Google settles French newspaper links dispute

Google has agreed to create a 60m euro ($82m; £52m) fund to help French media organisations improve their internet operations, BBC reports.

It follows two months of negotiations after local news sites had demanded payment for the privilege of letting the search giant display their links.

The French government had threatened to tax the revenue Google made from posting ads alongside the results.

The US firm had retorted it might stop indexing French papers' articles.

In addition to the creating the Digital Publishing Innovation Fund, Google has agreed to give French media access to its advertising platforms at a reduced cost.

The compromise allows it to avoid paying an ongoing licensing fee.

"France is proud to have reached this agreement with Google, the first of its kind in the world," the French president's office said on Twitter.

One analyst told the BBC that the President's comment was telling.