Why News Corp. and Murdoch Won't Quit Google

Rupert's Grumblings Really Aren't About Vanishing From Search Engines but Building Higher Pay Walls

By Published on .

NEW YORK (AdAge.com) -- Pulling media sites out of Google search results is a bold idea, but there are many reasons to think it's not the future of the web. And if it's not the future of media companies as a whole, it's probably not even the future of News Corp.

Rupert Murdoch
Rupert Murdoch
News Corp. CEO Rupert Murdoch created a furor last week when he suggested News Corp. would quit Google. And Google's response was along the lines of "go ahead, make our day." Bloggers and analysts rushed to show just how such a move would play out.

If anyone could survive invisibility on Google, it's Mr. Murdoch's Wall Street Journal -- even though the newspaper's website got 7% of its page views and 17% of its unique visitors through Google last month, according to Compete.com.

"I can see some advantages," said Scripps digital chief Rusty Coats, "if I'm a national publisher like The Journal, trying to build more exclusivity to my content and using this as a way to further thwart aggregators -- and by that I don't mean Google so much but people who bottom-suck off of Google."

The good and bad analogies
The move could make News Corp. websites work more like print -- in a good way. Readers who want news from their favorite source would have to enter through the front door, registering and subscribing along the way. Those readers are worth more to advertisers than the unwashed, anonymous masses shipped in by search.

But it would also make News Corp. sites more like print in the bad way. Readers who don't know about a Journal story on their area of interest would become less likely to find out about The Journal's value. Sampling would go through the floor. The link economy would no longer recommend News Corp. sites. Mr. Murdoch's recent grumbling about "fair use" aside -- grumbling quickly followed by an admission of its value -- other sources will take Journal news breaks and expand upon them.

What's more, the media business as a whole is not going to close ranks behind this plan. "There are a small number of leading brands that could have that discussion and even then I'm not sure it would work," said John Frelinghuysen, media practice leader at Bain. If News Corp. absents itself from Google, news providers of all kinds will rush to fill the vacated real estate on search results pages.

Jason Calcanis, the internet entrepreneur and CEO of Mahalo, suggested last week that withdrawing from Google results could work if Microsoft paid The Journal, New York Times and a swath of other important news brands for exclusive rights to list them in Bing search results.

That's a "great strategy to spend Microsoft's money" unless it includes, say, every member of the Online Publishers Association, said Bryan Wiener, CEO of the digital agency 360i. "The basis of that presumes a generation of people care enough about that particular content that's only available in Bing to actually switch their default search engine from Google. Our experiences over a decade of search tells us there's not a problem ... with Google that gives consumers a reason to switch and it would have to be a lot larger than not having New York Times or Wall Street Journal content. It would have to be a consortium of huge proportions for that to be successful."

No one should get pie-eyed about pulling out of search, added Mr. Coats. "That's a really great strategy to be led from a national or a consortium or a united front. But doing it one by one by one, it's like shouting into a hole."

What's the real cost, anyway?
To make the idea a business plan more than an ego play, even The Journal would need to solve for this question: How many dollars are bottom-sucking aggregators really costing publishers?

The question matters because search does bring ad inventory. According to Compete, the big three search engines drove about 21.9 million page views to WSJ.com in October. Revenue per thousand pages is likely around $24, given the WSJ.com's high ad rates and number of ads per page. That means about $525,000 in October; assuming October is representative of a typical month, that's about $6.3 million a year. Even if revenue per thousand pages runs much lower, say $10, that's still almost $3 million a year.

Google and Three News Corp. Sites, October 2009

Page Views via Google
Site Referred PVs Total PVs %
barrons.com 3,408,386 32,088,122 10.6%
nypost.com 3,831,034 42,529,866 9.0%
wsj.com 18,629,197 256,779,737 7.3%

Unique Visitors via Google
Site Referred UVs Total UVs %
barrons.com 112,323 1,497,686 7.5%
nypost.com 600,016 3,598,613 16.7%
wsj.com 1,633,162 9,394,284 17.4%
Source: Compete.com

Whatever the real numbers turn out to be, Mr. Murdoch knows The Journal would still lose ad dollars. And, yes, he sounds OK with that. "The fact is there's not enough advertising in the world to go around to make all the websites profitable," he said in the interview that kicked up this storm. "And we'd rather have fewer people coming to our web site, but paying." But let's not get carried away hanging on Mr. Murdoch's every word. This is the man who used to predict he would remove The Journal's online pay wall, after all; not everything he says actually follows.

A close read of the interview that set this all off, moreover, suggests Mr. Murdoch is talking about putting up pay walls, not erasing News Corp. sites from the most popular search engine in the world. His interviewer asked him why he doesn't just block Google if search engines are misappropriating his content. "Well I think we will, but that's when we start charging," Mr. Murdoch answered. Fair enough: Cue the headlines.

But that wasn't everything. "We already do it with The Wall Street Journal," he immediately continued. "We have a pay wall but it's not right to the ceiling. You can get the first paragraph of any story but if you're not a paying subscriber to WSJ.com, there's immediately, you get a paragraph and a subscription form."

It's about the pay walls
If News Corp. plans to do what The Journal is already doing, it will put up more pay walls, not abstain from appearing in search results.

Let Google deliver searchers to a headline and some teaser text. If consumers want to pay the micropayment or subscribe, more power to them and to News Corp. Then even if they return via Google another time, News Corp. will know exactly who they are and charge advertisers accordingly.

But then again, News Corp.'s digital chief, Jonathan Miller, seemed to support the Google-blocking idea at the Monaco Media Forum on Friday. "The traffic which comes in from Google brings a consumer who more often than not reads one article and then leaves the site," he said. "That is the least valuable of traffic to us."

So let's play this out. Maybe News Corp. news sites could survive the hit to traffic, but the benefits still seem vanishingly small. It would help if a media army followed along.

And one more time, not all sites are The Journal, within News Corp. or without. "It's possible blocking Google wouldn't hurt The Wall Street Journal's core customers," said Mr. Wiener. "But Google's role as a kingmaker is determined by an entire generation of people who look to it to see what's relevant and what's not. The risk of irrelevancy should prevent level-headed media owners from withdrawing completely. What you need is a search content strategy that shows a little leg and gives enough content away free via search engines to entice people, but doesn't give it all away. The Journal already does good job of this."

In this article:
Most Popular