Google’s $250M deal to support California newsrooms

Google has entered a $250 million deal with the state of California to support local newsrooms, which have been struggling with widespread layoffs and declining revenues. The decision comes in the wake of proposed legislation that would have required tech companies to pay news providers when they run ads alongside news content. By securing this deal, Google has managed to sidestep such bills.

The Media Guild of the West, a local journalism union, has criticised the deal, calling it a ‘shakedown’ that fails to address the real issues plaguing the industry. They argue that the deal’s financial commitments are minimal compared to the wealth tech giants have allegedly ‘stolen’ from newsrooms.

The deal includes the creation of the News Transformation Fund, supported by Google and taxpayers, which will distribute funds to news organisations in California over five years. Additionally, the National AI Innovation Accelerator, funded by Google, will support various industries, including journalism, by exploring the use of AI in their work.

While some, including California Governor Gavin Newsom, have praised the initiative, others remain sceptical. Critics argue that the deal needs to be revised, pointing out that only Google contributes financially, with other tech giants like Meta and Amazon absent from the agreement.

The news industry’s challenges are significant, with California seeing a sharp decline in publishers and journalists over the past two decades. Big Tech’s dominance in the advertising market and its impact on publisher traffic have exacerbated these challenges, leading to calls for more robust solutions to sustain local journalism.