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.
So should News Corp. buy Twitter? That's what Vanity Fair columnist and pundit Michael Wolff speculated this week in an article on Newser.com, the aggregation site he founded.
"There may not be anything less than Twitter that can distract Wall Street from News Corp.'s stubborn and, at this point, unnatural newspaper fetish," Wolff wrote, "and, as well, convince it, for one last hurrah, that (CEO Rupert Murdoch) isn't...well, gone."
The catalyst for Wolff's recommendation was the recent hire of former AOL chief Jon Miller as head of News Corp.'s digital projects. Miller's venture capital experience would make him an ideal candidate to spearhead an aggressive M&A strategy, and there's no more buzzworthy company than Twitter these days. On the flip side, there really isn't an obvious fit for it within the company, and Twitter still has yet to produce a viable strategy for long-term profits.
Wolff, who wrote this year's Murdoch biography "The Man Who Owns The News," got a whole lot of tech blog attention for insisting in an interview that "MySpace is for f***ing cretins" and predicted a swift doom for the social network. In Monday's brief Newser piece, he called Murdoch "the world's least savvy Internet guy" and said that News Corp. has "run (MySpace) into the ground" since acquiring its parent company Intermix Media for $580 million in 2005.
There are some holes in his argument, to say the least. With the help of News Corp.'s big-media muscle, MySpace was able to launch its MySpace Music joint venture last year, and while it certainly made a few missteps that led to Facebook eclipsing it in worldwide traffic, it's not quite time to stick a fork in it. User engagement is better than Facebook's, ComScore found, and it's had better luck with advertising than Facebook has.
But Wolff may have added motives to want to rip into News Corp.'s digital strategy and suggest that the long-shot possibility that it would buy Twitter is its only clear path to dot-com salvation. His beef with News Corp. has turned into a full-out feud, and the Page Six gossip section of the Murdoch-owned New York Post has recently been making a big deal of his personal life--always getting in a jab about his lack of hair. Ouch.
Rupert Murdoch plans to give away the digital version of the Wall Street Journal, making News Corp. the latest company to give up on paid subscriptions.
"We are studying it and we expect to make that free," Murdoch was quoted by the Associated Press as he spoke to a group of investors in Australia. He said that "instead of having one million (subscribers)," the company will receive readers "in every corner of the earth."
Murdoch is banking that a free model for WSJ.com, which recently announced that it had topped the 1 million-subscriber mark, will send readership skyrocketing and that advertisers will then flock to the site.
According to the AP, the Journal's subscribers generated about $50 million in annual revenue.
Few online services have succeeded at making a go of paid subscriptions but the Journal was widely considered to be at the head of the pack. In September, The New York Times stopped trying to sell subscriptions to premium content .
Here's a rumor we didn't see coming. The U.K.'s The Times is reporting that News Corp., the Rupert Murdoch-helmed company that purchased MySpace in 2005 for $580 million, may be willing to trade it. According to Times writer Dan Sabbagh's article, News Corp. is mulling a swap of MySpace to Yahoo in exchange for a 25 percent stake in the dot-com.
Interestingly enough, The Times is itself owned by News Corp. The parent company is allegedly "interested in a deal even if it means losing some control of MySpace because it would give the media group exposure to a far larger internet-based business," the story reads. Sabbagh notes, however, that the purported talks may fall through now that Yahoo's chief executive, Terry Semel, has stepped down from his post and been replaced by company co-founder Jerry Yang.
According to the Times, News Corp. mogul Murdoch has acknowledged that MySpace's most promising potential rival, Facebook, has been gaining ground in the wake of recent growth fueled by its recently launched developer platform. Yahoo, likewise, is allegedly interested in breaking into the social networking arena, where it currently is not a major player.
News Corp. is simultaneously attempting a $5 billion bid for fellow media company Dow Jones. At the same time, rumors that Yahoo would merge with Microsoft turned out to be unsubstantiated.
UPDATE: Both MySpace and Yahoo declined to comment on the matter.
MySpace is preparing to launch an integrated news service--with self-aggregating content and social bookmarking--in the coming weeks. MySpace members will be able to post the stories on their profiles, discuss, promote, and submit their own written content to be seen and ranked by other MySpace users (see NewsVine). The new service is reminiscent of Digg and del.icio.us, with social bookmarking for news stories that can be promoted with user voting.
