As I once heard a NY Times exec once explain, Google is the “frenemy” of newspapers these days. They definitely help disseminate the news, but they also make a profit off of the news and pay no royalties for it.

While efforts to get Google to pony up some cash for its use of newspaper headlines and articles snippets has largely been stymied in the U.S., European newspapers seem to have some courts and political leaders on their side. French president François Hollande brokered a deal between Google and French newspapers under threat of creating legislation to force Google to pay French publishers for the article snippets it uses.

The deal has Google paying €60 million ($81.3 milllion) into a French media fund that would help online publishers develop their Internet presence. Google would not have to pay a share of its revenues for use of article headlines and snippets, but Google will supply advertising to French media sites and share revenues from those ads.

This deal means that subscription and paywall sites operating internationally won’t have to change their SEO practices for the French market. But it’s also a bit of a blow, as Google and other search engines are not willing to help rebalance web economics to keep news sites in business. While not paying royalties is a short-term gain for Google, it may end up being a long-term disadvantage as more news sites go under and Google is left without reputable stories from reputable sources to disseminate.

However, Google still needs to resolve similar litigation in Germany, where Chancellor Angela Merkel’s Christian Democrats party is pursuing legislation that would extend copyright law and force Google to ask permission before publishing links and excerpts.

Photo: (c) Spencer E Holtaway via flickr