Thursday, November 26, 2009

Rupert Murdoch vs Google

In the blue corner is Rupert Murdoch, the media tycoon – Chairman of Newscorp, owner of The Times and the Sun in the UK and New York Times in the US, and the TV Channels Sky, Star and Fox News. In the red corner is Google – the titan of the on line world. The bout has begun.

In question is the issue of on line news – who owns it, who pays whom for it, etc etc. Now we are perfectly willing to pay a few rupees, or cents or yuan for a newspaper, but are absolutely not prepared to pay a penny for the same newspaper on line. Confess it – you haven’t read the newspaper today. Instead you browsed on line. I did too – at least my excuse is that the single English newspaper, where I live, is not worth reading! What’s yours ?

Murdoch says Google and such other news aggregators are freely linking to news content that his newspapers create and then get advertising revenue for it and to rub salt into the wounds, charge the papers for sending readers to it. They have news pages which attract readers by aggregating content, but they don’t pay the content creators for it. Kleptomaniacs, thunders Murdoch.

Google says the old man just doesn’t get it (of course not in those words). They say the on line world is a new world, traditional newspapers are dinosaurs, their business models are broken and that the on line world is comprised of “free” information and that’s the way it will be.

Now Murdoch has a point. Credible content that newspapers create cost money. They have to have reporters in every corner of the world, they have to edit pieces, etc etc. Contrast that against the writings in this blog, which costs nothing to create, but is usually unadulterated twaddle. So Murdoch says, his news is intellectual property and cannot be stolen by content aggregators.

He is therefore going to Microsoft , trying to negotiate an exclusive arrangement with Bing and simply exclude Google.

The problem is that newspapers are declining all over the world. In a few years, newspapers may go the way of Readers Digest – a quaint oddity for the geriatrics. Newspapers went online but have made it free – only the FT and the Wall Street Journal have managed to charge for it. So their revenues are in serious decline.

Its easy to brand Murdoch as an old foggy and that he doesn’t understand the online world. I don’t think that’s true – he’s a shrewd businessman who understands it all too well and is picking up a real fight . After all remember they said the same thing, at the peak of the dot com boom, about an old geezer called Warren Buffet.