It was only a matter of time before this happened, considering MySpace has been owned by news mogul Rupert Murdoch since 2005 and gets 230,000 new registered users a day--arguably more than most Internet news sites. As TechCrunch notes, the move to buy news aggregator service Newroo last year was not without purpose. The same technology likely will be in place for feeding stories to the site throughout the day.
Membership and usage are two things, but this move is a smart one on MySpace's part. Many MySpace users come online to trade messages with friends and browse profiles. Getting news stories on profiles means a lot of eyes to potentially read them. Not to mention, if there's a reason to come back several times a day to get news and share things with others, there's more of a draw to the site beyond profiles and band spam.
Now, the big question is what this thing is going to look like. If it's anything like the rest of MySpace, with slow page loads, flashing banner ads, and Web 1.0 design, you won't catch me using it.
Update: When asked about the new service, a representative for MySpace responded: "We do not comment on company rumors or speculation regarding our product pipeline."
>> Senator to propose surveillance of illegal images. John McCain wants to give surveillance duty to your Internet service provider and to Web sites to crack down on child pornography. All questionable images would be flagged and sent to the authorities with your IP address. (CNET News.com)
>> Flip launches. Conde Nast's answer to MySpace and other social networks. The service, aimed at teenage girls, lets you create a scrapbook of sorts in the form of a flip book. Your flip book can then be shared on other services. (Mashable)
>> Gmail leaves beta. Lately Google products leaving beta have gotten some bad press, but Gmail seems to have weathered the storm nicely. Gmail launched in April, 2004 with a groundbreaking 1GB of storage, and now offers nearly three times that much. The service has also lifted its "by invitation only" means of joining, a policy that spurned Web sites where people could trade invites for all sorts of things with eager Gmail hopefuls. (CNET News.com)
>> Amazon Unbox video downloads coming to TiVo. First you got podcasts; now, you can watch movies on your TiVo using Amazon's Unbox movie download service. Like purchasing TV shows on Microsoft's movie service for the Xbox 360, media can be re-downloaded an unlimited number of times if you wish to clear some of that valuable hard-drive space. (Crave)
>> Real-world success with virtual goods. Sony says that selling virtual goods for actual currency is a good thing--as long as it's done through an official, regulated store. Sony set-up its own store on several Everquest II game servers to allow transactions for virtual goods. The store earned Sony over $250,000 dollars. (CNET News.com)
>> Antivirus expert: 'Ransomware' on the rise. Gone are the days of simple Trojans and viruses. The next generation of malware is called "Ransomware," and it works when crafty hackers hijack your data, encrypt it, and hold it hostage for a fee. Once aimed at large companies, normal folks like you and me will be the new targets for this attack. (CNET News.com)
>> Vodafone in deal to access MySpace via mobiles. It's been done through Cingular, Helio and probably any other phone with a mobile browser, but Vodafone is joining the fray by shipping phones with the MySpace mobile application pre-installed. (CNET News.com)
-- Google expands video ad test. Not to be confused with ads placed in user-generated videos on Google Video and YouTube, these video ads from Google will be embedded videos on the page that users must click on to begin. Google is now partnering with content providers such as The Wall Street Journal and Epicurious.com to bring Adsense video ads. (CNET News.com)
-- AT&T to ramp up IPTV rollouts. While Joost and Babelgum have made some noise among the blogs, the prospect of watching IPTV programming on an actual TV is coming closer to being a reality. AT&T is planning on getting IPTV to eight million homes by the end of the year. (CNET News.com)
-- MySpace confirms upcoming launch of Mexican version. Rupert Murdoch wants to say "hola" to the one million-plus MySpace users from Mexico who will have their own localized version of the site in just a few weeks. (CNET News.com)
--Netscape 9 standalone browser to integrate social bookmarking features. The once dominant browser that gave birth to the now popular Firefox is getting a facelift and an upgrade with some tie-ins to the Netscape.com democratic news service. Users will be able to check mail, friend activity, and add stories to the Netscape.com home page with integrated browser buttons. (The Netscape Blog)
(Credit:
CNET Networks)
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