Google planning micropayments for online news

Chris Caceres · September 10, 2009 · Short URL:

Lookout, we may all have to start shelling out a few pennies to read digital news

It's no doubt the news industry has been suffering largely in part due to the recession and lack of ad dollars, but also due to society changing the way it consumes news, by reading online, and now on their mobile devices, for free.  According to a report published by the NAA earlier this year, print and online ad revenues dropped $7.5 billion from 2007.

Google has coined up an interesting micropayments plan to help newspapers looking to charge for all those free digital articles we're consuming on a daily basis across the web.  

The document titled "Google's Proposed Micropayments System" is a response to the NAA, in which it is now actively seeking a way to help online publishers additionally monetize digital content.  The ad revenue just isn't doing it.  

"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," explained Google in its document.  

"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."

Basically, people who aren't thouroughly opposed to this sort of idea Google is presenting, which conflicts with its idea of an "open web,"  will be offered subscription type billing.  Ideally, they can subscribe to certain newspapers and read any of those articles and if they want to read other articles outside of their subscriptions, they'll be charged a few pennies or so, thus the teeny tiny micropayments.  

Paying for these digital goods is planned to go through Google Checkout, which already has tens of millions of buyers signed up in more than 140 countries.  Google says in total, billions of dollars of purchases have been made through Google Checkout - proving the platform will actually work.

This sort of model sounds ideal for publishers looking to get out premium content, like interviews with important figures.  But for those looking to charge for simple news such as articles published over a hundred times by on the same subject by multiple sources, pretty pointless.

If Google can get this plan underway, it'll be competing with venture backed startup Journalism Online, which has proposed a similar plan and signed up already more than 500 newspapers.

Checkout Google's full statement here.

Google's Proposed Micropayments System

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