A News Corp-Microsoft Bing Partnership Could Work

Here are two stories about a possible Murdoch-Mircosoft deal:

Editor and Publisher: "Microsoft Corp. wants to undercut Google so badly in Internet search that it might pay newspapers to withhold their content from Google."

NYT: "To earn new revenue from sources other than advertising, online publishers will need the help of gatekeepers like Google and Microsoft."

Microsoft is desperate! So desperate that it's willing to cut a deal with publishers that is .. um, actually a very good idea.

To provide a bit of background, today's news hearkens back to Rupert Murdoch's surprise announcement that he was in talks with Microsoft Bing to withhold all of News Corp's content from Google search and receive money from Bing for the exclusive rights to index his news. Some media critics like Jeff Jarvis laughed at the idea, because Google provides lots of traffic, and news websites need traffic for ad revenue.

But that sounds backward to me. The Wall Street Journal (a News Corp product) doesn't need Google traffic ad revenue (or Bing traffic ad revenue, or Ask Jeeves traffic ad revenue). It needs more revenue -- revenue that it's not getting enough of despite a prominent place in Google's results pages. There are only so many places to go looking for this revenue. Search engine traffic, which it has. Subscriptions, which it offers. Creative corporate sponsorships. And, now, search engine deals.

Would a Bing-Microsoft deal work for both parties? I suspect any deal that comes out will probably favor News Corp, for two reasons. First, consider the WSJ. "Turning off" Google would lose WSJ about 25% of its page views by one estimate, but that accounts for only about $12m a year in advertising. Murdoch is going to push for a search engine partnership that makes up a big chunk of that. If WSJ readers flock to Bing, then brilliant. If not, his business team can make a pitch to raise its CPM (online ad rates) for a higher-class audience that has trimmed its Google fat. That's OK, too.

Second Bing has deeper coffers and lots of ground to make up against Google. As the only search engine destination for the WSJ and big-name papers in Great Britain and Australia, it could build on its excellent consumer-based search options to become the single server of some of the biggest English language newspapers in the world. That would be a fascinating wrinkle in the search engine wars.
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Also, open question: Does anybody see any reports that Microsoft is nervous about the deal because of Murdoch's politics? Google is already seen as an Obama-friendly global "campus" of young liberal moderate types. Would a News Corp-Bing partnership add an awkward political dimension to the Google-Bing rivalry?

Derek Thompson is a staff writer at The Atlantic, where he writes about economics, labor markets, and the media. He is the author of Hit Makers.

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