It was inevitable that someone would seriously consider taking Google's dare.
Rupert Murdoch is reportedly thinking about removing all of News Corp.'s content from Google and striking an exclusive deal with Microsoft's Bing.
(Credit: Dan Farber/CNET)For years, Google has all but dared traditional media companies trying to develop online businesses to live without the traffic it sends their way. The folks at the Googleplex make it clear that content owners who believe Google is unfairly indexing (or stealing, depending on your point of view) their content can easily remove that content from Google's massive corner of the Internet.
There's a tradeoff for that independence, of course: Don't expect the advertisers that have signed deals based on site traffic to pay the same amount next year.
News Corp. might be getting ready to do what many think is unthinkable. Reports have surfaced over the last several months, most recently in the Financial Times, that News Corp. is in talks with Microsoft to enact a plan that would see News Corp. properties hiding their content from Google's search engine in return for exclusive listing with Bing.
Rupert Murdoch, News Corp.'s famously cantankerous leader, isn't stupid: Microsoft would also have to pay News Corp. for the privilege of exclusive access to that content. But as Microsoft continues to lose billions of dollars a year on its online business, can it afford to be successful with this strategy?
Even if Microsoft is willing to cough up a huge sum (which Kara Swisher at Boomtown thinks is unlikely) for News Corp. content, this plan would only have a chance of turning the tables on Google if News Corp. and Microsoft can convince other large media companies to follow their lead.
First off, the practice of actually removing News Corp. content from Google would be relatively simple. News stories from The Wall Street Journal, commentary from The New York Post, and videos from News Corp.'s myriad cable and satellite television organizations can be tagged with a "noindex" tag, and Google won't index those pages as they are published. This also applies to pages that have been previously indexed, since they will be crawled again, this time with the new tag attached.
However, News Corp. would then need a backup plan to compensate for the revenue it would lose from the precipitous drop in traffic. With 65 percent of the search market, Google is the largest Web site in the world as measured by traffic. And its stated goal is to be the best information kiosk ever created by fielding queries and sending searchers on their way as fast as possible.
Murdoch has proposed removing his Web sites from Google only after constructing pay walls like the one used at the Wall Street Journal to limit free access to content, which is a somewhat controversial notion in this media era.
What News Corp. and Microsoft are reportedly discussing, however, is slightly different. Under the scenario outlined by the Financial Times, it does not appear that News Corp. would erect pay walls for all its content upon removal from Google. Instead, it would continue to make that ad-supported content available for free exclusively through Bing, helping offset the decline in traffic with a cash payment.
The two companies would then presumably market the hell out of the arrangement, because it would require a sizable shift in consumer expectations for Internet search. Right now, people are used to the idea that DirecTV is the only television provider that can offer a full package of NFL games every week, or that Comcast's Versus channel isn't available on DirecTV because of a licensing spat.
But that's not what they expect when they search online for news or information about a certain topic, and it would take some effort to educate them that The Wall Street Journal or Fox News' content can only be found if you're searching on Bing. Microsoft has already invested $100 million into Bing advertising, and would need to increase that amount to drive home the point that Bing is the only place you can find Fox News stories.
So will enough people be interested in that content as to change their search behavior and dramatically increase Microsoft's search market share? It's hard to see News Corp. moving the needle by itself, but modest results could embolden Microsoft to cut similar deals with other news companies and start the ball rolling toward the idea of Bing 2.0 as "the world's news search engine." That would be an interesting product.
As with just about everything, however, such a deal will likely come down to the amount Microsoft is willing to invest in such a project. Microsoft's Online Services Division, which runs Bing, is currently hemorrhaging money to the tune of $480 million in losses during its first quarter alone. Setting up content deals with the media industry would increase short-term costs with an iffy notion of when that investment would pay off in terms of increased search market share. And while Microsoft continues to milk Windows and Office profits, it can't throw money down a rabbit hole forever.
That means there's a sizable chance that this whole operation is geared around News Corp. negotiating a search and technology services deal with Microsoft to replace its current one with Google, which expires next June. Installing Bing as the search provider on News Corp. sites would generate increased searches for Microsoft while denying a common enemy Google some revenue, without kick-starting a huge battle that would have wide-ranging effects.
