Google offers $164M to improve Google News, relations with publishers

Google has announced a new initiative to play nice with news publishers and achieve two goals: to look better in the eyes of Europe and to improve news content.

At the center of this initiative is a 150 million euro ($164 million) grant, to be issued over three years, that will provide funds for "risk-taking" in digital journalism and ultimately drive better content to users.

"In the feedback we hear from publishers and editors, it is clear that there is a great desire to experiment more freely, but risk-taking comes at a cost," Google's Carlo D'Asaro Biondo said in a speech Tuesday at the FT Media Conference in London. "The purpose of this is to make grants available to projects which demonstrate new thinking in digital journalism. Anyone working on innovation in online news in Europe will be able to apply, including national and regional publishers, new players and pure players."

Biondo, Google's president of strategic partnerships in Europe, acknowledged that the company has been less than cooperative with the news industry in Europe and that, at times, readers have suffered as piqued publishers have removed content from the Google News aggregation site.

The company's new initiative reflects an attempt to fix the relationship between news publishers and Google, rather than continue a relationship fraught with discontent and cold shoulders. If all goes well, news publishers will continue to opt in to Google News and thus have their stories shared there. Google, meanwhile, said that it will work with publishers' newsrooms to enhance their offerings for an increasingly digital audience.

A new front in the Google News war

The $164 million for European publishers is a major departure from Google's previous posture. For years, Google and publishers have been facing off over Google News. Publishers have argued that the search giant has no right to aggregate news content and display headlines and short snippets from stories. They say that Google News steals readers, bites into their revenue and allows for Google to profit without any gain on their side.

Google has countered that its news offering is an important service to both publishers and readers, getting stories that might otherwise go little noticed in front of a potentially vast number of readers.

Indeed, many publishers across Europe have imposed boycotts on Google News, only to bring their content back before long to try to win back lost readers . While Google says that proves its service has merit, publishers say that their reliance on Google News is yet in fact a shortcoming.

In December, Google took a hard line in the News battle by announcing that it would disable the service in Spain. The decision was made after Spain announced a new copyright law that would have required Google to pay for the right to show publisher content.

In 2013, Germany similarly passed legislation that allowed publishers to charge search engines and aggregators for using any content beyond headlines. Google asked publishers to opt in to search and Google News without requiring a fee, and many obliged. German news giant Axel Springer attempted to keep its content off Google, but after just two weeks, gave Google access to some of its content when traffic to its sites plummeted.

Google warms up to the EU

The three-year grant could be viewed as the latest attempt by Google to improve relations with critics in Europe at a crucial time. The EU's competition commissioner, Margrethe Vestager, accused Google earlier this month of abusing its search dominance across Europe to promote its own services, with the potential for the company to incur a fine of up to $6.6 billion. The EU, if it determines Google is operating illegally, could also force the search company to change how it does business.

"Dominance as such is not a problem," Vestager said earlier this month. "However, dominant companies have a responsibility not to abuse their powerful market position by restricting competition either in markets where they're dominant or in neighboring markets." Vestager's office also announced that it would launch a thorough investigation into Android to determine whether Google's mobile operating system is another pain point for competition.

Although Google has denied allegations that it's abusing its power, the company has, over the last several weeks, been focusing much of its time and money on improving relations in Europe.

In February, Google announced that it has combined its two European units. Google said at the time that the move would help it provide better services to individual countries across Europe -- a major concern for critics who say Google is slow to respond to needed changes.

In addition to announcing the business unit combination, Google also argued in a blog post that it's "a growth engine for European businesses." The blog post, a thinly veiled attempt to win favor, argued that Google has helped a wide range of businesses and paid out over 4.4 billion euros to European developers in 2014. Google also said that it will train 1 million Europeans by 2016 "in crucial digital skills" and will also invest 25 million euros to expand its current business-focused programs to other parts of Europe.

The $164 million grant to European publishers appears to be another olive branch, but will also potentially improve how European users consume content.

The company also announced on Tuesday that it will develop a publishers working group to help content creators increase their revenue and audience size. Google said that it has also developed a News Lab team that will educate newsrooms across Europe on how people are consuming news on the Internet.

"I am convinced we will achieve much more if journalism and technology work together rather than apart," Biondo said after announcing the initiatives.

Google declined additional comment.