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Google is taking a friendlier approach to publishers with its discussions about possibly paying them a licensing fee for content, as The Wall Street Journal reportedlast week. The talks are said to be in the early stages, but they may help publishers create another source of revenue as they cope with declining ad sales.

The value of publisher content to Google has been hotly debated since last year. The News Media Alliance, a nonprofit that represents more than 2,000 newspapers in North America, argued that Google makes at least $4.7 billion a year from “crawling and scraping” their content. Google refuted the claim, which also was questioned by media analysts, executives and columnists.

It’s hard to imagine that publishers have much bargaining power with Google, given that it’s the most popular search engine in the world outside of China. Even if antitrust authorities manage to compel Google to undo its acquisitions of DoubleClick, YouTube and Android, the company will still dominate internet search.

It’s also important to understand the difference between Google Search and Google News, the two main avenues to publisher content from the search company.

Google Search is valuable to publishers, helping them to connect with online audiences. The key debate is whether Google helps or hurts traffic with search results. Google has said it drives 10 billion clicks to publishers’ websites and is providing an invaluable service.

Some publishers, especially in France, have argued the search results show too much copyrighted content from their websites. Instead of urging people to click through, Google gives readers just enough information to stay on its site, the argument goes.

In addition, Google News gathers headlines from publishers in one place, helping readers to find the latest headlines. Google doesn’t have advertising in Google News, which means there isn’t any revenue to share with publishers.<

However, as other companies like Apple, Facebook, News Corp and AT&T develop news aggregation services, the search giant has more competitors for user attention.

Facebook last year announced plans to share revenue with publishers, while Apple has a paid digital newsstand that also provides additional income. Google’s willingness to pay for publisher content is a welcomed development.

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Sourced from MediaPost