Business Software

Google Plans to Offer Micropayments Service to Media Owners

Google is promoting a payments system to the newspaper industry that would let Web surfers pay a small amount for individual news stories, an idea that could help publishers struggling with the impact of the Internet.

The plans were revealed in a document Google submitted to the Newspaper Association of America (NAA), which had solicited ideas for how to monetize content online, something some publishers have had difficulty with.

In the next year, Google plans to launch a "micropayments" feature as part of its Checkout online payments service, it said in the document. The system could allow consumers to buy a package subscription to several publications and then pay for other stories on an a la carte basis. In a separate statement, Google said on Thursday it had no specific products to announce. But in a separate statement on Thursday, Google said it had no specific products to announce yet.

"The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants," Google said in the document.

Checkout isn't quite fully baked yet for the publishing industry. "Managing subscriptions from the merchant side is fairly rudimentary right now but could be improved to be more relevant for news and media companies," Google said.

Google also has ideas for how its search engine can be modified to deal with content behind a pay wall. One of those issues is ensuring that for-sale content is indexed so users can find it but also doesn't give it away.

A search engine should be able to know if the reader has a subscription. If so, "the full content should be available and exposed within one click from the search results page." If not, a reader will see a preview of it, how much the story costs and then have the option to buy it, Google said.

The a la carte system will likely work best with special content, such as exclusive interviews and enterprise reporting, as users are "unlikely" to pay for basic news reporting covered by multiple sources, Google said. Publishers can entice readers by offering one premium story for free.

Google Checkout, which competes with eBay's PayPal service, stores a user's payment information. Users would be able to use a login and password to use Checkout at multiple vendors, a "single sign-on" system, the company said. A percentage of each sale would go to Google, which would cover maintenance, bandwidth, processing charges and profit.

Google also promoted its range of advertising and ad-serving products, such as its DoubleClick platform. "We believe the increased advertising opportunities will likely exceed total revenue from subscriptions," the document said.

Despite quarrels with Google over how it indexes and aggregates content, the publishing industry might do well to cooperate with the Internet giant.

The U.S. newspaper industry had it worst year since at least 1950, according to figures published in March by the NAA. Print and online advertising revenues plunged 16.6 percent to $37.8 billion, a $7.5 billion drop from 2007.

Overall, however, online advertising revenue has steadily climbed since 2002, according to the Interactive Advertising Bureau. In the U.S., Internet advertising revenues came in at $23.4 billion in 2008, about $2.2 billion or 10.6 percent more than 2007.

Google wasn't the only IT company to respond to the NAA's request for information. IBM, Microsoft, Oracle and others also replied with suggestions for how they could help publishers make money from content.

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