Newspapers are dead and Murdoch’s wink

NEWSPAPERS as we know them are dead. And traditional media (read newspapers) finds itself to be in great dilemma when it comes to internet. On the one hand, Search is an important source of traffic for their sites. On the other hand, Search prevents them from making decent money online – by massively fragmenting traffic, by undermining brand power, and by turning news stories into fungible commodities. Individual newspapers can’t live with Google, but they can’t live without it either.

When it comes to Google and other internet media, newspapers face a sort of prisoners’ dilemma. If one of them escapes, their competitors will pick up the traffic they lose. But if all of them stay, none of them will ever get enough traffic to make sufficient money. So they all stay in the prison, occasionally yelling insults at their jailer through the bars on the door.

Earlier last month, Murdoch in an interview to Sky talked about de-indexing from Google or at the least signaled. Murdoch seemed to be saying – and was widely reported to have said – that News Corp is planning to block Google from indexing its content. But when you listen to his full answer, in which he confuses opting out of Google’s search engine with raising pay walls on sites, it’s hard to know what he was actually intending to say.  But inadvertent or not, Murdoch’s suggestion that he’ll pull News Corp content out of Google’s database could turn out to be a brilliant signaling strategy.


What Murdoch effectively did in his interview with Sky News was to send a signal to other newspaper companies: We’ll opt out if you’ll opt out. Murdoch positioned himself as the would-be ringleader of a massive jailbreak, without actually risking a jailbreak himself.


Microsoft has apparently responded to the signal by offering to pay News Corp to make Bing the exclusive search engine for its content. Microsoft doesn’t have a lot of weapons to use against Google in the search business, but getting prominent news organizations to block Google would be a very powerful weapon. (Ballmer would be more than happy to reduce the basic profitability of the search business, as that would inflict far more damage on Google than on Microsoft.)


Faced with a large-scale loss of professional news stories from its search engine, Google would likely have little choice but to begin paying sites to index their content. That would be a nightmare scenario for Google – and a dream come true for newspapers and other big content producers.


Of course, for now this is all just speculation. The odds are that none of it will come to pass. The idea that newspapers might come together to pursue a radical and risky strategy seems far-fetched. Then again, maybe the time has finally come for newspapers to take a deep collective breath and apply the leverage they still hold. They don’t have a whole lot left to lose.


In my opinion, News Corp. de-indexing Google would be a mosquito bite on an elephant’s ass. Unnoticed by Google or by the audience. For there will always be – as Murdoch laments – free competitors: the BBC and Australian Broadcasting Corp, which he and his son complain about, not to mention the Guardian, the Telegraph, NPR, CBC, and any sensible news organization worldwide.


This silliness is emblematic of the end of the Gutenberg age, the industrial age, the age of control, the age of centralization, Murdoch’s age.


Like Rahul, I also believe in internet as a great leveler.


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