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December 3, 2009

The Phoney War: Google and News Corp make up?

The Phoney War, also referred to as the Twilight War by Winston Churchill, was the description given to first few months in World War II following the German invasion of Poland, marked by a lack of military operations in Europe. The same could perhaps be said of News Corp in 2009.

Only last week we heard of an “exclusive deal” to list News Corp’s content on Microsoft’s Bing, but today a happy compromise has been suggested by the plaintiff. To many, dropping the company’s content from Google’s indexes was slated as a septuagenarian not understanding the concept behind the internet, while Hooray Henry newspaper chiefs curtsied in front of the great agitator-in-chief for taking on the titan of search.

Google, meanwhile, mused over the “kleptomania” furore and, according to a report in the NYT, said it, “provided news organizations’ websites with 100,000 clicks a minute, every one of which offers a business opportunity for the publishers to show ads, win loyal readers and sell subscriptions.”

As I have argued before, it is not easy for online news to make much revenue and an advertising model is perhaps the best anyone can ever achieve with regard to the established modus operandi of content provision and the monetisation of it.

In support of this and in a recession such as the one that has just descended on the world, vast volumes of online traffic do not necessarily translate into significant advertising revenue. Furthermore, news is a fickle business in that unless the entire industry pulls together in the same direction, people will read the news somewhere else — and that has been Mr Murdoch’s major gripe about the BBC.

So, with ad revenues slashed, Mr Murdoch’s great new architectural plan was unveiled to introduce subscriptions, which also flies in the face of how people use the web. This week Google seems to have softly entered the debate, looking at ways to appease Mr Murdoch and accommodate paid content.

As the NYT dismissively commented: “Critics of News Corp said last week that Google should just let Mr Murdoch walk away, and that he would be shooting himself in the foot by doing so. News is a commodity on the web, and the loss of one of many sources of it will make little difference to internet users…”

A Guardian article (you see how much I need the web for quotes and information that is published for free?), quoted Josh Cohen of Google News saying: “Media companies that want to erect paywalls around their online content still need to be visible on search engines. In fact, they have an even greater need for their content to be listed.”

He added that: “Google had achieved this by updating its First Click Free programme, so that publishers can limit Google News users to looking at no more than five pages of content a day without registering or subscribing.” The Financial Times is also using this service.

However, as always, there is a hitch: all a user needs to do is to go back to Google each time; and it is this “loophole” that Google is seeking to address so that it will limit you to five pages per day before registration, regardless of how you get to the website.

Arianna Huffington, whose site is largely known for aggregating content, said at a recent Federal Trade Commission workshop on “Journalism and the Internet Age”: “Murdoch is confusing aggregation with theft…” and added: “Aggregation is part of the web’s ‘DNA’ and that Murdoch plays both sides, noting that some of Murdoch’s own sites also aggregate or ‘steal’ content.”

Others think the move is a significant initial victory for publishers, as Rory Cellan-Jones of BBC News said: “By playing hardball, [Murdoch] appears to have got Google to blink.” But as Mark Cuban, an HDNet exec, put it: “Platforms allow news sources, like Newscorp, to post breaking news and gain value from their brand. Google does not.  In other words, if I trust a newspaper, TV or any brand, I can follow it on Twitter and expect the news to come to me…Having to search for and find news in search engines is so 2008.”

So, the phoney war may just stay that way if the compromise is broad enough to placate Mr Murdoch. All said and done, the changes put forward by Google seem fair enough given the territory that’s at stake. But some observers have commented about the long-term sustainability of the model. One said: “The internet is open source at its core, is it not? So is content. Revenue models back to the drawing board…” Maybe, but the draughtsman’s contract has been gathering dust for over a decade now, still with no firm resolution in sight.

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John Sylvester is the media director of V9 Design & Build and an expert in search engine optimization and web marketing strategies.

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