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9/9/2009
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Google Plans Micropayments To Save Newspapers

The company isn't ready to announce anything, but it has told a newspaper industry group that micropayments are coming.

Google is developing a micropayment scheme to allow users to buy digital content through its Checkout online payment system.

The Google project, first reported by the Nieman Journalism Lab, was disclosed in Google's response to a June solicitation from the the Newspaper Association of America (NAA) to come up with ways to help online publishers monetize digital content more effectively.

"While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year," Google explains in its letter to the NAA. "The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time. Google will mitigate the risk of non-payment by assigning credit limits based on past purchasing behavior and having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud. Merchant integration will be extremely simple."

Google, however, is characterizing "within the next year" as something less than certain. "The Newspaper Association of America asked Google to submit some ideas for how its members could use technology to generate more revenue from their digital content, and we shared some of those ideas in this proposal," a Google spokesperson said via e-mail. "It's consistent with Google's effort to help publishers reach bigger audiences, better engage their readers and make more money. We have always said that publishers have full control over their content. If they decide to charge for it, we'll work with them to ensure that their content can be easily discovered if they want it to be. As for Checkout, we don't have any specific new services to announce but we're always looking for ways to make payments online more efficient and user-friendly."

It's worth noting that Google's proposal is one among many sent to the NAA, which also received proposals from Microsoft, IBM, Oracle, and other companies.

As is the nature of such proposals, the companies pitching the potential of their technology tend to speak in possibilities rather than promises.

Microsoft, for example, describes the newspaper of tomorrow thus: "The Next-Generation Newspaper is the user's information hub, aggregating content from different sources and matching it to the user's profile, preferences, and context (situation). It is accessible from any device, both online and offline, and helps the user to navigate the content universe through search, links, and recommendations. Content and audiences are monetized through pay-for-content and advertising. This vision is mapped onto a stack of products, services, and technologies which are available from Microsoft today and can be used to implement this vision."

Google may well bring a micropayment system to market, but it remains to be seen whether anything other than the top-tier news organizations will be able to charge consumers for content. Where such a system would likely see more traction is in the sale of content through Google Books. Google has said it plans to begin working with publishers and authors to sell e-books toward the end of the year.

The scope of Google Books will depend in part on whether a New York judge accepts Google's controversial $125 million proposal to settle a lawsuit over the company's book scanning project.

In May, testifying before the Senate Subcommittee on Communications, Technology, and the Internet in a hearing about the dismal financial state of the newspaper industry, Google's VP of search products and user experience, Marissa Mayer, made it clear that Google supports publishers through online traffic referral and advertising revenue. She did so in part because some in the newspaper industry blame Google or the Internet for their declining fortunes. But she made no mention of her company's interest in providing a micropayment infrastructure to assist publishers seeking to charge for content. Rather she suggested that the future of news publishing might look more like Wikipedia or Knol entries, which grow longer and gain search relevance over time, rather than disposable articles created anew every day.


InformationWeek has published an in-depth report on Google's upcoming Chrome OS. Download the report here (registration required).

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