The Google conundrum

News Corp is taking its media off Google as it prepares to start charging. But more than half its traffic comes from search engines. How do you solve that one, Rupert? Nick Clark reports

Saturday 14 November 2009 01:00 GMT

Rupert Murdoch has relaunched his war of words against Google this week, but some have questioned whether the media tycoon is sabre-rattling or preparing a full offensive.

Mr Murdoch told Sky News Australia on Monday that papers owned by News Corporation, which include The Times and The Sun in Britain, will disappear from the largest search engine when the titles begin charging for online content. A few days earlier he had admitted that these plans to charge had been delayed.

At this week's Monaco Media Forum, both issues – charging for online content and blocking news aggregators such as Google – have been fiercely debated.

Mr Murdoch has spent much of 2009 on both subjects, and his lieutenants have been quick to take up arms. Les Hinton, chief executive of another News Corp title, The Wall Street Journal, called Google an "internet vampire... sucking the blood" out of the industry.

Robert Thomson, editor of The WSJ, also weighed in last month, saying that Google "encourages promiscuity" and "The whole Google model is based on digital disloyalty. It's about disloyalty to creators."

Yet The WSJ is one of the few titles, along with the Financial Times, to make the online charging model work. It had 407,000 online subscribers in the six months to September.

Jonathan Miller, News Corp's chief digital officer, told delegates in Monaco that "something needs to happen" over the pay vs free content, saying it would block Google in "months".

Google drives millions of clicks to the newspapers, but the company feels that Google brings the "least valuable of traffic to us" as readers tend to look at one article before returning to the search results homepage. Mr Miller ended his rallying cry to the industry with the words: "You can survive without it."

Beyond the grandiose statements – this week Mr Murdoch said: "I think we will [block Google]" – there has been little actual action, especially odd as removing content from Google is relatively easy. Publishers can enable technical standards on the websites, referred to as robots, to block search engines from crawling their sites for content.

Claire Enders, founder of Enders Analysis, said: "I suspect Rupert Murdoch is just sabre-rattling to see what responses he will get from the rest of the newspaper industry and from Google. He might well hope that Google reaches out with a revenue sharing deal." She added: "Actions speak louder than words. He could take his content off Google at any time, but he hasn't. It still generates income for him. Not a lot, but it is real money."

Google has been reluctant to get into a slanging match with News Corp, but has set out why it feels the Google News service is beneficial to the newspaper industry. Peter Barron, Google's director of communications for Northern and Central Europe, said: "Our role is simply to help users find the content they want to read and then as quickly as possible get them off Google and on to the site where they can read it." The site sends newspaper websites 100,000 clicks every minute. "Each of those visits offers a business opportunity for the publishers to show ads, win loyal readers and sell subscriptions," he said.

The company emphasised that newspapers can pull their content from the service at any time. "News organisations are in complete control over whether and how much of their content appears in search results. The majority to date have chosen to be included in Google search results because it helps attract new readers," the spokesman said. "But if anyone doesn't want to be included, it's a moment's work to be taken out."

Will Yarker, a director at Deloitte's media practice, said that blocking Google News would hit sites' audiences, but added that ad revenue that comes with the casual audience was low. "Publishers looking to charge for online content see this as a move away from millions of eyeballs with low-value advertising to targeting people who are willing to pay for access and are potentially worth more to advertisers."

So what is the problem with Google? "Google currently makes most of its revenue from search advertising. The more additional services it provides – including access to newspaper articles – the more compelling users will find it, and the more ad revenue will follow."

When Mr Murdoch speaks, others tend to follow. Mathias Döpfner, chief executive of Axel Springer, who was also in Monaco, agreed that aggregators were "stealing" content, adding: "Is it more democratic to go into a supermarket and get a can of beer for free? How absurd."

He was in discussion with Arianna Huffington, who set up the – one of the online aggregators under fire – in 2005. She retorted that online readers would pay only for "weird porn".

Most publishers have considered pay models, but cannot agree on a proper model to encourage customers to pay. Mr Yarker said: "This issue is being heavily discussed by many publishers. The fact that Murdoch has been pushing it so heavily means that others can explore the possibility with impunity."

However he added: "There is no consensus in the industry that this is definitely the way to go. If Murdoch's idea works, everyone will pile in. If not, they will sit and grimace on the sidelines."

Ms Enders added: "All the papers are thinking about it, but there is still no consensus. There have been no advances on a model to make it pay." She isn't convinced that charging for online articles – outside the financial press – can work. "The New York Times put up pay walls, then took them down. The NYT has a stronger reputation for original news-gathering than The Sun. The model has been tried and it has failed."

There has been some backlash from the online community against News Corp. Blog Techdirt posted an article pointing out that the group has sites that aggregate content itself.

Another freesheet bites the dust: 'London Lite' calls it a day

London Lite, the capital's first evening freesheet, has been closed down after three years. The last edition of the newspaper was handed out yesterday with a centre spread that read "Thank you and good Lite!" with a selection of its favourite front pages. It went out last night on the news that Bruce Forsyth had pulled out of this weekend's Strictly Come Dancing with flu.

Steve Auckland, managing director of Associated's Free Newspapers division, said: "It's a very sad day for all involved and I'd like to thank our editorial, merchandising, distribution and commercial teams for producing a brilliantly targeted publication."

It emerged last month that Associated Newspapers, which also publishes the Mail titles, had launched a consultation into the future of the title "which may result in its closure".

The paper was launched in 2006, opening just days before London Paper, published by News Corporation. Its rival announced it was to close in August, with James Murdoch, chief executive of News Corp in Europe and Asia, saying it had "fallen short of expectations". The Lite's closure was hastened when its remaining rival for the London commuter market, the London Evening Standard, went free last month.

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