Microsoft and News Corp potential alliance, against the open Web

By on November 23, 2009, 11:22 AM
On several occasions over the last few months, News Corp chairman, Rupert Murdoch has been quoted hinting at changes he foresees for his high-profile Web properties. Most notably the Wall Street Journal and its network of sites, Murdoch believes in the paid subscription model for online properties and that aggregation sites like Google News are hurting not only newspapers, but online news sources like his own.

Now it appears that Microsoft is willing to play along, after the Financial Times revealed a potential pact between the two. As obnoxious as it sounds, the deal would center on having WSJ's sites delisted from Google's index, favoring Bing search results instead.

According to the report, Microsoft has also approached other big online publishers, essentially offering a way to monetize by exclusively choosing their search engine over its competitors. This could mean business to newspapers that have struggled so far in bringing the sufficient revenues online to compensate for the decline seen in their standard local newspaper subscriptions.

That said, as much as Microsoft is willing to invest on competing with Google, we see this kind of pact bringing more threat to the openness of the Web than anything else.




User Comments: 17

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Guest said:

And they will fail horribly.

ECHTECH said:

Why isolate yourself or your company to one search engine? There are thousands and thousands of search engines out there and of course most people use the popular one's: Google, Bing, Yahoo, but there are all those small ones that people still use and any smart company would not limit itself to one avenue of finding it. Sounds like a VERY DUMB IDEA!!! Don't you want as many people as possible o be able to find your company as easily as possible? Marketing 101: the more calls you make the more sales you make.

fwilliams said:

Everyone knows Microsoft is superior in every way.

That is why they have to pay others to use their products they stole from someone else in the first place.

mdeguzis said:

^ Mac fanboy :)

Clrabbit said:

Paid news!?

I don't pay for BroadCast TV news and I've been reading online news free sense I was 4y.

I've seen what paid news, There's more ad's, and most of the time its dumbed down and less informative then what you can find for free. If they all switch to one search engine I hope they just stop getting Internet traffic and die out.

I really doubt hardly any body from my generation or after will be willing to out right pay for news.

RozSummer said:

Rather than simply defaulting to the view that news, analysis and opinion written by major news organizations should be free to everyone, Murdoch and Ballmer are exploring what looks on the surface to be an interesting model in an attempt to find new ways of simultaneously monetizing content and driving more web traffic to Bing. Murdoch recognizes his content, in all its forms, drives a lot of web traffic, some of it to his site, but in many cases the content ends up on sites where he gets no credit whatsoever, and therefore no revenue in terms of CPM value. In effect, News Corp is choosing a distribution partner that will value the content News Corp delivers, establishing a revenue stream that more fairly compensates them for the cost of creating it and the brand value News Corp has in the news industry. I look at this as a comprehensive content control and pricing strategy: If one assumes News Corp will begin putting pay-walls around its content (which they have done), and then near-simultaneously choosing a partner like Microsoft/Bing to control distribution of that content in a paid-distribution deal, then you have to call into question the ongoing justification of how the "fair use" copyright law allows Google and other search engines to use that content to drive traffic to their own sites and monetize it without paying a distribution fee for doing so. Indeed, Google draws lots of eyeballs to a site, but if all of a sudden The Wall Street Journal, Barron's, The New York Post, Boston Herald and a slew of international newspapers' content was available only on Bing, then that will surely help drive adoption of Bing as a legitimate -- and arguably better -- source of news stories than Google. No doubt it would take time to see the impact, but if News Corp cut an affiliate marketing and distribution deal with Microsoft, News Corp stands to make many times the revenue they would make compared to the traffic driven to them from other search engines. If this deal even smells like it might work, Microsoft should be in front of every major news publisher, including Reuters and AP, with a similar deal; there are only about 20 major media companies in the US that really matter, so not very hard to do if the deal gives content provides a good cut (say, 40% to 60%) of the revenues. Google's only response would be to try to compete on price, giving even better distribution deals to content providers -- a pretty darn scary situation if you have to start sharing that 67% gross profit margin with a stock price at ~$580/share. If Microsoft were to really get aggressive with this strategy, Ballmer could use Microsoft's cash-generating machines (the OS's and Apps side of its business) to vastly subsidize content compensation deals until the traffic pulled from Google created enough advertising revenue to reach a sustainable business model. How much would it take? I figure $10 to $15 billion given the current state of the newspaper/media industry, perhaps $25 billion worldwide. While not cheap, it would be a full frontal assault on Google's use of content and in the process change the definition of what "fair use" copyright means.

