Google will help French news organizations increase their online advertising revenue and also set up a (EURO)60 million ($82 million) fund to finance digital publishing innovation, settling a dispute over whether the Internet giant should pay to display news content in its search results.
The agreement, announced Friday by the French government and Google, will give the news organizations access to advertising platforms on the Internet search leader.
European publishers losing money and readers had asked governments in France, Germany and Italy to make Google pay. The company threatened to stop indexing European news sites, if it was charged for the content.
The company said that Friday's settlement means it does not have to pay for "snippets" of news content that appear on a Google search page. France had appointed a mediator to lead negotiations with French publishers and they called the agreement a "happy conclusion."
Google Executive Chairman Eric Schmidt was present at the Elysee Palace with President Francois Hollande to sign the deal after what the president's office said were "intense negotiations."
"Our search engine generates billions of clicks each month, and our advertising solutions - in which we have invested billions of dollars - help them make money from that traffic," Schmidt said of the deal on the Google Blog.
The commercial agreement will allow media organizations to profit from Google advertising platforms, including AdSense and AdMob for mobile phones. Google sends some 6 billion clicks per month to publishers around the world representing a big money-making potential by selling advertising next to it and drawing in new readers. Clicking on the ads generates revenue that would be shared. It was not immediately clear how the revenue would be split, but most was expected to go to the French publishers.
The growth of search engines as a way to find information has affected news organizations around the globe, and France is among countries seeking to protect its own media organizations and what they produce.
In October, Hollande discussed with Schmidt a possible plan for a new tax that would make search engines pay each time they use content from French media. That's something Google was determined to avoid, and it threatened to bar French websites from its search results if the tax was imposed.
Google, based in Mountain View, California, has been under pressure from news organizations in Europe feeling the heat from the Internet giant's reach that sweeps through their own products gathering up content "snippets" for free. Under the arrangement, those snippets will remain free.
Germany is considering a similar law, and Italian editors have indicated they would favor such a plan. Whether the French deal could serve as a model elsewhere remains to be seen.
In December, Google ended a six-year dispute with a group of French-language newspapers in Belgium, reaching agreement on a business deal that turns on advertizing like in France. The publishers had said Google had no right to post links to their articles on Google News without payment or permission and won in court. The parties later agreed to promote each other's services by placing Google advertising in publishers' media.
The Digital Publishing Innovation Fund is aimed at helping the transformation to digital publishing by supporting work on new projects to help publishers go digital.
Google Inc. has had scrapes with the French on other practices, including Street View, its mapping service. Google acknowledged that vehicles taking photographs for the mapping service in several European countries also collected data from unencrypted wireless networks.
In 2011, France's privacy authorities fined Google (EURO)100,000 ($145,800 at the time) for collecting personal data from WiFi networks - including emails, web browsing histories and online banking details - from 2007 to 2010.