Murdoch has been able to tap into a well of frustration among those in the traditional media business over the way they are unable to duplicate the profits they enjoyed in the offline world on the Internet. But does he really want to call Google's bluff?
If so, he's banking on the notion that while basic news is a commodity, opinion and analysis is not. And whatever you might think of the various News Corp. properties, it's hard to argue they haven't earned a reputation for themselves as a unique source of opinion and analysis.
Hot on the heels of its appointment of a chief technology officer last week, News Corp.'s MySpace on Monday announced that Mark Rosenbaum has been hired as its chief financial officer.
Although the appointment marks the first time that the social network has had a CFO, it is Rosenbaum's second stint at News Corp. He headed up financial operations at Gemstar-TV Guide International, when it was owned by the Rupert Murdoch-helmed conglomerate. More recently, Rosenbaum served as a consultant to MGM.
Mark Rosenbaum's MySpace profile picture.
(Credit: MySpace)In his new position, Rosenbaum report directly to Owen Van Natta, the former Facebook executive who became MySpace's CEO in April, after the departure of co-founder Chris DeWolfe.
Less than two months after Van Natta's hiring, MySpace announced a layoff of nearly 30 percent amid stagnant growth and what was increasingly a losing battle against Facebook in its quest for social-networking dominance. The company called its aim at financial efficiency a "return to start-up culture."
Hiring a chief financial officer is, as a result, a logical step.
"Having led companies at every stage of their development, Mark understands both start-up culture and mature businesses, and is well-suited to guide MySpace's financial organization through its next phase of growth," Van Natta said in a release announcing Rosenbaum's hire. "We're thrilled to add someone with his pedigree and experience to the team."
(Credit:
MySpace)
MySpace unveiled its new messaging system late on Thursday night--which now lets members use the formerly internal service to e-mail others from an @myspace.com account--and the reactions have been pretty positive. Since it's slowing rolling out in beta over the next few weeks, hands-on reviews are hard to come by, but the design looks pretty good and people seem to agree that it may help reverse some of the site's well-publicized traffic stagnation.
Here are the numbers: MySpace says that nearly a fifth of its traffic is related to the messaging platform, and it has 130 million users worldwide. MySpace Mail can therefore enter the market as the fourth largest e-mail provider in the world and the second biggest in the U.S. It also gives the News Corp.-owned social network a leg up on Facebook, which has eclipsed it in traffic but still has a pretty rudimentary messaging system. (That's apparently going to change, from what everyone's been saying.)
MySpace Mail, in tune with its media-savvy young audience, has made it easier than other e-mail clients to attach music, video, and picture files. Additionally, if you're contacting another MySpace member, an activity feed of that member's recent MySpace goings-on will appear in the right sidebar. Those are features that I wouldn't be surprised to see other e-mail clients start integrating in the future.
But will MySpace Mail shake up the industry? I don't think so.
The question for MySpace is uptake. The majority of its users likely already have other e-mail addresses that they already use, and switching over may be a complicated matter: the hassle of changing address books, not to mention updating e-mail list and account subscriptions, means that people just don't change their addresses very often. And it doesn't have the invite-only allure or the power of a name like Google behind it that Gmail had when it launched in 2004.
Security's also an issue, given how well-publicized MySpace spam and worms have been over the years. The company says it is using "leading anti-spam technology and virus scanning" in the overhauled messaging client.
So, according to PaidContent, MySpace is about to upgrade its messaging service to full-out Web mail: so that instead of only being able to communicate with other MySpace members, users will have an @myspace.com e-mail address. This will start rolling out on Thursday, apparently, with the new service available to all MySpace members by the end of the year.
This seems a little odd at first, considering we recently heard that the troubled MySpace was more or less giving up on trying to compete with Facebook, and was attempting to rebrand as an "entertainment portal." Launching a new tech-related product doesn't seem to fit into that, unless you consider that (according to PaidContent) this has been in development since before the management shakeup that saw Owen Van Natta replacing Chris DeWolfe as MySpace CEO, and brought in former AOL exec Jon Miller as the head of parent company News Corp.'s digital operations.
