Australia’s Seven West Media strikes partnership with Google; shares jump

FILE PHOTO: The headquarters of media broadcaster/publisher Seven West Media in Sydney, Australia February 14, 2017. REUTERS/Jason Reed

(Reuters) – Seven West Media Ltd on Monday entered into an initial deal with Alphabet Inc’s Google to form a long-term partnership, that will see the tech giant pay the Australian media company for its news content.

Google launched its News Showcase platform in Australia earlier this month, which will see it strike its own content deals with publishers and pay seven domestic outlets to use their content.

The launch of the product is Google’s latest tactic in a campaign against the Australian government’s planned legislation to make the company pay publishers and broadcasters for content that appears in its search engine.

The legislation, which Google previously said was “unworkable”, will be introduced by the Australian parliament this week.

Seven West Media Chairman Kerry Stokes said in a statement that the proposed bill had enabled the company “to conclude negotiations that result in fair payment” and ensure its “digital future”.

Seven West shares jumped as much as 10.6% to their highest level since May 31, 2019 in early trade, while the broader market was up 0.9%.

Financial terms were not disclosed. The company added that its agreement with Google would be subject to executing a long-form agreement within the next 30 days.

In a separate statement, Seven West reported a 26.5% rise in its underlying net profit after tax for the half-year ended Dec. 26 to A$86.6 million ($67.20 million, helped by strong performance in its advertising market.

“The market is showing positive signs of recovery with strong growth in the second quarter and forward bookings are looking positive for the third quarter,” said Chief Executive Officer James Warburton.