Rupert Murdoch, the smartest man in newspapers?
I wrote an analysis on Monday about the possibility that News Corp might take its news search results away from Google and list them on Microsoft’s Bing search engine instead. My conclusion: This one isn’t such a hot idea. Then I read John Gapper’s Financial Times item about how it *could* be a hot idea.
To recap, here’s how it would work.
- Microsoft would pay News Corp for the privilege of being the only search engine to carry results from papers including the New York Post, Wall Street Journal and Times of London.
- Microsoft thinks it can get more people to use its search engine, drawing them away from Google.
- News Corp could punish Google, in essence, for making tons of money from the ads it serves alongside news search results. Why, the thinking goes, should Google make a bunch of money off the news that we produce and our newsrooms go starving and our ad sales tank?
- Other newspaper publishers, if they see Murdoch making it work, might think the same thing and abandon Google en masse.
I and many others wrote that it would be a gamble at best. What if people don’t care that much about news? If the 70 percent of the search market that uses Google discovers the news is absent, will they switch search engines? Scientists of misanthropy like me say it’s unlikely. If they don’t find it, they won’t seek it.
Gapper at the FT has another way of looking at it:
In effect, (Murdoch) would be swapping his revenue stream from online advertising with a payment from Microsoft for drawing visitors to Bing. That suggests one of two things: either, as a lot of digital evangelists have suggested, he is getting old and does not “get” the internet, or he has looked at the figures and decided that Google traffic is not worth very much. Personally, I think the latter is more plausible. …
Mr Murdoch appears to have decided he will not lose very much by ditching Google traffic and even a fairly small payment from Microsoft would compensate. He is attempting to get distributors to pay for content in the way that US cable operators pay cable networks for programming. … If the revenue from search traffic is low, why not swap it for something else?
In other words: You, Mr. or Ms. Newspaper Publisher, hate Google because you’re in a co-dependent relationship. You need Google, but Google hurts you too, so you want to escape from Google, but you can’t… But think about it this way: How much worse can it be? You’re shedding hundreds, if not thousands of jobs, and you call 25 percent ad revenue declines an improvement over how they were a few months ago. What’s NOT to lose? And if someone’s paying you more than you’re making now?
Not to add too many question marks to one blog post, but does this make Rupert Murdoch the smartest man in newspapers?