But here's a thought: I wonder how much the focus of "MySpace Mail" will be geared toward bands and artists who want a better way to manage and communicate with their fan bases. Enhanced messaging could make it possible for music acts, who were what made MySpace popular in the first place and are undoubtedly a big part of its new entertainment-centric strategy, to use MySpace to communicate with fans who might not be using MySpace.
For ordinary users, meanwhile, e-mail addresses could help pull the MySpace brand off its domain and give it more reach--much like the MySpace ID universal log-in product, which hasn't really rolled out yet (and which may have had large-scale success quashed by the ubiquity of Facebook Connect). And while revamping its messaging system might not bring in many new users for MySpace, it could help stall potential attrition.
MySpace has allowed its users to reserve "vanity URLs" for their profiles for years now--something that Facebook only started doing this summer.
Amid economic woes, stagnant growth, and a management shakeup, onetime social-networking pioneer MySpace has announced that it has cut its head count by slightly under 30 percent in what the company calls a "return to start-up culture." Well, that's a nice way to put it.
Reports had circulated that MySpace would be laying off nearly half its employees in a move that had delayed its relocation to a bigger office space in the Los Angeles area. With the layoffs, MySpace's full-time U.S. employee roster will be down to 1,000 people--which means somewhere just south of 500 jobs were cut.
MySpace said that the layoffs are evenly distributed across all U.S. divisions of the company. Since MySpace also operates a number of offices overseas, it's not yet clear how they were affected (if at all), and representatives declined comment as to whether international offices would be affected down the road. CNET News has heard rumors that there may be consolidation in some of MySpace's European offices, something that the company did late last year when it merged its Amsterdam and Berlin offices.
"Today the domestic restructure is the only info we can share," a MySpace representative said in a phone call Tuesday.
Owen Van Natta, CEO of the News Corp.-owned social site, said in a release: "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company. I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product."
Van Natta, the former chief operating officer at Facebook, was hired as CEO of MySpace late in April after a short stint at the head of start-up Project Playlist. Former CEO Chris DeWolfe had stepped down earlier that month, reportedly at the behest of Jonathan Miller, the new digital czar at News Corp. Executive shakeups at MySpace had been happening sporadically for nearly a year at that point.
MySpace's new executive lineup gives it solid entertainment street cred: Van Natta was joined by former MTV digital exec Jason Hirschhorn and former AOLer Michael Jones. Late last year, another MTV digital-media executive, Courtney Holt, joined MySpace as the head of its new MySpace Music division.
A source with knowledge of the situation said that senior management was spared Tuesday's cuts.
Launching MySpace Music, which focuses on free streaming music supported by advertising, was a return to the company's roots: once a hub for indie band promotion and community, MySpace had grown massive before Facebook began to catch up to it in international and then U.S. traffic. Partnerships with the likes of Google and a prominent endorsement of the OpenSocial developer initiative didn't help it regain traction as a networking destination.
Holt told CNET News in March that MySpace Music's traffic was "huge." But record label executives--who are partners in the MySpace Music joint venture--reported dissatisfaction with the revenue it was generating.
Last update at 11:56 a.m. PT.
Disney's ABC Enterprises announced Thursday that it has entered into online-video joint venture Hulu, currently a partnership between NBC Universal, News Corp., and investor Providence Equity Partners.
This means that TV shows from Disney-owned channels like ABC, SoapNet, and ABC Family will be coming to Hulu. Among them are "Lost," "Grey's Anatomy," "Ugly Betty," and "Scrubs." There will also be Disney movies available on the ad-supported streaming video site, but a press release did not name any of them. Content will be available "soon," the press release explained.
Reports started to surface about a month ago that Disney was in talks to join Hulu.
Robert Iger, president and CEO of the Walt Disney Company, will take a seat on Hulu's board of directors, along with Anne Sweeney, co-chair of Disney Media Networks and president of the Disney/ABC Television Group, and Kevin Mayer, executive vice president of corporate strategy, business development, and technology at Disney.
ABC already streams a significant amount of television content on ABC.com, and Disney-owned television and video content was some of the first to make an appearance in the iTunes Store's video download section.
Apple CEO Steve Jobs is Disney's single biggest shareholder, having sold animation studio Pixar to the company in 2006.
