Google introduces online payment system
POSTED: Wednesday, February 16, 2011 - 6:32pm
UPDATED: Wednesday, February 16, 2011 - 6:33pm
BERLIN (AP) -- Google Inc. is undercutting rival Apple Inc. with an online payment system that lets publishers keep more of the fees charged for reading their digital editions.
Google CEO Eric Schmidt unveiled the one-stop payment service, called One Pass, at Berlin's Humboldt University on Wednesday. Three German publishers, including the nation's leading Axel Springer AG, already have signed up.
Besides Germany, One Pass is available to publishers in Canada, France, Italy, the U.K. and the U.S. Google said Media General Inc., publisher of the Richmond Times-Dispatch, and Rust Communications, owner of the Southeast Missourian, plan to use One Pass.
The announcement came a day after Apple rolled out a long-awaited subscription service for applications designed for its iPhone and iPad. Apple is demanding a 30 percent cut of all subscriptions sold on those mobile apps while Google is charging 10 percent.
"We aren't in this to make money. Google makes money in other ways," Schmidt said. "We are trying to get money to people who are producing high-quality content."
Google makes most of its money from digital ads, including some that appear alongside online stories from newspapers and magazines.
The strategy has turned Google into one of the world's most profitable companies, fostering resentment among some publishers, which believe the Internet search engine has prospered by showing excerpts of newspaper and magazine stories.
Most of the Web content has been given away during the past 15 years, but more publishers already have started or are planning to impose fees to access content digitally.
Google's one-stop payment service is similar to one that debuted last year from a group led by Steve Brill, founder of Court TV and American Lawyer.
Google will give publishers some of the personal information that it collects about their subscribers. By contrast, Apple isn't sharing that data with publishers unless subscribers give their explicit approval. Publishers say they need to know who their readers are to help sell advertising and for other marketing purposes.
Schmidt also announced that Google was funding a Berlin-based institute in conjunction with Humboldt University. It would examine the evolution of the Internet and its impact on society.
Google has clashed repeatedly with German authorities over data privacy issues and been forced to tweak some of its services to satisfy strict regulations here.
Schmidt underlined the importance of allowing users the "choice" of how much private information they want to share and stressed the importance of the new foundation as a place to discuss such issues.
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