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Google has chosen to walk away from its enterprise subscription to the Financial Times, among other media deals on the chopping block. These Google cost-cutting measures are part of a broader belt-tightening strategy, even though the company continues to post blockbuster financial results.
Why Google’s Cost-Cutting Measures Matter Beyond the Balance Sheet
It should be noted that since January, Google has been reducing expenses in various ways. Specifically, the tech giant cut 35% of managers overseeing tiny teams and rolled out voluntary exit programs across several divisions. Additionally, this development quietly signalled that more reductions could follow subsequently. According to the finance chief Anat Ashkenazi, who warned in 2024 that spending would be pushed “a little further.” She added that she’s keeping that promise. However, it’s beyond significant that for a company that reported $96.4 billion in revenue last quarter, the decision to save mere thousands on subscriptions sends a clear message about priorities.
Nonetheless, these Google cost-cutting measures are beyond mere numbers. They fall at a time when the company’s relationship with publishers is fraying. Interestingly, fresh data from Digital Content Next shows referral traffic from Google Search to publishers dropped 10% between May and June. In the same vein, non-news sites fell 14%. Some major outlets such as CNN, Business Insider, and HuffPost saw even steeper drops of up to 40%.
The Growing Tension Between Google and Publishers
Moving ahead, publishers squarely blame Google’s AI Overviews, which now give answers directly in search results. Pew Research discovered that six in ten adults ran into an AI-generated summary at least once in March. Additionally, those summaries cut click-through rates to external sites by more than half. This development significantly reminds users that Google cost-cutting measures and product shifts are reshaping how people find and consume news.
Unlike OpenAI, which has signed high-profile content deals with The Financial Times, News Corp, and Axel Springer, Google has been slower to license publisher content. TechPolyp has observed that its handful of agreements with the Associated Press and Reddit are reportedly worth $60 million a year. However, this is pale in comparison. Forging ahead, Reddit is angling for renegotiation, believing its data is worth far more than the first deal suggested.
Moving on, exploratory talks with about 20 publishers are happening behind the scenes in consequence of the Google cost-cutting measures. However, the optics of cancelling an FT subscription are hard to miss. To some, it looks like a student refusing to buy the very textbook they’re lifting answers from.
That frustration boiled over at a recent Fortune event. Specifically, Neil Vogel, CEO of People Inc., labeled Google a “bad actor,” accusing it of using the same bot to crawl content for both search and AI features. Moving ahead, Jason Kint of Digital Content Next went further in a blistering op-ed. However, he warned that AI Overviews have created a “zero-click” internet where “all traffic dead ends at Google.”
Put together, these critiques suggest something more profound. And that, significantly, is Google cost-cutting measures may save dollars. However, they’re also eroding trust, straining publisher ties, and changing the very fabric of the open web.