Kara Swisher

Recent Posts by Kara Swisher

What’s Really Behind the Rupe-a-Dope With Google and Microsoft? Here Are Five Possibilities!


Please see this disclosure related to me and Google.

There certainly is a lot of noisy swirl of late around the escalating fight between Google and some traditional media companies over content online.

The loudest voice in this fight has clearly been News Corp. (NWS) kingpin Rupert Murdoch, who seemingly has not met a television interviewer of late he did not regale with tales of Google’s nefariousness.

Part of what he is saying is surely justified–it’s definitely a crisis for the news business.

And in Murdoch’s mind, the blame should largely fall on Google (GOOG), which he believes is profiting from expensive content others have created and that the search giant is not paying for to such a warped and massive degree that it makes a mockery of fair use.

In Silicon Valley style, Google defends itself by saying it sends valuable Web traffic to News Corp. and other sites, so perhaps a hand-written thank-you note is really the proper response.

That missive is definitely not in the mail from Murdoch, who instead has sent a series of poison-pen letters to Google.

Most notable is that he has threatened to “de-index” at least some of his content assets–which are not insubstantial–from the now-inevitable crawlers sent out by the search giant.

These are, of course, vintage tactics from the Global Media Mogul Playbook: Causing a public hubbub and spooking perceived enemies by threatening drastic action and implying dire consequences, while simultaneously dealmaking behind the scenes.


Trying mightily to make the stakes more dramatic, News Corp. has pulled Microsoft (MSFT) into the fray as a possible white knight–if you live long enough, you do see it all–for publishers.

Under this scenario, the software giant would fork over some sum of money to get News Corp. and perhaps other key content companies, such as Associated Press, exclusively and prominently featured on its Bing search site.

The reward, presumably, would be increased searching on Bing for the stuff consumers could now not find on Google.

BoomTown reported earlier this week that, in fact, Microsoft was unlikely to hand over any kind of king’s ransom to publishers.

As I wrote:

While a spate of reports has Microsoft execs girding the globe offering gobs of cash to content companies to block Google and favor its Bing search service, sources close to the situation caution that it is extremely unlikely that the software giant would pay giant sums for that pricey privilege, which many inside the company think will not help it gain much search share.

“While there is a lot of mutual interest, it’s doubtful Microsoft is going to pay to ‘rent’ a corpus of content that it does not own,” said one source close to the situation. “The economics are not there for anyone.”

In other words, this wrestling match is not about whether Google or Microsoft will serve up links to content online, but about how much–or not at all–they are willing to pay for doing so.

So, what’s really happening here? Here are five possibilities to consider, each of which is true in part:

1. Murdoch really means it.


In this scenario, Murdoch and others, like AP’s Tom Curley, truly believe that Google–like that creepy salt-seeking alien from “Star Trek”–is sucking the life out of the media industry by making bank from its news content, but not giving back nearly enough in return.

Of course, a lot of these companies have willingly done distribution deals with Google over the years.

But now they don’t like it because the increasing money being made by Google, even as their revenue has suffered, has developed into a growing problem.

Which is simply this: There is a lot more money to be made in searching for content than in making content.

This realization has to shake content czars like Murdoch to the core, but it is indeed the situation they find themselves in.

Murdoch makes a fair point in that journalism costs money to make and it used to have a solid economic system under it until Google and others on the Web disaggregated it wholly.

Thus, online aggregators become “tapeworms,” as The Wall Street Journal Managing Editor Robert Thomson quipped.

Thomson also, on a recent panel at the Web 2.0 conference, said to Google’s front page head, Marissa Mayer, that she “unintentionally encourages promiscuity.”

Ouch. That remark, which was was quite striking if you were there to hear Thomson say it, said volumes more.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

2. Murdoch really means to create a lot of confusion, in order to shake down Google.


Well, it would not be the first time Murdoch and many others of his ilk have used public sharp elbows and saber-rattling to get what they want.

Except in this case, the algorithm experts over at Google know precisely–down to the tenth decimal–how much linking to News Corp. makes for them.

And it is not much, especially when looking at the vast sea of data Google serves up.

Its money-making is widely dissipated, from searches for vacation information to mapping to car-buying to health. While news-finding definitely is part of the mix, it is not at the center of the Borg.

Ironically–and oddly left out of this debate–it is Yahoo (YHOO) that has a lot of power in this arena, with massive content sites that shoot traffic all over the Web (including to this site).

