Google Woos App Publishers

March 1st, 2011 08:59

Google Inc. undercut the recent app subscription model offered by Apple Inc., opening a payment system for digital content that will allow publishers retain a bigger share of revenues than from the rival service launched by Apple earlier.

Google’s new One Pass service is designed to allow consumers to pay for access to multiple publications on the Web and across a range of mobile platforms. It also gives content owners greater control of customer data.

The initiative follows Apple’s new subscription service for content sold through its iPhone and iPad devices, an offering that upset some publishers. Apple would collect a 30% revenue share on sales of subscriptions in its iTunes App Store.

Google explained that its rival One Pass service will charge Android content publishers 10% of revenue from sales; give them the freedom to establish prices and give them more control over customer data.

“The publisher is the merchant of record,” said Google Chief Executive Eric Schmidt in Berlin on Wednesday. “We don’t prevent you from knowing, if you’re a publisher, who your customers are, like some other people do,” he said, a tacit reference to Apple.

Mr. Schmidt added that Google’s “intention is for publishers to make all the money.” The 10% fee "roughly covers our costs,” he said.

Google’s move will intensify the rivalry between the two Silicon Valley giants in the booming market for smartphones, tablets and other devices. Apple has dominated the high-end of the market with its iPad and iPhone, but devices that operate on Google’s Android operating system have gained market share in terms of global quarterly shipments.

In an interview, Madhav Chinnappa, Google’s head of news partnerships for Europe, Middle East and Africa, said Wednesday’s move had been planned for weeks and it was a “coincidence of timing” that the news came a day after Apple’s news.