In fact, the new law, badly thought out and pandering to elderly news editors who don’t understand the internet, won’t affect Google at all – although it will stifle Spanish innovation.
In a blog post here, the head of Spanish Strategic Alliances, Luis Collado, sniffs that Google News last year sent 10 billion readers to newspapers worldwide, and that Google paid over 9 billion dollars in advertising revenue to newspapers. Also, they don’t make a penny off Google News, so you can’t sue them under the law.
Newspapers are free to elect between staying in Google News or leaving, he explains, but, and I’m paraphrasing here, you if you stay you ain’t getting paid.
You see, the business model, which Rajoy and his editorial buddies fail to understand, is very simple. Google has the audience, us. They show us the news stories we’re interested in, and we click through to the most interesting one. Then, once there, we (hopefully) click on an advert put there via Google and the newspaper shares the revenue with Google.
If a newspaper leaves Google news, they lose the audience. And so they lose revenue. Simple.
It is, quite simply, a game of chicken. And Google is bigger than Spain, so it doesn’t much care. Whereas El Pais, for example, probably earns more than half of its digital income via Google sent traffic.
Of course, if we look at Spanish sites such as the popular meanemé, about the only successful Spanish site at the moment now that Terra and tuenti have basically gone tits up, we see a different story. Because they let users share and comment on news stories. Only, under the new law, everytime they link to a news story, they’d have to pay a royalty. So they’re going to go bankrupt, and their handful of Spanish employees in Spain, go home without a job and have to work in a bar, serving more successful Anglo-Saxon tourists.
I’ve said it before and I’ll say it again: the new “google law” is good for Google. Because it kills off all domestic competition.