Could Microsoft-New Corp.'s Deal Mean Sharing Ad Profits?


Talks between News Corp.'s Rupert Murdoch and Microsoft execs could see Bing gaining ground in the search engine wars, but publishers could come out the big winner. The potential deal demonstrates Microsoft's willingness to share with News Corp any profit from paid search advertising related to content from sites, such as The Wall Street Journal's.

The Financial Times reports the two companies are in negotiations to remove News Corp. content from Google and give exclusive indexing rights to Microsoft Bing. It has had the blogosphere buzzing for weeks.

Some say the potential deal between New Corp. and Microsoft would put pressure on Google's margins. Others believe Google won't need the news content to thrive.

Based on comScore statistics, Bernstein Senior Analyst Jeffrey Lindsay believes Google drives approximately 11% to 14% of incoming traffic to News Corp.'s U.S. news Web sites, including the Dow Jones Properties, Fox News, and the New York Post. "Blocking access to Google's Web crawlers could hurt traffic at these sites and: thus, could actually harm News Corp." he wrote in a research note.

On the other hand, Columbia Journalism Review's Ryan Chittum calculates that the WSJ makes less than $12 million annually in advertising from people who come to the site through Google, although it accounts for 23% of the site's traffic. "You'd be a fool to underestimate Murdoch's intelligence," Chittum writes.

David Harry, founder of Reliable SEO, sees the deal as "a bit of a coup for Microsoft's Bing. "Google, being the near-monopoly that they are in the world of search, hasn't demonstrated a lot of interest when it comes to working with news outlets," he says.

Danny Sullivan at Search Engine Land explains why the potential deal won't help Bing.

Some, including Roger Barnette, president at SearchIgnite, think it makes sense that New Corp. would try and reach an exclusive deal with Microsoft where the news organization would get paid for the content. It's not clear if the two would base the deal on a subscription model, or share of advertising profits. "Sharing in the advertising profits makes more sense and [is] easier to implements," he says.

Technically it's possible to block search engines from indexing content. Aaron Goldman, managing partner at Connectual, tells MediaPost that New Corp could code a robots.txt file to prevent Google or any other search engine spider from crawling its content. The news agency would arrange to pump its content to Microsoft through an API or some other format, he says.

But Goldman doesn't think anyone would miss the News Corp content from Google's index. "Google has no shortage of other sources to cite for queries related to News Corp content, so people will just get their news or entertainment from other places," Goldman writes in a blog post. "Google is one of the top brands in the world. News Corp is not. Google is the source the masses trust when seeking information. News Corp is not."

The talks that demonstrate Microsoft's willingness to share in the profits are more likely based on New Corp.'s providing access to premium content with Microsoft or designing a way to display content in Microsoft search engine result pages, instead of Microsoft's gaining exclusive rights. It's also likely based on a revenue-share advertising model, where the two would split profits from paid search.

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