Google’s War on California is a War on Journalism

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The state of journalism is in flux in 2024, and much of this has to do with one company, Google. The largest search engine in the world is responsible for delivering headlines to millions, if not billions, of viewers every day. It’s a driving force for journalism. Yet, it’s positioning itself to do more damage to this already struggling industry. In fact, we’re wondering if its actions will be the downfall of journalism.

Google’s war with paying journalists

If you don’t know about the current drama going on between Google and the state of California, let’s catch you up. Now, this situation is a hydra with many heads, but much of it revolves around a single question: Should Google be paying journalists? Google and news publications have sort of a symbiotic relationship. Google delivers traffic to news publications, which generates ad revenue. This ad revenue benefits both the publications and Google.

While this is mutually beneficial to both parties, the conversation becomes more nuanced when you take into account how much Google benefits from the relationship compared to the publications. Several sources claim that Google makes much more money from this relationship than the publications.

According to Google’s earnings report for 2023 (via Oberlo), the company made $175.03 billion in ad revenue from Google Search and “other properties”. This doesn’t account for YouTube ads or Google Network ads, which brought in north of $10 billion each.

A groundbreaking study from Columbia University estimated about $10 billion of that comes from news website traffic. It states that the company makes that amount each year. However, you can always expect some sort of fluctuation. The same report also roped Meta into the conversation and claimed that it makes about $2 billion each year from news sites.

Altogether, the report states that Google earned $237.86 billion in the year 2023 from advertisements. This is a 6% increase from 2022’s numbers ($224.47 billion). In fact, the company has been making more money on ads year over year.

This is important to note because ad payouts for publications are somehow diminishing.  The news industry is shrinking and publications are being forced to shut down. This is an unfortunate thing to see. News companies rely on Google to deliver their stories to hungry eyes and divvy up the ad revenue. Publications are getting a diminishing share while Google’s share is increasing. How does that make sense?

Obviously, this doesn’t sit well with several governments around the world. This is why the Australian, Canadian, Spanish, and California governments confronted Google to make sure that journalists are provided for.

Google’s war with California

Now, onto the drama in the Golden State. The state of California has a pending bill called the California Journalism Preservation Act (CJPA). Basically, if the act passes, Google would have to pay a fee for pushing links to California-based news sites- think of it as a “link tax”. This fee would go to benefit the news sites that Google is linking.

However, as you could expect, the company is not too happy about this. In response to the news, Google has threatened to stop posting links to California-based news sites.

In fact, the company has already started doing this for “a small percentage of California users.” The company went on to say, “The testing process involves removing links to California news websites, potentially covered by CJPA, to measure the impact of the legislation on our product experience.”

Does this sound familiar?

Google has been involved in situations like these a few times over the years. In 2020, Australia introduced the News Media Bargaining Code. This is a piece of legislation that would force Google to pay the journalists whose links it uses. As a reaction, Google threatened to pull out of the continent altogether.

Then, last year, Google had a similar tiff with Canada. The country passed a new bill that mandates big companies to pay news outlets. What did Google do as a response? You guessed it! It threatened to stop showing news articles in Canada.

One of the hardest-hit countries was Spain. Back in 2014, the Spanish government wanted Google to compensate journalists for using their links on its site. However, instead of coming to any sort of agreement, Google pulled out of the country for six years! It only brought Google News back into the country in 2022.

Now, Google is planning on doing this in the States, and even in its home state of California. While the company eventually struck deals in Spain, Australia, and Canada (it agreed to pay $100 million CAD each year in Canada), this highlights a major issue with the company.

Now, journalists in California are at stake

In a recent blog post, the company explains how the CJPA could harm journalism in the state of California. It explains that the act would “favor media conglomerates and hedge funds—who’ve been lobbying for this bill—and could use funds from CJPA to continue to buy up local California newspapers, strip them of journalists, and create more ghost papers that operate with a skeleton crew to produce only low-cost, and often low-quality, content.”

However, who’s to say that this will happen? We can’t say, for certain that these events will transpire, but what we can say is that pulling links to California-based sites will have a detrimental effect on the journalism industry as a whole. It’s simple cause and effect. These sites depend on Google for a massive chunk of their ad revenue. Pulling out would mean that these sites will lose a significant amount of money.

When Meta pulled out of Canada, news outlets saw devastating results. During 2023, 36 news organizations shut down. The company has since struck a deal with the Canadian government to return to the country. However, this can’t undo the damage already done; people lost their jobs and doors had to be shut for good. While both sides admitted fault in this situation, it doesn’t undo what happened.

That’s Meta, we’re talking about; we’re sure that Google’s influence is exponentially greater. So, if Google pulls news from California, it will have a more direct and immediate effect on the industry than the scenario it explained in its blog post.

Google’s not just pulling news links

As if this situation didn’t shine a harsh enough light on Google, the company is also doing more to hinder the California news industry in light of this bill. Along with pulling news links from California-based sites, the company is also threatening to halt investments in the Google News Initiative. This is the program that would provide smaller news sites with AI tools and funding.

So, Google’s method of helping journalism is hurting it. As much as the company is saying that it wants to help journalism, it is showing no signs of actually wanting to do so. What it’s doing is throwing its weight around to put a choke hold on the California news industry. It’s cutting off an extremely valuable resource from sites that rely on it just so that it doesn’t have to pay more money each year. This is an almost $2 trillion company we’re talking about.

