Google will spend $1 billion to pay publishers for news showcase

"Our approach with Google News Showcase is a very different approach for Google from a product standpoint ... It's a new way for us to connect users to stories that matter. It's a new way for us to work with publishers, but to also make money from their content beyond beyond Search and News. And of course, it's a new way for Google to support the future of quality journalism."

Details: The Google News Showcase, launching first in Brazil and Germany, includes a new set of features that Google hopes will help guide readers to higher-quality information and boost traffic to participating publishers' websites.

• The biggest feature in the Showcase is "panels," seen in the image above, which allow publishers to package stories with greater context than they can provide now when their stories appear on Google.
• Publishers can include elements like timelines, bullets and related articles within one story panel. Eventually, they'll be able to embed video, audio and daily briefings.
• The showcase, initially launching on Android and soon iOS, will first appear within Google News and eventually also in Discover and Search.
• As part of this effort, Google says it will offer free access to select paywalled articles on some participating publishers' sites, with the idea being that the extra exposure will one day help publishers convert those visitors to subscribers.

Be smart: The effort is Google's biggest commitment to editorial curation to date. While the giant has made efforts recently to elevate quality reporting in its algorithms, most of those ranking decisions are made absent of human judgement.

• The new Showcase product is different from Google Search or News because it relies more heavily on the editorial choices of individual publishers. Panels will still be surfaced by the same algorithms used to rank content in Google News or Search, but within them publishers will be curating what's featured.
• Bender says it's selecting publishers on a country by county basis. "We need to have enough of a critical mass of publisher content to be able to launch in a country," he says. From there, it will prioritize publishers that have established audiences and serve a community, like local news publishers and print newspapers.

Between the lines: The panels are also designed to promote a publisher’s brand within Google’s products to help readers recognize the value and perspective of those publishers.

• Publishers have often complained that platforms like Google don't just steal their revenue but minimize their brands. The panels link to the publishers' sites, where publishers can fully monetize the traffic. Google says it will share anonymized data with publishers about performance.
• Leaning on learnings from its rivals, Google will also allow users to personalize feeds within the Google Showcase, so that they can follow specific publishers.

Publishers so far seem pleased with the product. "[W]e hope this partnership could be an important push to expand the magazine's digital presence," says says José Roberto de Toledo, executive-editor at piauí magazine in Brazil.

• "On one hand, we are using the revenue from the project to increase our production (more articles per day); on the other, the showcase give us a tool to display what we think is more relevant, to make connections between different stories and, luckily, attract more readers. It feels like we are getting back some power from the algorithm to the journalism."

The big picture: Regulators around the world have been pushing to introduce legislation that would require tech giants like Google and rival Facebook to pay publishers directly for their work.

• Google and other tech giants have made billions of dollars from advertising in recent years. Unable to compete, news publishers have had to look for alternatives to advertising revenue to survive.
• Google has for years resisted the idea of paying publishers, and has even threatened to pull Google News out of Europe should the EU impose broad policies around the issue. But it has lately warmed towards paying publishers, at least when it is able to do so on its own terms.
• A new report from Bloomberg suggests that Google is on the verge of striking an agreement with Australian regulators. It's unclear whether this new investment has resulted in that agreement. Google says it has paused its work with publishers in Australia for now, so they are not part of the experimentation around this product, although they are still getting paid.

What's next: While the product is initially launching in Brazil and Germany, Google says it's signed deals with more than 200 publishers in Germany, Brazil, Argentina, Canada, the U.K. and Australia. Presumably, the product will soon launch in those countries and more.

Go deeper: Google will start paying publishers to license content