Brief:

• Google will pay publishers more than $1 billion in the next three years to license news articles for a new service called Google News Showcase. It will show teasers for stories from Google's news section in panels with images and summaries that publishers select, Sundar Pichai, CEO of Google and its parent company Alphabet, said in a blog post.

• Brazil and Germany are the first countries to see the news feature, and Google has signed partnerships with publishers in Argentina, Australia, the U.K. and Canada. Google will pay publishers to create and curate the stories that appear in Google News Showcase, which will be available in the Google News app for Android and iOS, and later added to Google Search.

• The company later plans to add video clips and audio briefings to the service. Google News Showcase could be an important way for the search giant to court favor with publishers that have long been critical of its outsized role in digital advertising. 

Insight:

The launch of Google News Showcase may help mend relationships with publishers that have accused the search giant of having outsized control over the digital advertising infrastructure. A key question is whether Google News Showcase will help to drive traffic to publisher websites that carry advertising or keep readers on Google's properties. 

Der Spiegel, Stern, Die Zeit, Folha de S.Paulo, Band and Infobae, El Litoral, GZH, WAZ and SooToday are among the more than 200 publications that have signed on to the project so far. Others remain skeptical. Google, for instance, can terminate its licensing agreements if a publishing partner is named in a complaint or legal claim against the company, multiple anonymous sources told Digiday.  

Google has been criticized for scraping different headlines and facts from publisher websites, giving readers enough of an idea about a topic to avoid actually clicking through to a publisher's site, as claimed in a white paper by the News Media Alliance, a nonprofit that represents more than 2,000 news organizations in the U.S. The group wants antitrust authorities to take steps to curb Google's possible abuse of market power, and seeks a U.S. law that would allow news providers to collectively bargain with Google. The Alphabet arm has also faced copyright battles with publishers in France, and a proposal in Australia to force the company and social network Facebook to pay publishers for content.

For mobile marketers, Google's plan to pay publishers for content might have a limited effect, at least initially. Google News doesn't have any advertising in its selection of news providers, while Google Search intersperses links to news sites in a fact box that appears within search results, typically below paid search listings. It's possible that Google could add advertising to its Google News Showcase panels to help monetize the service and offset the cost of publisher content.

Google is among several technology giants that have created news aggregation services, but received flak for their execution. Apple, whose Apple News app has 100 million users in the U.S. and is free to use, last year started a paid digital newsstand called Apple News+ that provides access to digital versions hundreds magazines and newspapers. The company this year announced that Apple News+ will be available in a bundle called Apple One that also will have music, video, gaming and virtual workouts. Facebook last year began paying news providers to show story summaries in Facebook News, which the social network started last year and expanded to more countries in August.