Wendig0 Wendig0, TechSpot Paladin, said:

ECHTECH and the first guest poster are absolutely correct. Then again, getting the WSJ off my search results is fine by me. Good riddance.

tonylukac said:

Do people really use search engines for news when they dont know the titles of the articles to search for? I just goto the Chicago Tribune and Sun Times site for my news. Perhaps in one in a million times when there is some large story I use a search engine, but not normally.

Guest said:

Interesting development. This may really be a start of a trend. Or not.

Guest said:

Murdock is hoping this will cause others to follow suit...

However I do hope this turn in to a lose lose situation for Murdock's Media empire and Microsoft.

ColdPreacher said:

This will just create more people to gather there news from other sources, probably will create more sources as well.

JudaZ said:

locking out users from content , and making people NOT want to use Bing....how can this be a good thing for MS?

Microsoft, just one advice, and its free.

Run like hell from News Corp .

Why would i want to pay for news on a site, when I can get it from another source ...that is not totally biast as well, for free???

And why would you want you site removed from the the worlds largest search engine??

Is Rupert Murdock lost his mind?

...why not just drop the tech altogether ,go back to selling paper magazines at corners instead?

....but why would Micrsoft, that finally made a lot of good stuff latelty want to jump on to this insane venture?

Whats in it for them? This will not make Bing more attractive...it will make it less attractive!

....have you already given up on bing, microsoft?

...and how are you gonna stay unindexed from google? ...sure you can do your little robot tag, but google will still have you in their db .... and you cant block it no matter what you want.

..so google will still show these now, usless news sites in their index....MS will probably realize this...and back out of the deal.... or they will be stupid enough to sign up on it...gaining nothing but bad press. ... and people wil lstil luse google... find the news sites...realizing their is no use for it anymore...and finding another news source online..via google.

Murdock is big, but his not "lord of the world of news jamesbondstyle" ...

their are other news sources out there.....

JudaZ said:

Personally i use sites like observeheadlines.com or digg.com that collect news from diffrent sources, i dont commonly use a search engine anyways for news.

Either that or i just go to the newssites directly. Online news sites tried closing down content and trying to charge for their "premium" content in the past...and they faild...miserably....they lost a lot of visitors, and the free open sites gaind a lot of new visitors....

will not work this time either.

GACrabill said:

It was only a matter of time before someone would try this approach. And it doesn't surprise me that its Microsoft and Murdoch .... two of the greediest entities in the business world.

On the other hand, Google has no respect for other people's copyrighted content and thinks everything should be available to everyone for free.

There will have to be a middle ground somewhere down the line but I can't see very many folks converting to Bing just to get to a Murdoch business.

Though I am sure that Microsoft and Murdoch will claim that their collaboration was a total success and some others will follow.

But I won't be switching to a Microsoft product when there are other alternatives. Long live Google !!

lupinnktp said:

i will stick to google nonetheless. why the attempt to flock together to support a monopoly? well, it feels good associating with the big guy, perhaps, but what if it means turning against the world?

gruesomeA said:

If this actually happens and Microsoft begins persuading companies to remove themselves from other search engines, I plan on no longer using Bing, not that I do that much now, and I will also boycott the companies.

Long live net neutrality

Guest said:

I think this whole thing is retarded... there should be laws against that... what ever happened to free press? Or the 1st amendment... this is a violation of our rights used for monetary gain.

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