• by Laurie Sullivan , Staff Writer @lauriesullivan, November 24, 2009

Cutting a deal with Microsoft to block News Corp. content from indexing on Google may not be a viable way for Rupert Murdoch to improve the economics of New Corp. media sites, but developing a syndication or license model specifically for search engines might.

Reuters has been successfully syndicating and licensing content to news organization for years. In one model, software tied to content monitors the length of time news sites can provide readers access to articles. In another, if the news organization has multiple publications, there are strict rules preventing sites from repurposing the content.

And then there's the online movie rental subscription model that lets consumers download and rent movies online. Digital rights management tied to the license triggers a sort of self-destruct mode after a specific length of time, which ranges from a few days to a month depending on the service.

Bernstein Analyst Jeffrey Lindsay writes in a research note that the only strategy that could really hurt Google would be if all major newspapers, and outlets like Associated Press and Reuters, were to agree to a watertight cartel to block Google's access to their Web properties until the search engine agreed to pay access fees, which is unlikely.

So, what if New Corp. built a syndication or license model specifically for search engines? There's no doubt new revenue streams will emerge as publishers look to share gains from advertising. News agencies and media companies have complained for years about Google profiting by indexing media content for free. Google has responded by telling them to remove their content from its search engine.

It comes down to effectively monetizing the model, according to Aaron Goldman, managing partner at Connectual. "People looking for news or content are not in a commercial mindset, so they'd be less likely to click on ads and convert for advertisers," he says. "It would be very hard for Microsoft to make up in advertising what it would take to pay the publishers for exclusivity."

But what if the Microsoft-News Corp deal isn't exclusive? Microsoft has already begun to build niche search engines within Bing. Down the left rail of the engine, people searching on Bing will find the categories Images, Videos, Shopping, News, Maps, Travel, History and Visual Search. There are links to check airline flight status and favorite remedies for the flu.

Global Equities Research Analyst Trip Chowdhry says there are several issues Microsoft and News Corp. need to consider, such as how to create premium content, since some news turns into a commodity.

"It's a chicken and egg problem," Chowdhry says. "Relationships are being formed. It's too early to determine the successful model, but anything that creates boundaries isn't the correct strategy."

Facebook and Twitter have gained traction because they create a "totally frictionless flow of information," Chowdhry adds.

David Hallerman, senior analyst at eMarketer, says Microsoft Bing would need mass -- many more visitors than it currently has -- to create a niche business based on news content. And, News Corp. would need premium, rather than commodity content. "They would have to provide news that no one else could. Otherwise people would go directly to The Wall Street Journal," he says.