Microsoft leads News Corp down road to disaster
Early reports say that Microsoft could be working with News Corp to have its content removed from every other search engine. The only problem is that Microsoft’s Bing accounts for less than 10 percent of all searches.
News Corp’s Rupert Murdoch (above) has been threatening to remove all of his sites, including news from the Wall Street Journal completely from Google. Murdoch would then charge for access to the news site as a subscription or 24-hour pass.
Now Microsoft is bolstering that approach by offering to pay News Corp to allow its results to show up in its Bing search engine. While that approach might help prop up the newspaper business in the short term, it’s not a sustainable business model.
If News Corp’s content is only accessible to Bing users, which only account for 10 percent of the overall search market in the U.S. This leaves the other 90 percent of searches, including Google’s 65 percent share without access to News Corp’s content.
While this may seem like a good way to bully Google into paying similar content licensing fees, another result is far more likely. A 90 percent tumble in News Corp’s search traffic will show a substantial decline in site traffic and advertising dollars, making the future of news look even bleaker.
In addition, Microsoft’s willingness to license the right to index News Corp’s content represents desperation on Microsoft’s part and not a stable business model. Microsoft’s online services have never been profitable and is funding Bing out of its sizable war chest built from desktop licensing revenue.
What happens when Microsoft realizes that this isn’t a viable long term strategy or runs out of funds to prop up ailing News Corp? If News Corp can’t transform itself into a Web powerhouse without taking handouts, the entire news industry could be weighed down by its colossal failure.
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