The next best thing isn’t good enough

Google isn’t the only search engine in town. Its closest competition is Bing. However, as large as it is, the Microsoft-owned search engine is miles behind Google; light years behind, in fact.

According to a report from Similar Web, Bing gained 1.4 billion visits in March 2024. Google, on the other hand, pulled in 85.5 billion visits during the same time. Doing some rough math, that means that Bing received about 98.4% fewer visits than Google.

All of the same sites will be viewable on Bing, but there will be substantially fewer visits. So, this means that ad revenue will take a massive dip for companies relying on Bing.

That’s not the worst part. Those numbers are just for visits overall. We can assume that the majority of people reading California-based news sites are Americans. Well, the same report states that only 24.13% of that traffic was from America. China took the commanding share with 31.84%.

On average, according to the report, people who visited Bing were more interested in Programming and Developer Software. In second place was Computer Electronics and Technology. After that, there was News. So, a very small portion of the people visiting Bing are interested in news.

Bear in mind that this pertains to the number of visitors in March 2024. Be that as it may, whether it’s March 2024, March 2023, or any other year, Google has a commanding hold on the search engine market. So, heading over to other search engines just isn’t sustainable. It’s either sink or swim with Google.

If Google doesn’t pay with money, journalists will pay with a lot more

The main issue with this is the fact that, in trying to send a message to the California government, Google is going to cost numerous people their jobs. The company needs to come to some sort of agreement that won’t result in this outcome. However, it’s showing that it doesn’t care about journalists or their jobs.

In its blog post, it mentioned that the CJPA would only benefit large organizations over smaller ones. Well, cutting off publishers in California will hurt all publications despite their sizes. Google search results generally favor larger companies anyway, so they’re already benefiting more from Google as it is. So, Google’s argument has holes in it.

Google and the California government need to come to some sort of agreement that doesn’t lead to the destruction of countless jobs. This is a Cold War that will have more casualties than either side anticipated. California journalism will be extremely hindered by this situation.

This isn’t just about the jobs. When Meta removed its platforms from Canada, what should happen immediately after? Wildfires. Well, with Meta’s services gone in that area, many people didn’t have proper news on the spread of the wildfires. The flow of information was hindered during a life-threatening event, and that made the squabble between the Canadian government and Meta look small in comparison. However, it continued despite what the people wanted.

Removing links to California sites will basically isolate the state from communicating with the rest of the country. News wouldn’t be able to get out of the state efficiently, and relevant events wouldn’t get coverage.

We also have to think about the possibility of other states adopting their own bills. Is Google going to cut off news links to those states as well? We need BOTH parties to come to their senses and work something out. There’s much more at stake than money.

Bills like these are necessary because of Google’s other passion: AI

When talking about Google and journalism, we can’t skip over the elephant in the room. Ever since ChatGPT exploded onto the scene in November 2022, Google has been making AI its #1 priority. One of the tools that the company unveiled is called SGE (Search generative experience).

This is a service that turns Google search into a chatbot. When you search for something, the company will generate the answer for you based on information it’s gathered from the internet. As you can imagine, this is a devastating tool for journalists along with other folks who rely on Google for traffic. Why should you visit a site teaching you about how to handle a teething baby when you have the answer given to you?

This is a tool that’s in testing at the moment, so only a limited number of people have access to it now. However, when it launches to the public, we expect the effects to be massive. Having the ability to forego sites (skipping their ads) and getting answers served to you on a silver platter will result in more companies seeing losses.

According to a report from Athoritas, Google SGE can push the top organic search result down as many as 1,732 pixels. This number will vary, but the report states that it averages at about 1,255 pixels based on the research sample group.

So, if Google is going to launch this feature to the masses, then it should, rightfully, pay the journalists (and other companies) some sort of compensation. This is a tool that we did not ask for, but there’s nothing we can do about it because the biggest ad company is bringing it about. Sites are going to lose traffic regardless, and we don’t know what Google plans to do about it.

The company should tread lightly

We all know that Google has done its fair share of shady practices in the past, but this one could be pretty substantial. If the company impacts journalism in this way, it could lead to some major negative publicity.

Journalists, of course, won’t be happy with this. Also, we have to remember that this is an election year. If the company bottlenecks California news, then it will disrupt the flow of information in and out of the state during such a crucial year. These are the things that the company needs to think about before making such a drastic move.

It’s already going through a massive antitrust lawsuit because of practices like these. There’s no telling what kind of outcomes this will have for the company.

The ball’s in your court, Google

Is Google getting too big? This is an important question to ask any major company, but it’s especially important to ask of a company that has entire industries cornered. Companies comply with regulations when they feel like they’ll lose money or power. So, what does a company do when it’s so big that it has nothing to lose? It pulls a Google.

Right now, there’s very little that journalists can do about this situation. Google is going to do what it wants, and it won’t stop until there’s some earth-shattering class-action lawsuit filed months down the line. At that point, the damage would have already been done.

It’s up to Google to decide what’s going to be best for the people who depend on it. Is the company going to cut off new links to California sites and launch SGE? If so, then Google would be instrumental in putting the final nail in the coffin of journalism. We just need the company to come to its senses and start thinking about the journalists.

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