Google News Is Worth $100MM? How?!

According the CNN Big Tech blog, that’s the nine-digit figure Marissa Mayer, who heads search products and user experience at google, “threw out during a Tuesday lunch session at Fortune’s Brainstorm Tech conference in Half Moon Bay, Calif.”

The World Association of Newspapers quoted the figure in a press release, in which it wrote, “The Google-Yahoo deal would spell the end of” Google’s competitors’ ability to place constraints on its power, “thereby further weakening the viability and economic independence of the world’s newspapers. We must speak out now and urge regulators to block this anti-competitive deal.” Pretty harsh stuff, although the American Association of Newspapers took no position.

More from CNN: “How does she put a value on a product that doesn’t directly make money? The online giant figures that Google News funnels readers over to the main Google search engine, where they do searches that do produce ads. And that’s a nice business. Think of Google News as a $100 million search referral machine.

I wonder how they measure such indirect revenue. Let’s assume away the possibility that Mayer is talking about the kind of extremely attenuated referral in which “omnigoogle,” to use Nick carr’s nice term, simply ends up inevitably taking “a cut of many of the dollars that flow through the Net economy.” Why? Because, although it’s probably correct that google does make some amount of money as a result of google news according to this logic of complementarity and network effects, it would see highly strange to pin such a concrete number on it.

What’s left? Well, as far as I can tell, there’s no clicking through to a search page on which there are ads. Users go straight from google news to the destination site.

There may well be google ads on those destination pages. But users may have landed at those destination pages and clicked those ads anyhow, without the google news middle man. Seems ripe for double-counting.

The only way there’s no double-counting, in fact, is if we assume that users would not have ended up at the destination sites without google news in the middle. In order for Mayer to avoid double-counting and make any sense, in other words, she must be describing a scenario in which google news makes it more likely that users see destination sites with google ads than those with none.

But, um, pay-for-play news would obvi be a BIG PROBLEM.

So what is this mysterious “$100 million searh referral machine”? Any ideas?

PS. It’s not actually clear that Mayer intended to mean that google news is worth $100mm. If she meant that it produces yearly revenues of that amount, for instance, it could be worth a lot more.

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