Google Australia and New Zealand managing director (Image: Supplied)

Big tech is on a cancel binge. Now, the biggest of big tech, Google, seems to be seriously thinking of cancelling Australia through pulling all or part of its search engine from the country.

It’s looking increasingly likely. The overnight news that Google is experimenting to see how its users behave when links to commercial news are buried deep in search results comes on top of a steady ramping up of the company’s rhetoric about the unworkability of the federal government’s proposed mandatary news bargaining code.

When the government released draft legislation to give affect to the code in December, it looked like the fight between established media and new tech would be sorted through global talks between players like News Corp and The Guardian on the one hand and Google and Facebook on the other.

Now? Maybe. Maybe not. Google’s rhetoric suggests it might be struggling to sell Australia’s news media on its offer to pay to publish stories in News Showcase. Publishers want to be paid for links in the search engine itself.

That could take Google to Plan B: abandoning all or part of the Australian search market.

The news about Google’s experiments has shaken up old media: “A chilling illustration of their extraordinary market power,” said Nine, quoted by the Nine mastheads. Sure, isn’t that the point?

The experiment goes to the heart of the argument between old media and big tech: are search links to news essential to draw users to the search engine (as old media claims) or do the links benefit news media by pushing readers into news sites (as Google claims)?

In economic terms Google wants to work out the value exchange. It says it delivered $218 million in subscribers and advertising to publishers in 2018. It will be using this experiment as a control to give it two talking points: will users miss news links when they’re gone? And can old media afford to sacrifice the traffic that Google delivers them?

Facebook is ahead of them. It’s already declared it’s cancelling news in Australia, saying that, if the code goes ahead, it will stop Australians posting news in their News Feed. Easier for them. It adjusted its algorithm back in 2018 to prioritise family and friends over news posts.

Google’s Australia revenue last year was about $4.8 billion. It will be balancing how much money it might lose by restricting search in Australia against the cost of meeting old media’s demands — not just in Australia but everywhere else it operates.

Not all Google products are affected by the proposed code. About a quarter of its income comes from its ad tech services that place display ads on web pages, advertising on YouTube and sales of business services around its Gmail offering. 

Even without news, a restricted Google search engine would remain the default for most Australians who use Android phones and Google Chrome. Google also pays Apple about $10 billion to have its search the default option in iOS. It knows user inertia is a powerful tool. 

It could use Australia as a bigger experiment, pivoting its search engine to where the money is, as an online directory of services. For those old enough, think Yellow Pages for the web. They could trial going head to head against old media’s digital classified offerings like News Corp’s and Nine’s Domain.

The current experiment will be giving them the pointers they need. How much traffic (and, most importantly) how much advertising would this model draw? If free links are found to be essential to draw traffic, how many would they need?

It will provide the ultimate answer to the question posed by the mandatory code. Who needs the other more: old media or big tech?

What impact would losing local news links in Google search results have? Let us know your thoughts by writing to [email protected]. Please include your full name to be considered for publication in Crikey’s Your Say column.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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