[Infowarrior] - Microsoft and News Corp eye web pact

[Richard Forno]

Microsoft and News Corp eye web pact
http://www.ft.com/cms/s/0/a243c8b2-d79b-11de-b578-00144feabdc0.html

By Matthew Garrahan in Los Angeles, Richard Waters in San Francisco  
and Andrew Edgecliffe-Johnson in New York

Published: November 22 2009 23:01 | Last updated: November 22 2009 23:01

Microsoft has had discussions with News Corp over a plan that would  
involve the media company’s being paid to “de-index” its news websites  
from Google, setting the scene for a search engine battle that could  
offer a ray of light to the newspaper industry.

The impetus for the discussions came from News Corp, owner of  
newspapers ranging from the Wall Street Journal of the US to The Sun  
of the UK, said a person familiar with the situation, who warned that  
talks were at an early stage.

However, the Financial Times has learnt that Microsoft has also  
approached other big online publishers to persuade them to remove  
their sites from Google’s search engine.
News Corp and Microsoft, which owns the rival Bing search engine,  
declined to comment.

One website publisher approached by Microsoft said that the plan “puts  
enormous value on content if search engines are prepared to pay us to  
index with them”.

Microsoft’s interest is being interpreted as a direct assault on  
Google because it puts pressure on the search engine to start paying  
for content.

“This is all about Microsoft hurting Google’s margins,” said the web  
publisher who is familiar with the plan.

But the biggest beneficiary of the tussle could be the newspaper  
industry, which has yet to construct a reliable online business model  
that adequately replaces declining print and advertising revenues.

In a possible sign of negotiations to come, Google last week played  
down the importance of newspaper content.

Matt Brittin, Google’s UK director, told a Society of Editors  
conference that Google did not need news content to survive.  
“Economically it’s not a big part of how we generate revenue,” he said.

News Corp has been exploring online payment models for its newspapers  
and has taken an increasingly hard line against Google.

Rupert Murdoch, News Corp chairman, has said that he would use legal  
methods to prevent Google “stealing stories” published in his papers.

Microsoft is desperate to catch Google in search and, after five years  
and hundreds of millions of dollars of losses, Bing, launched in June,  
marks its most ambitious attempt yet.

Steve Ballmer, chief executive of Microsoft, has said that the company  
is prepared to spend heavily for many years to make Bing a serious  
rival to Google.

Microsoft has sought to differentiate Bing by drawing in material not  
found elsewhere, though has not demanded exclusivity from content  
partners. Bing accounted for 9.9 per cent of searches in the US in  
October, up from 8.4 per cent at its launch, according to ComScore.

James Murdoch, chairman and chief executive of News Corp Europe and  
Asia, hinted last week that the company was making progress with its  
online plans. “We think that there’s a very exciting marketplace,  
potentially a wholesale market place for digital journalism that we’ll  
be developing,” he said

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