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Google, under fire from Rupert Murdoch and some other newspaper owners, said Tuesday it will let publishers set a limit on the number of articles people can read for free through its search engine.
The Google announcement came as the News Corp. chairman, who has threatened to block the Internet giant from indexing his newspapers, and other US media heavyweights gathered here to discuss journalism in the Internet age.
Murdoch, speaking at the two-day meeting hosted by the Federal Trade Commission (FTC), said newspapers "need to do a better job of persuading consumers that high quality reliable news and information does not come free."
"Good journalism is an expensive commodity," said the 78-year-old Murdoch, who repeated his intention to begin charging readers of News Corp. newspapers on the Web.
Arianna Huffington, co-founder and editor-in-chief of The Huffington Post website, accused Murdoch and other newspaper publishers meanwhile of being in "digital denial" and said they needed to "stop whining."
Murdoch has accused Google and other news aggregators of "stealing" stories without sharing advertising revenue and has reportedly been holding talks with Microsoft about making News Corp.'s content accessible exclusively through the software giant's new search engine, Bing.
Acknowledging that "creating high-quality content is not easy and, in many cases, expensive" Google said in a blog post on Tuesday that it was changing its "First Click Free" system.
First Click Free lets Web readers access a story on a newspaper's website from Google or Google News but prevents them from having unrestricted access once they reach the site.
Google noted, however, that some readers were "abusing" the system by returning to Google or Google News and clicking through to other stories.
"Previously, each click from a user would be treated as free," Google senior business product manager Josh Cohen said in a blog post. "Now, we've updated the program so that publishers can limit users to no more than five pages per day without registering or subscribing."
Asked about the Google announcement, Danny Sullivan, editor-in-chief of SearchEngineLand.com, said: "You can call it a concession or you can call it Google being responsive to publishers. Depends on the spin you put on it."
Without naming names, Murdoch hit out against news aggregator sites saying they're "feeding off the hard-earned efforts and investments of others.
"To be impolite it's theft," he said.
The News Corp. chief also said "some newspapers and some news organizations will not adapt to the digital realities and they will fail."
"The old business model based on advertising only is dead," he said. "In the future, good journalism will depend on the ability of a news organization to attract readers by providing news and information they're willing to pay for.
"In the new business model we will be charging consumers for the news we provide on our Internet sites," Murdoch said. "We are already charging -- and successfully so -- for the Wall Street Journal online.
"We intend to expand this pay model to all our newspapers in the News Corp. stable: the Times of London, The Australian, the rest," he said.
"Some critics say people won't pay," Murdoch said. "I believe they will."
Murdoch also warned against seeking government help for the newspaper industry, which is battling declining print advertising revenue, falling circulation and free news on the Web.
"The prospect of the US government becoming directly involved in commercial journalism ought to be chilling to anyone who cares about free speech," he said.
Huffington rejected Murdoch's criticism of news aggregators saying they actually drive traffic to newspaper websites.
"In most industries, if your customers were leaving in droves, you would try to figure out what to do to get them back," she said. "Not in the media. They'd rather accuse aggregators of stealing their content.
"It's time for traditional media companies to stop whining," she said.
