09:46 AM

Is Murdoch Setting Up A Bidding War For News Corp. Index?

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:

Want home delivery of the print paper? That's $145 a year. Want home delivery and online access? That's $245. And if you want just online access -- to an electronic edition that duplicates the appearance of the print product -- it's a whopping $345.

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.