Google strikes three-year deal with News Corp

Google struck a three-year deal with the Murdoch family-owned media conglomerate News Corp., which includes ad revenue sharing and the development of a subscription platform on Wednesday.

It is one of the most extensive deals of its kind with big tech. The deal comes as proposed legislation in Australia threatens to jeopardize the tech platform’s future operations in the country. A joint statement called the deal a “historic multiyear partnership” that would see Google feature news from the media giant as part of the Google News Showcase.

The companies will develop a subscription platform, share advertising revenue through Google’s ad technology services, build out audio journalism and develop video journalism by YouTube. The deal comes after years of public feuding between Murdoch and Google, most recently in Australia, where Google has threatened to shut down its search engine to avoid “unworkable” content laws.

Under the three-year deal, News Corp. brands in the U.S., U.K. and Australia like The Wall Street Journal and New York Post will be featured in the Google News Showcase. The companies will enter into an ad revenue-sharing agreement, develop a subscription platform and YouTube will invest in video journalism as part of the deal, according to a press release. News Corp.’s stock popped on the news before settling later.

Google and News Corp. are unlikely bedfellows as the media giant has been a longtime critic of Google’s. News Corp. has pushed for regulators around the world to break up the company and scolded it for allegedly ripping off publishers.

News Corporation said it would be sharing its stories in exchange for “significant payments”.  Mr Murdoch has long called for Google and other internet platforms to pay media companies for their output. Amid mounting pressure from lawmakers in Australia and elsewhere, Google last year said it would start to pay some publishers for stories.

“This has been a passionate cause for our company for well over a decade and I am gratified that the terms of trade are changing, not just for News Corp, but for every publisher,” said Robert Thomson, News Corporation chief executive. The company owns The Sun, The Times, the Wall Street Journal, and the Australian, among other publications. “For many years, we were accused of tilting at tech windmills, but what was a solitary campaign, a quixotic quest, has become a movement, and both journalism and society will be enhanced,” Mr Thomson said.

Google last year said it would start licensing “high-quality content” from publishers around the world as part of a $1bn initiative. It has signed up hundreds of media outlets in Germany, Brazil and the UK, among others, to participate in its Google News Showcase programme.

The deal with News Corp comes just days before Australia is due to pass a law allowing it to appoint an arbitrator to set fees if Google or other platforms cannot come to terms with publishers on their own.

Google has threatened to cut its search engine in Australia over the plans. On Wednesday, Facebook said it would restrict news on its platform in the country. In his statement, Mr Thomson said: “particular thanks” was due to Australian politicians who backed the proposal.

Earlier this week, officials in Sydney said Google and Facebook were close to deals with major Australian media to pay for news. Australian Treasurer Josh Frydenberg said talks with Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai had made “great progress” in resolving a standoff being closely watched around the world. The companies have threatened to partially withdraw services from the country if the rules become law, sparking a war of words with Canberra. The agreements could be enough to see Facebook and Google avoid the most severe parts of the legislation — including binding arbitration to ensure they are not using their online advertising duopoly to dictate terms in deals with media companies.

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