14 DAY TRIAL // Most people would agree that change is good. At the same time, most people are afraid of change. At this point, it isn't surprising to anyone that the old media is terrified of change, meaning the web, and it's hard to pick the one that's most afraid, the movie industry, music labels, or newspapers. It's a lot easier to pick the one which has been hit the hardest though, most newspapers are struggling hard to survive. Luckily, they have a convenient scape goat to offset their own failures, the search engines. Music labels have the Pirate Bay, newspapers have Google, the roots of all evil in their view, a company which has been making money by “stealing” content from the hard working news organizations. Hearing someone like News Corp.'s CEO Rupert Murdoch talk about the issue, it becomes apparent that the higher ranks at these companies have little to no idea how the web works, how to make money online, or how Google works and what it does.
This hasn't stopped them from lashing out at search engines which - along with news aggregators and that most vile of online creatures, the blogger – have been taking advantage, making millions while contributing nothing. All this time, most people even moderately knowledgeable of the web had one simple answer, opt-out of being indexed by Google or other search engines for that matter. That's exactly what Google has said on the matter, “nobody is forcing you to be included.” Nobody actually expected the newspapers to get out, but lately, there has been a lot of talk about just this. News Corp., one of the largest news and media organizations in the world, has been threatening to remove its content from Google if the company doesn't start paying. At first, most people were unconvinced that it would take this suicidal step.
But now there's an even more interesting tidbit, it looks like Microsoft has been actively courting news organizations, including News Corp., offering to pay them for the exclusive right to index the content. This was one of the theories that surfaced when talks about leaving Google intensified and it looks like Microsoft believed this was also an opportunity. Rumors of talks between Microsoft and news organizations first showed up a week ago, on the TechCrunch blog, and have surfaced again, this time in the Financial Times. There aren't many new details and the gist of the story is that the Redmont giant, bent on taking on Google in search, has been talking to several groups offering revenue sharing and most likely cold hard cash in exchange for exclusivity.
It's easy to understand Microsoft's point of view to a certain degree. The company has said that it's prepared to pay any amount to get a bigger share of the search market currently dominated by Google. It certainly looks ready to pay for content, which many users would presumably value, determining them to switch search engines. That's the theory at least. In practice, Microsoft would benefit marginally at best while Google would hardly feel the loss. In the search engines war, it would be a minor victory for Bing, but not one likely to change the course of the battle. And even without indexing the actual sites, Google would still index other sites which would link to the original stories, so it probably wouldn't be missing out on too much. Therefore, there aren't any big winners but there are some big losers. For the news organizations, the move may very well prove a final blow plunging them further into irrelevance. These companies claim that search engine traffic isn't crucial to their business and that the users really coming from search engines are of little value to them. Of course, they wouldn't mind the traffic so much if they were to be paid to receive it, which is what it all boils down to, money.
The fact is that, while countless numbers of websites including news outlets have been able to make a living and in some cases serious amounts of money by exploiting the traffic search engines send their way, these old media organizations have failed to do so. They get the traffic, they get the advertising money, yet they still manage to come out short time after time. And instead of adapting and doing what everyone else is doing, they're looking left and right to see who they could get to pay and they've found two possible answers, users and search engines. Unfortunately for them, neither are actually willing.
The news organizations claim that people should and would pay for news. They say that if they put up pay walls around their content most readers, the “valuable” ones, will pay and, on the whole, the organizations would make more money. This may even work in the short term. The sites would see a drop in visitors but an increase in revenue from subscriptions, a manageable compromise if they would supplement the lost advertising revenue. Most people, though, won't pay for news when they can get it for free elsewhere. There are countless others news sites just vying for a chance to steal some readers from the established publications. And with blogs and other similar outlets constantly beating old-school media when it comes to breaking news and even to big-name editorials, the argument that people will pay for “quality journalism” is shoddy at best.
This leads to the second target, search engines. This one seemed as unlikely to be successful, just as the first one, but it looks like the news organizations are getting closer to achieving their goal, getting paid for receiving traffic. That would be an actual victory if all search engines were to pay; however, it's highly unlikely that Google would cough up the cash even with all the muscle flexing from the news groups lately. In the worst case scenario, Google would lose revenue and maybe even market share, but it would be able to weather the storm. So, where does this leave us? Well, pay walls are definitely coming and it remains to be seen how successful they'll be. But exclusive contracts with just Bing seem a lot less likely. On the other hand, it wouldn't be the first time an industry would sign its own death sentence.