But, what Google cannot and never can quantify–although I have seen co-founder Larry Page try once or twice–is the impact of public perception on the company, which has slowly morphed from being a benign, brightly-colored digital, librarian-like helper to a scary, answer-to-no-one, evil-doing monster.


The company’s growing influence over what people see and do not see on the Web is palpably frightening to publishers, advertisers and anyone who wants to be digitally discovered.

Bad luck for Google: Creating and then attacking bogeymen is a Murdoch talent, bar none.

3. Murdoch really means to create a lot of confusion, in order to shake down Microsoft.

Also obvious is the full-scale obsession Microsoft has with Google. While the software giant’s execs try to hide it, their panic over the success of Google has been tough on the once dominant tech company, which has struggled in the Internet arena.

Worse still, Google rakes in the dough, while Microsoft, um, does not.

Finally, this year, Microsoft has created–with no small amount of much needed innovation–Bing, a laudable effort that is starting to show some traction.

While Bing still has a very small market share compared with Google–by a factor of seven to one–it definitely has some momentum.


And, after much turmoil, Microsoft finally did a deft and relatively inexpensive deal to join with Yahoo in a search and advertising partnership to give them both more heft, which will surely help matters.

More important, one of the ways Bing has differentiated itself is via product innovations and intense focus on search niches, such as health.

In this topic area, for example, Bing has struck a not-expensive content licensing arrangement with the Mayo Clinic in order to better feature content.

This is smart business and offers consumers something better and different.

But overpaying big media publishers for the same thing, even if they de-indexed Google at the same time, is not smart, unless it is for really niche things like special financial information.

And even then, there are so many other sources of information out there, it would not take Google long to mount a similar offering, even in the face of some kind of OPEC of News consortium.

Even more–how much do consumers love OPECs of any kind? Not much!

Sources at Microsoft agree:

“If it was everyone, that might become interesting. But even that has issues, since Microsoft is not interested in having exclusive news for a temporary period of time by overpaying for it. It’s essentially a marketing expense, and there are a lot better ways to spend that money to win market share than giving it to publishers.”

Finally, Microsoft has been to the Murdoch party before too, having been part of talks to fold News Corp.-owned social networking site MySpace into Yahoo, had Microsoft prevailed in its attempt to acquire it.

Microsoft missed that pricey bullet and might be more inclined to grow Bing the old-fashioned way–via innovation, marketing and product improvements–rather than just using up too much of its energy trying to mess with Google.

4. A deal will be made.


My not-too-surprising prediction is that in the end, News Corp. and others will probably strike some kind of lesser deal with Microsoft–although it will tout the heck out of it–while taking some of its content behind a pay wall and thereby de-indexing it from Google.

More damaging would be if AP, which actually provides the most used news content online, removes its links completely from Google, because–unlike the premium content from other publishers–this is the bread and butter of consumer usage of content.

As to promotional material or links to television shows and movies from publishers like News Corp.? Well, it would seem the most self-destructive form of pique to remove those links from any of the top search engines.

That said, even if it really pissed me off for publishers to do so, I would probably switch to another search engine to find information on “Glee” if forced to. That’s how much I love those singing kids and Jane Lynch!

Finally, Murdoch has also threatened to challenge the fair use doctrine–which allows others to use copyrighted content within limits, as Google and many others do (such as this site).

While some think that is a bridge too far, it might be Murdoch’s best argument of all. Why should Google make a fortune on the content of others, even if only listing it? Doesn’t the sheer volume of what the search giant vacuums up make its reliance on fair use as a defense pretty ridiculous?

You can be sure Murdoch has his many lawyers and lobbyists all over this one, as does Google.

5. The truth is out there.

In perhaps his most strident television interview, with his Sky News Australia service (which you can see below–oh, the irony–on Google’s YouTube), Murdoch said about those who use Google to find News Corp. content:

“They don’t suddenly become loyal readers of our content. We’d rather have fewer people coming to our Web site but paying.”

That really is the honest truth in all this hubbub: Murdoch and other publishers have to find a way to get a some pool of dedicated online readers to pay enough to be able to then provide them with content that will keep them coming back for more.

That’s a business that Google truly cannot help or hinder, really.

And more to the point, it is also a business that Rupert Murdoch does seem to know a thing or two about.