Rupert Murdoch has really put the cat amongst the pigeons with his comments about Google:
“Rupert Murdoch threw down the gauntlet to Google Thursday, accusing the search giant of poaching content it doesn’t own and urging media outlets to fight back. “Should we be allowing Google to steal all our copyrights?” asked the News Corp. chief at a cable industry confab in Washington, D.C., Thursday. The answer, said Murdoch, should be, ‘Thanks, but no thanks.’ “
Some people will paint this as an old-media dinosaur not understanding new media, but I’m not so sure. If you’ve read Michael Wolff’s biography of Murdoch, you’d realise that he rarely says something like this without thinking it through, and without having an agenda.
There’s a few points of context which should be considered:
Google is a competitor to newspapers
The pool of advertising money online is finite. At the moment, Google takes a very large chunk of that money. If content isn’t paid for, then that makes Google a competitor to newspapers as well as something which delivers traffic.
Traffic is a double-edged sword
You need readers to make money from content, but even online every reader has an incremental cost. If companies aren’t making enough money from the additional readers they get from Google, then Google represents a cost to newspapers, rather than additional revenue. In other words, if the ad revenue isn’t there, every page view costs money. So why should newspapers care about the loss of page views from blocking Google?
Search feeds off content, just as content feeds off search
If a user can’t find the content that’s most relevant to them from a search engine, that search engine is useless. Relevance is everything – and that works both ways. Taking their content out of Google would hurt a newspaper (unless they’re making nothing from the page view), but it would hurt Google too.
What I think is clear is publishers are starting to think that the present position is unsustainable, as it offers the worst of all possible worlds for them. They don’t get paid by readers. A large chunk of the advertising revenue goes to Google, rather than them, in a world where ad revenue is hurting overall.
Interesting times, and lots of open questions. If someone says that the status quo can be maintained, I’d take that with a pinch of salt.
UPDATE: Just to add fuel to the fire, Alan Patrick has done some back-of-the-envelope calculations to work out how much Google makes from a typical site, in this case, TechCrunch.
“In other words, if all hits to TC are via Google, then Google is making 10x more money than TC is. Or, put it another way, if Google has only 10% of the traffic going to TC via its site, it makes the same amount of money.”
While Google obviously adds a lot of value to the customer, does it really add as much value as the content that the customer is actually interested in – let alone more value?