Category: Media

I can’t remember the last time the media world was as excited about a business deal that may or may not be consummated as the one involving Microsoft and Rupert Murdoch. The reason, I think, is three-fold.

First, it potentially moves us beyond the tired old debate about pay walls (I say “potentially,” because we don’t know if Murdoch will give up on that misbegotten notion).

Second, it could provide an answer to the question of who should pay whom, and how.

Third, it could represent a monetary boost for paid journalism at a moment when the profession is in the midst of an existential crisis.

In simple terms, here’s how the deal might work. Microsoft is said to be offering to pay Murdoch and other newspaper publishers (and you’d need a lot of them; Rupe can’t do this alone) to make their sites invisible to Google, a simple matter that involves inserting a line of code. Thus if you wanted to search for a news story about, say, President Obama’s upcoming speech on Afghanistan, you would have use Microsoft’s Bing instead of Google.

Bing News would compete with Google’s automatically assembled Google News service. But, unlike Google, Microsoft would share advertising revenues from Bing News with the news organizations to which it is linking.

To be sure, Google News is the most benign of aggregators. It places no advertising on its home page. That’s important because it’s a customizable substitute front page. Most people read a news site by scanning headlines and ledes, and only occasionally clicking on a story. Thus, if Google were to try to make money from the Google News home page, it could rightly be accused of stealing the most valuable parts of newspaper stories and profiting from that theft. (And, as we know, there are aggregators that do precisely that. As I’ve argued before, Michael Wolff’s Newser may be the most blatant.)

If you search Google News, you will be shown ads related to what you’re looking for. But as Howard Owens has pointed out, if you are searching for a news story on a particular topic, then you are going to click through. Those are valuable readers whom Google is sending to news organizations. And, as Jeff Jarvis argues, it’s not Google’s fault if newspaper executives haven’t been able to figure out how to monetize the audience Google is sending to them.

With that bit of background out of the way, let’s turn this on its head. One of the things about Internet commerce that makes for such fascinating — and frustrating — debate is that it’s unclear which direction the money should be moving in. Even though Google has attempted to step lightly with its news service, Murdoch and some other news executives argue that Google should share ad revenues generated by Google News.

But imagine, if you will, an alternative universe in which newspaper sites were rolling in advertising revenues from readers Google sent their way, but in which Google itself couldn’t find a way to make any money. (Such a scenario requires you to believe a number of ridiculous things, but never mind.) Can you imagine what the debate would be? You’d hear demands that cash-fattened newspaper owners share some of their newly gotten wealth with Google. You’d hear threats that Google would exclude news sites that refused.

My point is that there isn’t really any underlying principle as to who ought to pay for what online. Rather, the debate is driven by who’s making money, who’s losing money and — here’s where we get back to Microsoft — the business model of any particular Internet company.

What is Microsoft’s business interest with respect to Bing? Simply this: to build market share, establishing Bing as a serious search alternative to Google. Bing has a long way to go, with 10 percent of the market to Google’s 65 percent. That said, Bing has received good reviews since its debut earlier this year. And it’s really the only search engine to emerge as any kind of rival to Google pretty much since Google slipped into view in the late 1990s.

Bing News, as a partner of news sites rather than a rival, would have some advantages over Google News. The biggest would be that it wouldn’t have to pussyfoot around with regard to advertising. Since it would be sharing revenue, it could assemble an ad-laden home page, and make its search results more advertising-driven than Google News’ are.

Since it would be sharing those revenues, the news organizations, rather than complain, would be cheering Microsoft on. And if users came to understand that they had to visit Bing in order to search, say, the world’s 100 or so biggest and best newspapers, then Bing would quickly gain market share at Google’s expense.

Sadly, this would represent a significant setback to Google’s vision of indexing all the world’s knowledge. But there has always been an inherent tension in leaving it to a private corporation to carry out such a utopian plan. Look at the ongoing battle over Google Books, which would benefit everyone, but none more than Google.

It would also represent business as usual for Microsoft, which dominated the 1980s and ’90s not by offering more to its customers but by crippling its competitors. This is a company that, as legend would have it, built market share for its spreadsheet, Excel, by rewriting MS-DOS — its Windows precursor — so that the leading program, Lotus 1-2-3, wouldn’t run properly. “The job’s not done till Lotus won’t run” is one variation of the supposed battle cry heard in Redmond. Paying newspapers to pull out of Google is just the latest iteration of that theme.

But will it work? Is there any way a Bing News service could generate the sort of advertising revenue that would make up for a significant chunk of what the traditional media have lost? Somehow it seems doubtful. Still, it strikes me as a far more worthy experiment than whatever Steven Brill has been cooking up with his paid-content scheme for lo these many months. I hope we’ll get a chance to see how this all plays out.