Rupert Murdoch is reported to be considering locking Google out of his News Corp properties and selling the search keys to Microsoft’s Bing. (Click here for story.) If the deal goes through, then theoretically wsj.com and all the other News Corp sites will be off limits to people searching for news items on Google. To find the News Corp sites, they would have to use Bing instead. The popular opinion is that if the deal goes ahead, Murdoch will be cutting off his nose to spite his face. But is that really the case?
To me, news is a commodity and I can’t see myself either changing my search engine or paying to get access to a specific news site. But unless Murdoch is just blowing hot air, he seems to believe he can get me to do so. What does he know that I don’t?
On one side of this issue you have web-savvy pundits who seem to assume that Murdoch is acting in a fit of misinformed pique. According to Erick Schonfeld, “If The WSJ.com Says Goodbye To Google, It Will Also Say Goodbye To 25 Percent Of Its Traffic.” That’s a big chunk of volume. But Murdoch believes that this is traffic he can live without.
Putting forward his side of the argument in a recent interview with Sky News Australia, Mr. Murdoch said, “We’d rather have fewer people coming to our Web sites, but paying.” Well if he can pull that trick off, he will be bucking a well-established phenomenon: Double Jeopardy. Penetration and loyalty are closely linked in the media world just as they are for branded goods. So whether Mr. Murdoch likes it or not, if his sites have fewer visitors overall, those visitors are less likely to be loyal and less likely to pay to access the site.
But will traffic really drop, or is Murdoch actually betting that it will stay the same with or without Google? After all, as many people are keen to point out, it is almost impossible to wall in news content, particularly in the age of social networks. Lining up with Murdoch, Mark Cuban points out that Facebook and Twitter are already beginning to bring the news to you without the need to search for it. If, as Cuban suggests, Twitter and Facebook are the news source’s allies, then maybe Murdoch can try to cut Google out of the loop while benefiting from increased referrals from social networks. And, of course, if the Bing deal goes through, he will be making money on that side of the fence too.
Personally I doubt that socially transmitted news will reduce the need people feel to search out specific news content. People send you what is of interest to them at a point in time. They are unlikely to send you what you want precisely when you want it. But maybe Google will be so focused on the rise of Bing, Twitter, and others that they will blink and start a bidding war for News Corp’s content. It’s not like as if they have held back from buying content in the past. Let’s see, $1 billion for a 5% share of AOL, $1.65 billion for YouTube, $900 million to MySpace to provide search …
So what are your thoughts on the matter? What is Murdoch’s endgame?
(2 votes, average: 5 out of 5)
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November 30th, 2009 at 7:23 am
Hi Nigel, glad you addressed this topic. At this point the only viable way for many websites to stay afloat is to sell advertising access. And unless it is very specifically relevant to the viewer, it is immediately ignored. So as things progress both advertisers and content providers have come to realize the limitation of the advertising supported model to sustain the web. Which brings us to paid content. So far WSJ has kept a good deal of its content behind a paid wall. And it looks as if more will be placed there. And those of us who see value will go after it. (I subscribe to both paper and online versions).
It is the institutions that truly deliver unique and valued content that will be able to do this – the WSJ, NYT and probably Washington Post, because of their coverage depth, breadth and access to news sources that others typically cannot reach, that enable them to charge for content. I see two tiers of content developing – paid and premium and all others.
One final thought, I can’t agree that by cutting off 20% of his audience that Murdoch will be losing loyal users. I’d think that they – like me – will go out of their way to get to WSJ content. And if it requires a different search engine, then so be it.
December 3rd, 2009 at 3:12 pm
Endgame? Hrm … he hires Matt Drudge?
-ls
December 3rd, 2009 at 4:01 pm
Below is the first paragraph on my take on the Google Murdock challenge:
GOOGLE is not Sovereign CONTENT IS KING
Google projects itself as a plebian brand – a guardian of the masses. Its “do no evil” mantra acts as a sort of psychic shield against critical assault. Yet when one looks closely at its organic core – its essential OS is that of a sovereign. And, some sovereigns need a jester in the court to present truth without recriminations. So, permit me the role of jester as we take a look at the latest Murdock driven assault against Googledom. By extension we’re now questioning our digital value philosophy.
Link to the full story:
http://www.nearshorejournal.com/2009/12/google-is-not-sovereign-content-is-king/
December 7th, 2009 at 10:37 am
Thanks for the comments. I am not sure this issue has become any clearer while I was away on vacation!
To Phil’s point I do think there is a role for both premium paid content and free content but the providers of paid content must a) deliver content of real value, b) content themselves that their audience is likely to be a tenth of what it would be otherwise, and, c) acknowledge that they cannot hope to wall off their content completely.