Rupert Murdoch may not know much about the internet. But he knows more about how to make money than anyone else in the media business.
So when he began prattling on about erecting pay walls around his websites and making them invisible to Google’s search engines, media observers had two choices. They could smugly conclude that Rupe, at 78, was finally losing it. Or they could sit back and wait to see what he really had up his sleeve.
Following several weeks of speculation, we are beginning to learn what Murdoch might actually be up to, according to a report in the Financial Times. No, it’s not about pay walls. He may not have given up on the idea, but presumably he’ll come to see that it’s a loser’s game. Rather, Murdoch — and possibly other media players — are cosying up to Microsoft, whose newish search engine, Bing, has quickly established itself as Google’s main competitor.
The idea is that Microsoft may be willing to do what Google, so far, has resisted: pay-news organisations for the privilege of featuring their content on its site.
There is no advertising on the home page of Google News, the Googletron’s automated aggregation site. But if you search Google News, contextual ads will pop up. Search for news about Indonesia, for instance, and you’ll be shown ads for Indonesian vacation services and hotels. Google keeps that money to itself, arguing that it’s driving considerable traffic to the news sites to which it links, and that it’s up to those sites to monetise that traffic.
It’s a persuasive argument, and it’s one that news organisations grudgingly accepted until the past year or two, when their world began imploding. Sure, publishers whined. But none dared take the simple step of inserting a line of code into their sites so that Google wouldn’t be able to find them.
Now comes Microsoft, which might be willing to set up a Bing news service whose ad revenue would be split with content-producers. No, it’s not likely that Bing will catch up with Google, which has a huge head start (65% of the search market to Bing’s 10%) and works extraordinarily well. But if Microsoft could establish a reputation for Bing as a second site you had to visit for any serious search, that could be enough to make it a profitable sideline.
And Microsoft, predictably, is playing hardball, according to the FT: Microsoft wants news sites to pull out of Google in order to take part in the potentially lucrative alternative universe it hopes to establish.
Last week, Mike Butcher at TechCrunch reported that Microsoft is talking about investing as much as £100 000 in a news system. Hard to know what to make of that. It sounds a bit like Lorne Michaels offering the Beatles $3 000 to reunite on Saturday Night Live. But clearly something is in the works.
Now, I will grant you that Murdoch has had some wacky things to say, and he might actually believe them. “People who simply just pick up everything and run with it, steal our stories — we say they steal our stories, they just take them without payment,” he recently told his own Sky News.
Google is not stealing his stories. Every visitor that Google drives to one of Murdoch’s properties is a visitor Murdoch might not otherwise get. It is not Google’s fault that news sites have proved utterly unable to choke enough money out of those visitors to cover the cost of their content.
Murdoch may also be blinded by the fact that his flagship newspaper, the Wall Street Journal, has enjoyed some success in charging for content. Trouble is, the Journal is a speciality business publication similar to the FT (which also charges for much of its content), and corporate executives would rather pay than go without.
But the idea that anyone would pay for access to Murdoch’s run-of-the-mill properties like the New York Post, Fox News or his British papers is ludicrous. It’s not that they’re bad (though they are); it’s that there are free alternatives for everything they produce.
Murdoch and other newspaper publishers may yet find a way to blow it. TechCrunch’s Butcher also reports that among Microsoft’s attractions is the possibility that Bing will offer a more granular approach, allowing news sites various options if they want to charge for some types of access. Sorry, but a pay wall is a pay wall is a pay wall.
On the other hand, if newspaper publishers can establish the principle that aggregators should share their revenue, then that could have significant implications for the flagging news business. Google might respond in kind. And then what are aggregators that are considerably less benign than Google going to do?
Rick Edmonds, a business analyst for the Poynter Institute, writes that “a broad movement of branded news sites to a preferred relationship with Bing would not be so easy to shrug off. Microsoft could become an important player in the paid content equation. Google might counterbid to prevent that from happening.”
Last week Vanity Fair columnist Michael Wolff, head of the especially pernicious (as in, you literally have to click twice before you can leave the site) aggregator Newser.com, popped up on National Public Radio’s On Point — along with Buzz Machine blogger and Guardian columnist Jeff Jarvis — and proceeded to portray Murdoch as moronic, insane or both.
But Murdoch is proving once again that he can’t be dismissed so easily. The online news landscape might look very different a year from now. If you’re someone who’s got an interest in the survival of professional journalism, it might look better as well.
And the man Slate‘s Jack Shafer invariably refers to as the “rotten old bastard” will be chuckling, and counting his money, yet again. – guardian.co.uk