Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Analysis On Murdoch And Switching Off GOOG: The Dirty Little Secret About Search Engine Traffic...

Posted by Tom Foremski - November 9, 2009

Every time Rupert Murdoch complains about Google and says he will cut off access, a mass of Twitterati, Digerati, and Diggerati think the old newspaper tycoon has lost his marbles and doesn't "get it."

Surely, they chorus, all that traffic that Google sends to the Wall Street Journal is the equivalent of sending a fire hose of cash straight into his pocket. Why would he want to turn off such a lucrative spigot?!

The answer is that he wouldn't, if that were indeed the case. The ugly truth is that Google traffic is hard to monetize. It's not the bonanza that people think it is.

Google traffic is low quality, it is people who stumbled upon the article. Usually, about one-half is new to the site, it had never been there before. The other half already knows who you are. For well established brands this offers incremental value.

More importantly, Google traffic doesn't help the newspaper advertisers much because they are trying to buy a specific sector, a specific readership. For example, the Wall Street Journal advertisers are very business and stock trade oriented. For other newspapers, the advertisers want that particular local metro. Having random readers brought in by Google from all around the world, doesn't do much for the advertisers or the newspapers.

Yes, you can sell those extra pageviews to your newspaper advertisers but they get to see the metrics too, and it doesn't take them long to figure out that much of the Google traffic isn't the traffic they want. That, in turn, lowers the amount of money they will pay for pageviews. Google traffic thus lowers the value of all the pageviews that a newspaper pulls in.

Mr Murdoch knows his businesses. He can run the numbers and see if the revenue from subscriptions will outpace relatively weak revenues from Google traffic.

He can selectively use Google and other search engines, and aggregators to pull in traffic to "free" content then shut it off. He has lots of levers to pull in terms of figuring out an optimum for running his business.

In contrast, Google doesn't have any levers to pull. It relies heavily on access to new content. After all, why use a search engine to find what you already know?

Novelty is extremely important to Google. Yet its only answer to content producers has been "we bring you lots of traffic." The dirty little secret is that that traffic is very difficult to monetize, it has a low value. Even Google has trouble monetizing its Google News traffic.

Google is very much at the mercy of all of the Internet's content producers and whether they let it in, or leave it outside.


UPDATE: It seems my analysis was spot on. The Daily Telegraph November 13: Jonathan Miller, News Corp's chief digital officer, said:

"The traffic which comes in from Google brings a consumer who more often than not read one article and then leaves the site. That is the least valuable of traffic to us... the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it."

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Please see:

Rupert Murdoch to remove News Corp's content from Google 'in months'

News Corp Wants To "Lead" The Media Industry To Its Own Demise

WSJ Chief: There Are Two Types: Creators And Aggregators - Creators Carry The Burden Of Costs

"Google Devalues Everything It Touches" - Wall Street Journal Chief

FutureWatch: The End Of The News Aggregators And The Future Of News

Adtribution Might Be A Solution For Murdoch, A.P, Et Al, Versus The News Aggregators And Bloggers

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Recent coverage:

Murdoch may block Google searches

Google may lose WSJ, News Corp sites

Has Rupert Murdoch Finally Lost His Mind?

Now it's Murdoch vs. the World as He Threatens to Sue the BBC | BNET Media Blog | BNET


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