (which has been available in the US since 2019) in the UK, with names such as the Guardian, the Economist and the Independent. Google has meanwhile started rolling out its latest news offering, the Google News Showcase, which is already live in Germany with 20 publications. Next up it’s going to the UK, France, Belgium and Australia.

Both products set a significant precedent in that the tech giants are paying publishers to license their stories.

In the past, any revenue the two companies directed toward publishers came from either one-off philanthropic funding for news projects or a share of ad income from users clicking on a story — neither of which has been enough to build a sustainable media business. Pricewaterhousecoopers LLP expects the global newspaper industry’s combined advertising and circulation revenue to fall from $108 billion to $86 billion between 2019 and 2024.