News Corp.’s Rupert Murdoch Dinged in the Head, Bing’d in the Noggin

Rupert Murdoch (source: Reuters via Wikipedia)

It’s difficult to one-up Dana Blankenhorn’s simple pronouncement: Rupert Murdoch is the stupidest man in the world. Rather than one-up him, I’ll explain why I agree wholeheartedly with Dana that Murdoch, the owner and head honcho of News Corp. and its pathological progeny Fox News, is dinged in the head. Or perhaps, Bing’d in the noggin.

Most of you are already familiar with Murdoch’s news empire, including Fox News, Fox Sports and a mess of news papers and magazines. News Corp. bought the Dow Jones media empire, including the Wall Street Journal and Barron’s late in 2007, just as the entire news industry was beginning to tumble hard.

It’s not clear how Murdoch determined that search engines were parasitic, but he’s decided that outfits like Google are mooching News Corp. product and not paying for the use of this content.

This makes no sense whatsoever, does it? Readers go to Google News, scan for articles of interest, click on a link to an article of interest and presto, they are at the site of the actual news outlet, reading the content at that site and not at Google. How Murdoch came up with the notion that Google is mooching content I don’t know.

Let’s say for a moment that Fox News content didn’t appear in Google News at all. I would then pick from some other outlet, like Reuters or AP or the New York Times instead. Wouldn’t you do the same thing?

Murdoch believes that if News Corp. product wasn’t in that index of news, that a reader like me would go and hunt it down. Uh, no. Especially if there were plenty of other news links from which to choose at my current search engine.

More so if a less-than-adequate search program offered up links to News Corp.’s product.

Ergo, Murdoch is cracked if he thinks users like you and me are going to hunt down News Corp.’s crappy reporting at another search engine when the rest of the news around the entire globe is already available at a search engine we’re comfortable using on a daily basis. The same search engine which is the most popular in the world, I should add, with 65% of search engine market share.

So Mr. Murdoch bitched about the search engine parasites…and then the real parasites showed up. Software manufacturer and more recently search engine company Microsoft has now approached Murdoch about making its Johnny-come-lately search engine Bing the sole source for News Corp. product, offering to pay Murdoch for the questionable privilege of indexing News Corp.’s content.

This is Microsoft resorting to the tactic it uses best: it’s not only parasitic but a predator, and it’s trying to cut Google out of the picture as provider of news, just as it’s tried to cut out other competitors in software. It’s attempting to capitalize on Murdoch’s fundamental and monumental misunderstanding of the internet in order to position itself as the only place one can search and find News Corp.’s material.

Microsoft wants to differentiate its own search engine Bing from Google and all other search engines by becoming the sole source for News Corp. products and possibly other news providers. It’s a dangerous tack to take; it changes the overall complexion of Bing’s users, while not necessarily increasing the overall users it attracts.

The self-selecting circle of users who want News Corp. content may not be users who will increase the attractiveness of Microsoft. They’re not likely to be heavy news consumers. How does this actually increase revenues? Looking at the analytics of traffic for some of News Corp.’s sites, one sees that there is a tendency to stay in the family of products; how does this increase Bing’s marketshare for search?

News Corp. does not produce content which hasn’t been or can’t be reported by another outlet, and search engines only make a news providers’ product more available, they don’t "take" it. Without increasing availability to readers as part of search engine product, News Corp. will cut itself off from readers like me who wouldn’t otherwise bother to consume their products and would instead consume something else.

News Corp has also tried the paywall concept — WSJ and Barron’s offer full access to paid subscribers — and neither of them have really benefited from the paywall as much as as they’ve benefited from controversial content (a la op-eds by Karl Rove in WSJ, for example). Screening out users based on who’s paying them for content isn’t going to increase their readership. Making use of the internet’s inherent desire to share information is more likely drive up traffic, though.

WSJ’s regular base of business customers isn’t likely to change their consumption habits because WSJ’s public content moves behind a second Microsoft wall.

Ditto for Barron’s. (Jeebus, what sane person even bothers with Barron’s? Here’s a better business decision: stop the cannibalism of marketshare by members of the same corporate family and kill Barron’s, moving the brand inside WSJ if necessary.)

One wrinkle in this entire scenario is sports news. Sports is the most popular section in any news paper (sadly) and continues to be one of the most popular topics on the internet as well. It’s the predictable cash cow for News Corp. Will Murdoch take Fox Sports into that Microsoft walled garden? And how quickly would other venues fill the void left if this happens?

But again, the hard core consumers of Fox Sports aren’t necessarily big news consumers…not certain there would be an uptick in news revenue with this possible move, and probably not a big uptick in Bing-originated searches.

And of course, while Microsoft and News Corp are expending resources examining a possible tie-up, Google is working on a multitude of game-changing products. Read journalist and critic Jeff Jarvis about Google Wave as a news tool — and then think about the recent announcement of Google’s new Chrome OS, only a handful of months after the release of its Chrome browser. Imagine an OS which allows availability of a device in seven seconds or less, roughly the same time as a cell phone start-up.

Now imagine beginning to read news on a handheld reader-like device in less than seven seconds.

Did I mention the chatter about the anticipated Google Phone which is expected in 1Q2010 with a forecast plan cost of $20 a month?

I suspect Murdoch will deeply regret News Corp. not being that first thing read at seven seconds after boot-up or opening a smartphone display.

Some have asked whether Microsoft went wide with this approach to become the sole source indexing search engine for other news outlets. They may be doing that now, but based on a timeline of events, I think they moved only after they heard Murdoch bitching about Google; that was enough to get Microsoft to jump into action and set a competitive strategy in motion. There was no other chatter about Microsoft’s Bing soliciting news outlets until after Murdoch’s rant about Google and parasitic behavior.

Microsoft has been a very reactive business for years now, with the exception of their Xbox products. One might argue that Microsoft’s business model has always been reactive rather than proactive, relying on being not a first mover and innovator like Apple, but a late adopter which excels at incremental improvements and at aggressively pursuing ubiquity on the desktop.

An exclusive hook-up between News Corp. and Microsoft is huge opportunity for Reuters, Bloomberg and other outlets to pick up business readers as their visibility would immediately increase over WSJ on Google. Ditto for other magazine-like outlets like Financial Times. Every News Corp. piece not on the front page of is a pick-up for click-through traffic, or as Google increasingly saturates smartphone and other communication devices, a slot for tap-through traffic.

WSJ as with the rest of News Corp products also doesn’t appear to be moving aggressively away from the dead tree model towards an e-reader model. As long as they ignore the potential for reader lock-in based on device usage, they do so at the increasing risk of loss of marketshare and relevance.

The failing model of Fox Business News tells you that business people want real news with hard data. And once they get out of work, business people are you and me — we want real news brought to our door step, not celebrity detritus passed off as news we are forced to hunt down. Who needs more personality-driven crap like op-eds by Karl Rove? My investment portfolio and retirement plans certainly don’t need such crap.

Until Murdoch understands this and gets a grip on how the internet works, he’s dinged in the head. Bing’d, even.

[Disclosure: I own a small amount of Google and Apple stock, held in my kids’ college fund. I have a handful of shares of AT&T that I can’t seem to make go away. I don’t own stock in any other company mentioned in this article. I also consult on social media and technology integration; in other words, I am betting the farm on this stuff, trying to make a living out of reading techie tea leaves and divining the near-term future of geekery.]

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