ANALYSIS – Google partners brace for success as search giant threatens Australia’s exit

The threat of Google shutting down its search engine in Australia due to a content licensing bill would spread to all sectors, forcing partners like Apple with a sudden revenue gap and various retailers such as affordable Kmart up to exclusive David Jones with a supply of potentially useless gadgets.

The company owned by Alphabet Inc last month said it will likely retire its main search feature from Australia if the government carries out a plan to request it e Facebook Inc to pay media companies an indeterminate fee for snippets of news shown on their services. Google and Facebook they are fighting the first-of-its-kind “Media Bargaining Code,” while other countries consider similar efforts to help publishers who have lost ad sales to tech companies. As a sign of the potential Australian effort to shake up the industry, Microsoft Corp, whose search engine Bing will benefit from any Google withdrawal – Thursday asked the US to adopt a similar law.

Australian lawmakers have said the law is needed to help media companies stay afloat and will therefore continue to lobby despite the threat, which Google formalized last week in a securities filing which claims forced bargaining “it may involve our need to modify or withdraw products and services”. Final approval of the legislation could come as early as next week. Google is launching its own payment program with terms it can control better, and last month reached an agreement with major publishers in France and with Reuters.

In Australia, Google’s users, advertisers and business partners have started to worry about losing Google, which holds a 94% share of the country’s search market. The interconnected nature of Google products means that devices including Android phones, Chromebook laptops, and Nest smart speakers could be damaged without research. “If Google’s search function no longer exists in Australia, that will remove a lot of the features I use on Google Nest,” said Margaret Morgan, screenwriter. from Sydney who keeps a speaker in most of the rooms in her house and owns a Google Pixel smartphone.

Google declined to comment on this story. The company said being able to link to other websites for free is essential for research and many other free services that benefit Australians. REASON FOR CONCERN

The many companies that in one way or another are paid from Google search revenue also has cause for concern. Apple Inc, for example, receives billions of dollars globally to set Google as the default search program on iPhone, the Safari web browser and voice assistant Siri, US antitrust authorities said. Browser makers, including Mozilla and Opera, get a revenue share from Google, as well as internet operators in Australia such as iinet of TPG Telecom Ltd, Optus of Singapore Telecommunications Ltd and Telstra Corp.

The various partners did not respond to requests for comment or refused to comment. The exact terms of these agreements could not be learned, but estimates based on publicly available information showed that half a billion dollars or more could be at stake.

Total search ad revenue in Australia is set at around $ 3 billion for 2021 by researcher eMarketer, with almost everything going to Google. The company paid about 22% of its global advertising revenue to research and other partners last year, according to its financial statements. In the UK, with around 2-1 / 2 times the population of Australia, Google spent $ 1.5 billion to become the default search engine on a variety of devices in 2019.

GADGET HIT Australian electronics chains such as JB Hi-Fi Ltd, Harvey Norman Holdings Ltd and Officeworks owned by Wesfarmers Ltd could also take a hit because they sell gadgets with the Google search engine built in. The same goes for department store chains such as Wesfarmers’ Kmart, Woolworths Group Ltd’s Big W and David Jones, owned by unrelated Woolworths Holdings Ltd. in South Africa.

Although Pixel phones only hold 2% of the Australian smartphone market, Nest speakers dominate with a 61% share, or 1.6 million households. Nearly one million Australians out of a population of 25 million use five or more Google-owned services, technology analyst firm Telsyte said. Search is “central to Google’s business model across all of its products,” said Foad Fadaghi, chief executive of Telsyte.

Retailers have started looking for reassurance from Google about the functionality of its products if the search disappears, even if no one has canceled or returned orders, two people with knowledge of the communications told Reuters. Google also has smaller search partnerships. Software vendors Hey You and Redcat allow restaurants to request orders via buttons accompanying search results, and the Australian Football League has allowed fans to vote for prizes via search.

Redcat’s director of sales and marketing, Lawrence Pelletier, said the one-year-old search integration generates 15,000 orders per month, mostly from new customers. “Would it be paralyzing if Google left? No. Would it be frustrating? Yes,” said Pelletier.

Hey You, CEO Uzair Moosa said he is exploring alternatives, but Google’s biggest search rival, Bing, doesn’t offer a comparable tool. Catherine Rowlands, a nurse from Sydney with a Pixel phone, told Reuters he feared what would happen.

“My phone without Google,” he said, “might as well be an old Nokia or something that just makes phone calls.”

(This story was not edited by our team of editors and is generated from a feed.)

News Highlights:

  • The threat of Google shutting down its search engine in Australia due to a content licensing bill would spread to all sectors, forcing partners like Apple with a sudden revenue gap and various retailers such as affordable Kmart up to exclusive David Jones with a supply of potentially useless gadgets. The company owned by Alphabet Inc last month said it would likely retire its main search function from Australia if the government carries out a plan to request it e Facebook Inc to pay media companies an indeterminate fee for snippets of news shown on their services.
  • ANALYSIS – Google partners brace for success as search giant threatens Australia’s exit