Google and Facebook should abandon Australian news

It's also led to click-bait and hyperventilation as most media reach for a mass market.

Exacerbating this problem is the fact that the major tabloids were economically viable only by an act of philanthropy on behalf of their advertising departments, particularly classifieds. When these were cannibalised by Realestate.com.au, Craigslist, and on and on, and when advertising inventory on the internet became virtually infinite, charitable intra-company cross-subsidy was no longer a possibility.

So now we are onto a new funding model where the legacy media, many of whom made the money they did because of regulation of one sort or another, have prevailed on the ACCC and the government to embrace a funding model where they hit-up the social media companies, who can make money on advertising only by keeping overheads miniscule, and confiscate some of their advertising revenue via a company-specific tax.

This is not law, this is theft. While it might be legitimate to tax different kinds of companies at different rates and book the income to general revenue, it can never be legitimate to tax different companies at different rates and book the income to their competitors.

Search and media are in a symbiotic relationship where media would die without search, but where they both need advertising, and where the advertising on both platforms is sometimes provided by search, so the relationship can be confusing, and has been deliberately confused by media in this case.

Google and Facebook are the newsagents of the twenty-first century, but unlike the newsagents of the 20th Century, they don't get to charge the news organisations for their services.

So they have to fund it another way – internet advertising. Now legacy media wants to clip that ticket, and they've enlisted the government to help. I can't think of a better description of this than crony capitalism.

If the social media companies had to pay for linking to other company's content, then their business model is broken and they should withdraw their services.

This isn't a threat, as the Prime Minister claims, this is standard business practice – if you can't make a profit, you don't do it. If legacy media had followed this practice then it would be profitable – and different – by now, rather than trying to suck Internet frenemies dry to prop-up uneconomic content.

What we are seeing now is classic rent-seeking where legacy media, including some of the early online pioneers, are trying to penalise a successful competitor for having a better model.

Mainstream media claim that social media are profiting from their content, but this doesn't stand scrutiny. If there was any theft in what Google and Facebook are doing it would be a breach of existing copyright law and the media companies would be able to claw back profit using it.

The fact they are proposing novel legislation proves their over-reach.