Microsoft and Newscorp

So this is interesting.  With Murdoch making noise about dropping out of Google lately, its not surprising that the newest search engine in town might be willing to fluff up a soft landing place for him.  Looks like Microsoft is willing to pay for access to old media content.  Could Google be in trouble? 

Let’s recap.  You have old media with a business model that used to generate huge profits from content – not because the content was in high demand by the readers – but because they had a lock on a very effective (if very expensive) distribution system.  Old media used the system to advertise, as well as distribute content.  All was well for about 100 years.

Then the Internets arrived.  Now anyone can write and publish content that reaches a potentially huge audience for pennies.  How to advertise using that next generation system?  Enter Google.

This leaves Newscorp et. al. with a very expensive alternative that nobody wants to pay for.  See CraigsList vs. the classified section, for example.  What people originally wanted was to hear the news over their back fence for free.  What they ended up paying for to get it was a massive profit machine and a steampunk internet constructed of bits of cheap paper, gigantic Gutenberg presses, newspaper boys, and Jimmy Olsen’s. 

You can’t continue to monetize that dying monstrosity with micro-payments and pay walls. 

What you can do to help pay for it, however, is to get Steve Ballmer to drop loads of cash in your pocket as he feuds with his search engine nemesis, Google.  And trust me folks, Ballmer has no choice.  Google is going for Microsoft’s jugular.

What will happen?  The only company in this menage a trois that has a firm grasp on a 21st century business strategy is Google.  Microsoft and Newscorp will still be engaged in trying to pluck coins out of each others pockets when the meteor strikes.

“Microsoft To Pay Content Providers to ‘De-index’ from Google”

It is no secret that Microsoft is doing whatever it can to eat away at Google’s immense market share of the search market, with Bing being its most ambitious effort yet. Well, it seems the battle just got a whole lot dirtier, as The Financial Times has uncovered news that Microsoft has approached several news content providers, offering them money if they “de-index” their sites from Google.

Update:  Seth Godin puts a fine point on the matter.   See his post to read why the following assertion is obviously true.  Unless, of course, you’re Steve Ballmer, looking to pay good money to hose up Google (instead of running a top flight search engine).  A strategy that reminds me of the time that Microsoft funded SCO allowing it to bring a lawsuit against IBM for Linux copyright violations.Seth’s Blog: Rupert Murdoch has it backwards

You don’t charge the search engines to send people to articles on your site, you pay them.

Published in: on November 23, 2009 at 5:55 pm  Comments (1)  

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  1. […] this well-written and interesting piece of argument about the end of the old model of news from Scotsman on a horse: You can’t continue to monetize that dying monstrosity [newspapers/old media] with micro-payments […]

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