Google Counters Apple with "One Pass"
The day after Apple officially shared details of its new App Store subscription plan, which lays the groundwork for Apple to take a 30-percent cut from publishers who sell content within their apps, Google announced the launch of Google One Pass, its online charging service for newspapers and magazines. Google's rival service offers two big differences from Apple's: content providers will get to keep 90 percent of revenue from One Pass sales and publishers will retain control of consumer data. Outgoing Google CEO Eric Schmidt, who becomes Google's executive chairman in April, announced Google One Pass in a speech at Humboldt University in Berlin, Germany. Such an online payment system had been rumored for months, but Google obviously timed its announcement to promote the fact that its terms are more favorable--and flexible--to publishers than Apple's.
Schmidt said One Pass will initially be available to publishers in the U.K., U.S., Canada, France, Italy, Germany, and Spain, with a plan to expand further in the future.
With Google taking 10 percent of transactions and allowing publishers to control the consumer data they gather (something Apple has been unwilling to do), this sets the stage for how much it's appropriate for market makers like Google and Apple to skim from sales sold through their systems, which offer companies access to millions of customers.
As the appetite and market for content friendly mobile devices like smartphones and tablets continues to grow at a sharp pace, the stakes are very high and things could get ugly as friction develops between content providers and Apple, with Google doing its best to drive a wedge between the two. So far companies like Amazon, Netflix, and Hulu, have yet to comment on Apple's new subscription terms, but they will most likely use Google's rival service as a bargaining chip going forward.
