What Do News Aggregators Do? Evidence from Google News in Spain and Germany

43 Pages Posted: 13 Sep 2016 Last revised: 17 Oct 2017

Joan Calzada

University of Barcelona - Department of Political Economics

Ricard Gil

Queen's University (Canada) - Smith School of Business; Johns Hopkins University - Carey Business School

Date Written: June 20, 2017

Abstract

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-in-differences methodology, this paper empirically examines the relevance of these two effects. We show the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets by 14%, and that this effect was larger in outlets with less overall daily visits and a lower share of international visitors. We also find some evidence suggesting that the shutdown decreased online advertisement revenues for larger online news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results demonstrate the existence of a market-expansion effect through which news aggregators increase consumers’ awareness of news outlets’ contents, thereby increasing their number of visits.

Keywords: News Aggregator, Google, Engagement Metrics, Daily Visits, Market-Expansion Effect, Substitution Effect

JEL Classification: L86

Suggested Citation

Calzada, Joan and Gil, Ricard, What Do News Aggregators Do? Evidence from Google News in Spain and Germany (June 20, 2017). Available at SSRN: https://ssrn.com/abstract=2837553 or http://dx.doi.org/10.2139/ssrn.2837553

Joan Calzada

University of Barcelona - Department of Political Economics ( email )

Av. Diagonal, 696
Barcelona, 08034
Spain
+34 93 402 1933 (Phone)
+34 93 402 4573 (Fax)

Ricard Gil (Contact Author)

Queen's University (Canada) - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

HOME PAGE: http://carey.jhu.edu

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