Google has often been charged with being responsible for demolishing the business models of traditional publishing. Online, publishers are now dependent on Google’s independent algorithmic decisions for their traffic, meaning that their Display and Adsense revenue streams are now directly affected by Google’s algorithms. Any algorithmic twitch by Google today percolates across the entire publishing eco-system, leaving site managers scrambling for ways to recover their lost revenues each time a detrimental change is made. With Adsense, major publishers are now finding that Google is responsible for more than half their advertising revenues. By going with Google’s paywall system, publishers will be letting Google in on one of their last remaining revenue streams – Subscription Revenues, at a 30% premium, with Google potentially holding the reins on how publishers price their content (at least on the micropayments side) as well.

The choice of a paywall solution cannot be a pure technology consideration. When evaluating revenue streams through paid/metered/subscription access solutions, publishers have to evaluate the risk landscape carefully, and ensure that revenue risks are well hedged through diversification of their revenue sources.

Newspass may be a big story for Google, but I am not sure this is something for publishers to rush into.