Commentary

Microsoft Emerges As Unlikely Ally To Publishers In Sharing Ad Revenue

Microsoft this week expanded its support for proposed laws to force Facebook and Google to pay news publishersfor journalism, an interesting twist for a technology company that once was feared for its dominance in the software industry.

The maker of Windows software and four European Union news industry groups agreed to support a plan that requires online "gatekeepers with dominant market power" to pay for use of news content. They said they were inspired by Australia's proposed law to force tech platforms to share revenue with publishers or resolve their disputes in an arbitration system.

Microsoft also voiced support for the Australian proposal, which is expected to be signed into law before the country's legislative session concludes on Feb. 25. The company's support contrasted with threats by Facebook and Google to withdraw some of their services from the country.
Google had said it would stop providing internet search in Australia, but backed down as it reached agreements to pay several publishers to provide articles for a News Showcase service. Facebook followed through on its threat by temporarily preventing Australians and publishers in the country from posting links to articles, triggering a public backlash.
Microsoft's support for revenue-sharing schemes that would help publishers shouldn't be mistaken for altruism.

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The company owns the professional networking and job search site LinkedIn, an indirect competitor to Facebook. Microsoft competes more directly with Google in internet search, cloud computing, document-sharing, web browsers, email and operating systems for laptops, among other services.

However, Google is almost entirely dependent on advertising revenue to provide services for free to consumers, while Microsoft still makes money the "old-fashioned way" for technology companies: software licensing. It can happily support any law that forces Facebook and Google to share ad revenue with publishers. And, it's quick to tout how much it pays media companies for content.
It's interesting to see Microsoft position itself as an ally to ailing publishers, more than two decades after the media industry had fretted the company would parlay its dominance in software into advertising sales. In the mid-1990s, Microsoft pushed into original content with the launch of online magazine Slate, investments in MSN as an online content hub and a partnership with NBC to start MSNBC.
It later divested from the cable news channel and website, and has re-branded its news platform several times. Microsoft News is still a significant distributor of aggregated content and touts how it shares advertising revenue with publishers. Its advocacy on their behalf may prove to be beneficial in tilting the digital revenue scales back in the favor of content providers.
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