Is Murdoch Setting Up A Bidding War For News Corp. Index?
By Tom Foremski - November 22, 2009
The Financial Times reports that Rupert Murdoch's News Corp has had discussions with Microsoft about payments to be able to index its content.
The impetus for the discussions came from News Corp, owner of newspapers ranging from the Wall Street Journal of the US to The Sun of the UK, said a person familiar with the situation, who warned that talks were at an early stage.
However, the Financial Times has learnt that Microsoft has also approached other big online publishers to persuade them to remove their sites from Google's search engine.
This is inline with my analysis from a week ago: Murdoch Will Negotiate Payment For Access To Basket Of Content With GOOG et al
MediaWatch Analysis Part II: Google Has More To Lose Than Murdoch
The way this story has been leaked means that Rupert Murdoch is likely setting up a bidding war between Microsoft and Google. Will Google allow Microsoft to walk away with the index to News Corp. content and quite possibly the index for other large media companies?
Google will have to bid against Microsoft because it has more to lose than News Corp and other media companies have in losing Google traffic ( it's traffic that holds little value because they can't easily convert it to revenue.)
If Google is perceived to be lacking in its index then it risks losing trust among users that it is the best place to go for search. That's risking its most valuable asset -- its brand.
For News Corp. and other newspaper companies, charging for the index and also putting some content behind a paywall, could offer a way to stop the slide in their print business. Free online newspapers are competing with their own print version.
Some newspapers are experimenting with making online subscriptions more expensive than subscriptions to the newspaper.
For example, the Newport Daily News has begun charging more for the online version of its 12,000 circulation newspaper. Nieman Journalism Lab reports:
Just because news has been free for many years doesn't mean it will remain that way. The Internet used to be advertising free and people said that users would never accept online advertising.
If charging for news content doesn't work then there will be fewer news stories being produced because free news doesn't pay the bills. The only "free" news available will be that produced by organizations representing a client -- advertorials in various disguises.
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Comments (5)
The decision made here by Google will affect the future of the internet BIG TIME! Google PLEASE choose wisely..
Posted: November 22, 2009 7:39 PM
Tom, I respectfully disagree.
Once upon a time, Google did not have WSJ articles; Google did just fine.
The entire corpus of WSJ monthly uniques is 0.005 percent of Google's uniques. So on a raw numbers basis, the WSJ (the highest profile News Corp property) isn't even a drop in the bucket.
And how many people find a WSJ story through Google ... versus Techmeme or Twitter or a financial blogger?
Microsoft has spent billions over the past decade and can't get past a 10% market share in search. It cannot be the piggy bank that preserves news organization monopoly rents - heck, it can't retain its /own/ monopoly rents.
Finally, why would an /advertiser/ at the WSJ agree to a deal that says, in effect, "this web page will be indexed by only one search engine - the one in the #3 spot"?
Posted: November 23, 2009 2:02 AM
I suspect that this will never fly. Why would I pay for Newscorp. content when their competitors are still free? It's just bad business sense.
I think what Murdoch should be doing is (1) setting up an unpaid registration wall, (2) exploring how to use first-click-free from Google, (3) diversifying his ad revenue model, and (4) using the user-data he'll accrue through fee user profiles to offer advertisers better targeting and ROI.
[sigh]...
Posted: November 23, 2009 9:58 AM
Kathy, you make some great points. I don't know what the terms of a deal between News Corp. and MSFT or GOOG would be. Clearly it would involve more than just being included or excluded from a search index and might also include the proper ranking. Often the original news article will rank lower than blog posts linking to it. And as for people using other aggregators such as Techmeme and Twitter and blogs, the value of Google and other search engines is diminished and thus the loss of Google index is of lower consequence for News Corp. However, for Google, even though the loss would be paltry, psychologically it would not. This 0.005% part of its index (News corp) is more vocal than any other part. The perceived loss would feel much greater to Google users and far more damaging to its reputation than would seem from its size. There's more to News Corp. than WSJ. And other newspaper companies would have the choice to follow News Corp's precedent and widen the hole in Google's index.
Posted: November 23, 2009 10:29 AM
CT Moore: Yes, you wouldn't pay if you can get it free elsewhere. But you might pay if it was original content you couldn't get elsewhere. And Murdoch can still do all the things that you suggest plus put some content behind a paywall. He has a lot more options and permutations to play with than Google has and I expect him to use them all.
Posted: November 23, 2009 10:33 AM