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November 24, 2009
Microsoft-News Corp. Talks: A Marriage Made in Hell?
Two weeks ago, I commented on Rupert Murdoch's threat that News Corp. was thinking of blocking Google from being able to search its Web sites: "Murdoch to Google: Drop Dead."
Now it appears that Microsoft and News Corp. are talking about a deal that would involve News Corp getting paid to prevent its news content from being indexed by Google, Google News, Yahoo! and Yahoo! News and only get found when you did a search on Bing.
Is this a marriage made in hell?
Yesterday, Bill Tancer, General Manager of Global Research at Hitwise, double-checked his data in a post entitled, "News Corp. - If You de-Index Will They Still Come?"
According to Tancer, Google referred over 15 percent of WSJ.com's traffic and Google News referred 11 percent as of last week. He analyzed Google search terms driving traffic to the Journal, and found the top 100 terms accounted for almost 22 percent of all Google search traffic to WSJ.com. Of that 22 percent, over 13 percent were navigational or brand searches (e.g. "Wall Street Journal," "WSJ," and "WSJ.com"). "Even if Murdoch decides to block Google, these navigational search queries will most likely remain intact," said Tancer.
Of the remaining 8 percent, the majority of searches were for stock quotes, and general business related searches. "Most specific news related searches fill-out the long tail of search queries. While the Journal may lose traffic if it ceases to cooperate with Google the loss may be less then anticipated," he added.
However, the potential loss of Google News traffic is potentially more serious. Over the past three years, WSJ.com's traffic from Google News has grown from 2 percent to over 11 percent.
As you can see in the Hitwise table to the left, the Journal is receiving more than double the traffic from Google News than newspaper sites overall -- a custom category including national and regional papers. Bing, the potential News Corp. suitor for search exclusivity provides less than half of Google News' volume as of last week.
As newspapers continue to search for a way out of the search rip current, some are rooting for Murdoch's maverick de-index strategy. Nevertheless, the numbers bring us back to reality. Observes Tancer, "As print continues to hemorrhage readership, could blocking your most significant traffic source be a wise choice?"
That's not what Gordon McLeod seemed to say during his keynote speech at Search Engine Strategies New York 2008. McLeod is president of The Wall Street Journal Digital Network, which includes WSJ.com, MarketWatch.com, Barrons.com, Dow Jones Classified Ventures, and the recently launched AllThingsD.com.
But that was then and this is now. And Bing may change the dynamic, but I wouldn't bet the farm on it. I think the Microsoft-News Corp. talks are a marriage made in hell.
This reminds me of the movie "Newsies," with Joseph Pulitzer trying to out-muscle the kids "carrying the banner." As Jack Kelly says in the movie, "Well, dat's da foist thing ya gotta learn - headlines don't sell papes. Newsies sell papes." And Murdoch needs to learn that his news content doesn't send traffic to the Journal. Google sends traffic to the Journal.
News Corp. doesn't have a monopoly on high quality business news. I can use Google and Google News to find high quality business news from hundreds of "fair and balanced" sources.
Am I wrong? Let me know what you think by posting a comment below.
Posted by Greg Jarboe on November 24, 2009 10:15 AM
Comments
Antidisestablishmentarianism November 24, 2009 11:12 AM
Murdoch's move does seem to be a step backwards. Before the 1830s, newspapers depended entirely on readers to pay 100 percent of the bill. Then, advertising started footing an increasing share of the cost, enabling newspapers to drop their subscription or single copy prices -- and increase readership. In the 1990s, Ziff-Davis ran its circulation department at a slight profit, using advertising to cover the costs of editorial and product testing labs. Even the Wall Street Journal figured out that keeping its content behind a subscription firewall was hurting it -- which is why it started to change its policies in 2006. That's what Gordon McLeod was talking about in 2008. I'm all for newspaper sites finding a business model that works. But I just conducted a search in Google News for "Microsoft News Corp" and found 636 articles -- including ones by Reuters Blogs, BBC News, Sydney Morning Herald, Guardian.co.uk, Seeking Alpha, Daily Finance, ZDNet, BusinessWeek, ADOTAS, Gawker, The Consumerist, The Washington Post, MarketWatch, Media Buyer Planner, The Big Money, Siliconrepublic.com, Search Engine Land, and AdAge.com. So, will we really miss WSJ.com and other News Corp. media if they block Google? Maybe some people will, but most aren't likely follow Murdoch over to Bing. It reminds me of the lines by Carl Sandburg in "The People, Yes." A woman asks the captain of a ship, "Is that an iceberg on the horizon?" The captain says, "Yes, it is." The woman asks, "What if we get in a collision with it?" And the captain answers, "The iceberg, Madam, will move right along as though nothing had happened."
Greg Jarboe November 24, 2009 1:36 PM
If Murdoch is a dinosaur, he is a smart one. He does understand much of his traffic has been from Google sites. However, "There isn't enough advertising in the world to go around to make all the websites profitable", as he said in the sky tv interview earlier this month.
So, the bottom line is: the cost of content production cannot be covered from what Google brings to the content providers. So, things will have to change in some way. Or, we will not have as good as content we are enjoying for free now, after content providers are out of businesses.
In the Internet eco-system of Advertisers-Search Engines-Content Providers-Users, Google is so powerful. Murdoch, the smart dinosaur, is trying to leverage the competition between MS and Google, to improve the position of content providers, and weaken search engines. Readers still, maybe, do not need to pay.
Lots of media don't like their situation in the current eco-system either. They are just as strong as Murdoch who dares to say no to Google, yet.
Anyway, no matter whether Murdoch and/or MS will win the battle or not, a balance will be reached in the end.
Just my 2 cents.
Kuge Xiao November 24, 2009 9:36 PM
The toughest part is the maintenance of high quality reporters covering areas that do not get as much readership but is essential to maintaining the checks and balances the Fifth Estate ensures.
Would Watergate and other government or company wrongdoing be found out if the press was all web based? Or would we be limited to examples like Ripoff Reports and their extortion through inaccurate and slanderous stories?
Aussiewebmaster November 25, 2009 10:06 AM
Murdoch needs to wake up and realise that internet is bigger than he thinks, and more people use google than he thinks! preventing google will prevent users in turn! ...
msolution November 25, 2009 1:07 PM
In the old days, I was told: Never pick a fight with someone who buys ink by the barrel. In this era, maybe we should amend that to say: Never pick a fight with a search engine who has a name that's a verb.
Greg Jarboe November 25, 2009 1:16 PM
i agree the opinion that the cost of content production cannot be covered from what Google brings to the content providers
great post
Henry November 25, 2009 11:28 PM
If you think Murdoch is a dinosaur, you probably voted for Obama and think coal is satanic. Rupert ain't no damn dinosaur...He is a DRAGON! A Chinese Dragon with an Asian Wife who saw the mandarin writing on the wall 15 years ago. If anybody is a dinosaur it would be Google who caved like a lap dog to her Chinese masters... and BAIDU IS T-REX!
Wake up, America.
Bill Whetstone November 27, 2009 11:39 PM
As I've said in previous comments about this subject, Murdoch is a dinosaur who seems to have little understanding of the huge changes going on between the Internet and traditional news sources these days. He's setting a terrible precedent, and I fear many other foolish CEOs may follow in his footsteps before they realize what a terrible mistake they've made. This is not good for the Internet, and it's certainly not good for News Corp (though I could really care less what happens to them -- in fact, I'd prefer to see them go bankrupt, but god knows one bad move alone can't cripple them).