Bernstein Research analyst Jeffrey Lindsay said News Corp.'s alleged plan to remove content from its Wall Street Journal and other Web sites from Google's search engine is unlikely to rattle Google. It's just a move from News Corp. to put pressure on Google during the renegotiation of the $900 million advertising deal with MySpace.
"We think Microsoft, as usual, is fishing in troubled waters in the hope that it may get something out of the situation or at least give [Google] a poke in the eye," Lindsay wrote in a Nov. 23 research note.
Citing ComScore data that shows Google drives 11 percent to 14 percent of traffic to News Corp.'s U.S. news web sites, such as the Dow Jones properties, Fox News, and the New York Post, Lindsay argued that blocking access to Google's Web crawlers would backfire, impinging traffic at these sites.
Moreover, the only way it would work is if AP, Reuters and other major newspapers formed a cartel to block Google's search crawlers to their Web properties until Google agreed to pay access fees. Google would likely balk at this and consumers would protest the inability to find content from these popular news sources.
Consumer advocates would object, and the antitrust regulators at the Federal Trade Commission and Department of Justice would quash such an action as anticompetitive, even in the face of Google's massive market share. Moreover, Lindsay wrote, the financial impact of News Corp.'s abstention of Google would be small because news is one of the less attractive areas for keyword advertisers.
So why is this rumor kicking up now? Lindsay said it's a bargaining chip by News Corp. and Microsoft during the Google-MySpace search ad re-negotiation. The three-year deal called for Google to pay MySpace $300 million per year. But MySpace is woefully underperforming and is unlikely to curry a favorable deal from Google or Microsoft.
"We think News Corp. executives are well aware of this and so are enlisting the help of Microsoft to try and put pressure on Google in other ways - namely the possibility of a newspaper online cartel," Lindsay wrote. "We think the prospects of succeeding with such a strategy, however, are extremely thin to say the least."
Meanwhile, Bill Tancer, an analyst with market researcher HitWise who has already gone on record saying News Corp.'s blocking of Google's search engine would be unhealthy for the news conglomeration, reiterated his stance in a research note Nov. 23.
Tancer said the top 100 Google search terms sending traffic to the WSJ.com accounted for over 21.6 percent of all Google search traffic to WSJ.com. Of that 21.6 percent, 13.4 percent were navigational or brand searches to find the WSJ.com, so even if Murdoch decides to block Google, these navigational search queries will likely remain intact.
"As newspapers continue to search for a way out of the search rip current, it's hard not to root for [News Corp. founder Rupert] Murdoch's maverick de-index strategy, that being said, the numbers bring us back to reality," Tancer wrote. "As print continues to hemorrhage readership, could blocking your most significant traffic source be a wise choice?"
The fresh News Corp.-Microsoft rumors come two weeks after Murdoch said he was leaning toward making paid content from the Journal and other sites invisible from Google's search index by adding a few code snippets to those sites' Robot.text files.
Mahalo CEO Jason Calacanis said this could be the thing to help Bing finally ding Google, which leads the market with a 65 percent search share to Bing's roughly 10 percent, according to comScore. Search Engine Land's Danny Sullivan disagreed.