This post was expanded at 8:15 a.m. PT.
Two new members have been added to the fresh lineup of MySpace's executive ranks, following the appointment of CEO Owen Van Natta last week.
Jason Hirschhorn, most recently president of Sling Media Entertainment and before that MTV Networks' chief digital officer, joins MySpace as its chief product officer. He's the second prominent MTV veteran to take on a role at the News Corp.-owned MySpace in the past year, following MySpace Music president Courtney Holt.
Hirschhorn is firmly on the digital-media and entertainment side of things, something that will invariably come into play as MySpace (ideally) restructures itself as an entertainment destination rather than a networking tool. At Sling, he was charged with the development of the SlingPlayer online video aggregator.
The other new MySpace hire comes from a more traditional Silicon Valley background: Michael Jones, who sold his start-up Userplane to AOL in 2006, joins the company as chief operating officer. MySpace is already familiar with Jones' work: it uses Userplane's chat technology for its Web-based chat client, MySpaceIM.
Both will be based in Los Angeles and report directly to Van Natta.
It's official: News Corp. has named former Facebook executive Owen Van Natta as MySpace's CEO, following reports on Thursday that an announcement was imminent. Van Natta's appointment is "effective immediately," a release from MySpace said.
Van Natta succeeds Chris DeWolfe, who stepped down from the post earlier this week, reportedly at the request of newly appointed News Corp. digital czar Jonathan Miller. DeWolfe will remain on the company's board.
Owen Van Natta
(Credit: Facebook, via All Things Digital)"I'm thrilled to have the privilege to pilot MySpace in what is sure to be an incredibly exciting and rewarding next chapter for the business," Van Natta said in a statement. "I feel honored to build upon the immeasurable achievements of the MySpace founders and look forward to working with Jon and the MySpace team to meet the challenges and make the most of the opportunities before us."
Van Natta served as chief operating officer of Facebook before he was shifted--some would say demoted--to the position of chief revenue officer and vice president of operations. He left in February 2008 and later took the CEO position at social music start-up Playlist.
John Sykes, a Playlist board member and one of the original MTV co-founders, will take over Van Natta's CEO role there. Van Natta will continue to be an adviser to the start-up--which is interesting, since it technically competes with the MySpace Music service.
"Owen combines a deep understanding of social networking, a keen business sense, and the operational experience to guide MySpace through its next phase of growth. I'm confident his leadership will be an invaluable asset," Miller said in a statement. "I plan to work closely with Owen to shape our long-term vision around this vibrant community that already attracts more than 130 million users worldwide."
Facebook, Van Natta's old employer, has eclipsed MySpace in worldwide traffic with now more than 200 million active users.
Van Natta's a proven dealmaker. During his tenure as chief revenue officer, Facebook chalked up that whopping $240 million investment from Microsoft. But here's where he might be lacking: entertainment industry cred. With a background at Amazon, Facebook, and several tech start-ups, Van Natta--who will be based in Los Angeles at MySpace's headquarters--probably isn't on the Hollywood circuit. MySpace needs those entertainment connections, some of which come naturally with its News Corp. ownership, because it has a much sunnier future as a pop-culture hub than a social-networking tool.
That said, it's a good first sign that under Van Natta's watch, Playlist started inking deals with major record labels in order to stave off its legal troubles.
This post was expanded at 10:35 a.m. PT.
Considering that AllThingsD's Kara Swisher has a very good track record of knowing Van Natta's whereabouts, we're going to take this one as solid. The announcement could come as early as Friday, Swisher wrote, and though there's no word on timing, we're guessing that it'll either be after the market closes or possibly held off until Monday.
Owen Van Natta
Van Natta rose to the tech world's upper ranks as chief operating officer of Facebook, a position he took after a stint at Amazon.com. He left just more than a year ago, either because of internal disputes with CEO Mark Zuckerberg or because he saw no chance that he'd earn the top spot himself anytime soon (or both). He was then reportedly in the running for the head job at MySpace's new music service and apparently withdrew his candidacy.
Right now, he's the CEO of Project Playlist, one of the many "social music" start-ups that is technically a competitor to MySpace Music, and he has been inking deals with record labels to keep away its persistent legal problems.
