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I can’t see many newspapers blocking Google

You may have seen that Murdoch is talking about how Google and others are stealing from the newspaper industry:

The people who just simply pick up everything and run with it, and steal our stories. We say they steal our stories — they just take them without payment. There’s Google, there’s Microsoft, Ask.com … there’s a whole lot of people.

This led to Jason Calacanis yesterday suggesting that Bing should go to the top news sites and offer them a sweet deal to be their exclusive search partner and block Google:

I put forth a simple strategy for Microsoft to pursue with Bing in which they would go to content providers like the New York Times or Wall Street Journal and offer them 50% more revenue then they are currently getting from Google search referrals to be exclusively indexed in Bing….

I can’t see that happening.  As Bill Tancer at Hitwise points out Google drives more traffic to them, and as Danny Sullivan at Search Engine Land argues it is hard to see the maths justifying large enough amounts of cash flowing to make this worthwhile for both sides.

I think that what we are seeing here is another example of the internet forcing price transparency on the different components of a previously integrated product/service bundle.

imageWe are witnessing something similar here in the UK where Dixons are running an amusing set of poster ads advising customers to go to high end retail to get human advice on product before buying it cheaply at dixons.co.uk (see inset, for those that don’t know London the yellow colouring tells you they are talking about Selfridges).  This is an attempt to make explicit the cost of the advice as distinct from the product – two things that Selfridges (and others) have traditionally not wanted to price separately.

In the case of news the bundle has traditionally been headline/short summary and detailed story.  What we are learning is that from a consumer perspective most of the value is in the headline.  Unfortunately this is the part of the bundle that is most commoditised and now that headlines are widely available separately from the more detailed stories most of us are choosing not to read the detail very often.  This is unfortunate for the revenues of the news industry which has previously succeeded in getting us to pay for the detail and the headline together in a single bundle.

The result will be that as a result of the internet the news industry shrinks significantly.

AND – this trend will be exacerbated by the economics of free.

Supporting evidence for this view comes from the fact that news aggregators like Techmeme report that 50%+ of their visitors only read the headlines/summaries and don’t click through to the underlying story.

  • http://twitter.com/Basti Bastian Lehmann

    Hi Nick,

    i think you're onto something. I replied to Jason's mail last night, telling him that i see some similarities to the deals Twitter and Facebook made with Microsoft and Google. Murdoch obviously thinks that Newscorp’s content is worth a lot. But the fundamental question is, how much value do traditional media companies still provide today and in the future? Give the fact that all we see is protectionism on one side and new ideas to gather, distribute (information) and create news on the other. For example:

    - The real-time web beats any newswire service
    - Bloggers are often better curators than professional journalists, etc.

    In the Newscorp/Google debate i can see two scenarios:

    1. Newscorp blocks Google’s search spiders, Bing pays for access, people start using Bing, and in return Google also ends up paying. This basically means, that the web as we know it will change drastically. More and more content provider and media companies will immediately try the same.

    2. Newscorp blocks Google’s search spiders, Bing pays for access, but Google doesn’t care and neither does anyone else. In which case, we at least know that the future of online news is not Big Media Co, but potentially a mixture of hubs, bloggers and curators.

    I like the second scenario a lot, mostly because i can see some great potential for entrepreneurs.

  • http://www.theequitykicker.com brisbourne

    Hey Bastian – I think and hope we will end up with your scenario 2. Not least because scenario one would threaten the notion of an open web as we know it. If Google was paying Newscorp would they still feel the same way about when choosing between serving up a WSJ page and a page from someone they weren't paying, like this blog as an example?

  • http://twitter.com/FundingPartners Funding Partnership

    Very interesting article. I've been eagerly waiting to comment on the Dixon ads, which I bitterly dislike. John Lewis and Selfridges have spent years building a respectable brand through their high level of customer service and for Dixons to directly attack them in this way I find it quite distasteful.

    As the rest of your article suggests, we've moved into an ever increasing commoditized world where it is becoming harder and harder to offer perceived value. We regularly meet companies with what seem like neat businesses, but no realistic commercial models.

    The next chapter for the news industry has arrived and I don't think anyone can truly predict how it will look in years to come. I do however agree with Bastian that this particular scenario with Bing will likely pan out in one of the directions that he suggests. I like Google, but I think there is lack of true healthy competition for them at the moment, I would love to see more oportunities for entrepreneurs in this space.

  • http://www.theequitykicker.com brisbourne

    I also would love to see more competition for Google.

  • http://www.gamesbrief.com/ Nicholas Lovell

    Hello Nic,

    The point about the death of news/value of headlines is also interesting when you look at the difference between how TechCrunch broke the story (through traditional investigative journalism) of scammy virtual goods offers while the New York Times missed the whole point in a shoddy and mind-boggling way (see the Fake Steve Jobs for the full analysis: http://www.fakesteve.net/2009/11/why-mainstream…)

    I guess this says to me that people do still value stories, and that there is a role for investigative journalists. It's just not clear that the infrastructure of old-style newspapers are capable of providing what people still value.

  • http://www.theequitykicker.com brisbourne

    I think that's right. TC, Huff Post and others are building value from news beyond the headline in a way that is radically different and maybe inaccessible to traditional newspapers.

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