Rupert Murdoch, chairman and managing director of what is the largest producer of news in the English speaking world, News Corp, has previously clearly stated his intentions of making all their news services paywalled. Users will in the future have to pay a monthly subscription to gain access to news featured on News Corp’s sites.
This week, an announcement was made indicating that Murdoch is currently in negations with (surprise, surprise) Microsoft to block Google from indexing News Corp sites, giving exclusive rights of indexing to the Microsoft-owned search engine Bing. Rights for which Microsoft is certain to pay a graceful amount to acquire. With Bing responsible for generating only about 9.9 percent of the traffic to News Corp’s sites, Murdoch motivates the deal by claiming that visitors coming to their sites from Google do not significantly contribute to generation of advertisement revenue. Murdoch comments:
“We’d rather have fewer people coming to our website, but paying.”
Once again we see Microsoft’s strategy of gaining market share through raw economic power and exclusive deals, carefully constructed to strike the competition where it hurts. While other companies strive towards success through vision and innovation, these two giants take a major leap backwards to a business model best suited for a different age. If you want people to use your search engine do so through superior search technology, not through buying exclusive rights of indexing!
Although this approach may have worked for Microsoft in the past, this time I have a strong feeling that the forces these companies are up against may prove too strong. The Google business model is based on an enormous and diverse arsenal of targeted advertisement. News only constitutes a minor, although important, share. A large amount of news sites not under News Corps will still be available from Google.
The proposed deal is not only stupid, it is undemocratic. Free online news has given a whole world access to breaking news with potentially important impacts on their own lives. Paywall news services will limits this access to the fraction of the world population that can afford it. Furthermore, any company operating on the web knows that it is either you bring traffic to your site or you die. Murdock’s statement about it being better with less but paying traffic, shows an outdated and inwards looking way of thinking about new media technology.
Google CEO Eric Schmidt recently commented on the arrival of the Bing search engine: “We are spending all of our time on exactly what we’ve always done, which is innovation. I don’t think Bing’s arrival has changed what we’re doing. We are about search, we’re about making things enormously successful, by virtue of innovation.”