DeWolfe's departure from MySpace was announced earlier this week as part of a management shake-up that was likely initiated by Jonathan Miller, the new digital boss at MySpace parent company News Corp. There will likely be other departures and new executives, but AllThingsD said they won't be announced quite yet.
Van Natta probably wasn't the only candidate under consideration: there were hints that News Corp. was also looking internally, possibly at sales and marketing executive Jeff Berman.
Either way, MySpace is in need of some fresh ideas, as it continues to slide into second place behind Facebook.
Needless to say, MySpace is in a bit of a tight spot. The News Corp.-owned social network has been eclipsed in traffic by Facebook worldwide and may be close to losing its top spot in the U.S. And now, a management shakeup initiated by new News Corp. digital boss Jonathan Miller has seen the departure of CEO Chris DeWolfe and shuffling of president Tom Anderson's role.
Entrepreneur Jason Calacanis, who sold Weblogs Inc. to AOL when Miller was in charge over there, came up with a list of ten priorities for the incoming CEO. He's mostly right. But I think it's simpler than that: MySpace just has to put entertainment at the forefront of everything it does.
Facebook has won the social-networking battle, not to mention the reputation for tech cred, and no amount of developer-friendly initiatives is going to win that back for MySpace (a clear exception: social gaming, which is likely responsible for why MySpace's engagement metrics are notably better than Facebook's).
But MySpace has tech cred of a different sort. MySpace Music, the company's streaming audio service bolstered by investments from all the major record labels, is still a relatively new product but has been well-received. There are still loads of opportunities for this to grow more, from international expansion to merchandise and ticket sales. Some geeks are already impressed: When I was at Social Web FooCamp last weekend, one young entrepreneur told me that he didn't use MySpace as a social network, but as a music search engine.
MySpace Music, and surrounding entertainment content, should be at the center of the brand. The company has the opportunity--and the muscle--to fill the void of a mass-market entertainment power that MTV once held.
The first rule is that when it comes to entertainment content, MySpace can't settle for low quality or a poor fit. MySpace's first forays into original programming were notable misfires. "Quarterlife," which was distributed on MySpace as well as its own Web site, was a sleepy shoegazer better suited to the Sundance Channel. Faux-reality show "Roommates" was just tacky and poorly acted. Web audiences have become discerning enough so that they won't settle for public-access quality.
A couple of months ago, I went to one of MySpace's "secret shows" concerts, which featured singer Lily Allen at the Bowery Ballroom, a relatively small downtown venue in New York. I told one of my colleagues about it after the fact, and his response was, "Why does nobody know about these things?" If more people knew that logging into the right MySpace page at the right time could give you details about a cool free concert, I'm pretty sure there would be, well, more people logging into MySpace. There also wasn't nearly enough wielding of the MySpace brand at the show itself. It was one of those situations where a handful of stickers could've gone a long way in free advertising.
MTV in its heyday (and still, to an extent, today) understood the importance of in-real-life events in maintaining brand loyalty. "Secret shows" and movie screenings are part of that, but it can go even further. When I was growing up in the '90s, kids much cooler than myself would show up in Times Square to catch a glimpse of MTV's "Total Request Live" taping or to the "Beach House" that was set up in a different seaside town each summer. More recently, we've seen the success of Yelp parties: Rent a venue, invite avid users, and just let them hang out. They'll stick around online, too.
It's also got to be easy to find this stuff. MySpace's interface is so confusing to me that I've found it easier to discover new music through Apple's iTunes Store. Right now, half the home page is taken up by ads and the rest pertains to content ("Final Fantasy XIII" and "The Hills") that I have zero interest in. The site needs a real back-end overhaul, and maybe this is where one of Jason Calacanis' recommendations can come into play: Make some acquisitions. There are so many content discovery and recommendation apps out there, a few of which must be hungering for a buyout.
If people can be confident that MySpace is a reliable hub for finding insidery information about the latest in entertainment--fresh new bands, movie previews, the fall TV season, great Web video--that could be enough to get its momentum back. It might've started out with the tagline "a place for friends," but maybe the attitude should change to "a place to be cooler than your friends."
But, obviously, that wouldn't be the official tagline. Because then it'd be more like "a place for tools."
