Microsoft & Google – Struggle to the Death?

The stories and discussions about the Microsoft and News Corp move to entice news outlets to delist with Google keep coming, with my reading bringing me across at least one example of opinion each day.

My first knowledge of this began with the quote from Mark Cuban (pro basketball team owner, notorious loudmouth) that basically either expressed or reiterated the concept of taking news business away from Google, while seeming to refuse the acknowledgement that being listed with Google drives traffic to the originating sites.

One assumes that someone of intelligence has done the math involved, though the amount of ill will brought by the move would certainly be a mitigating factor.

Another one of the continuing opinions on last Friday from slashdot brings a fine point to another facet of the problem, and a gamble that Microsoft and News Corp might have to make -

“Nicholas Carr has an interesting analysis of Rupert Murdoch’s threat to de-list News Corp’s stories from Google and Microsoft’s eager offer to make Bing Murdoch’s exclusive search engine for its content. Carr writes that newspapers are caught in a classic Prisoner’s Dilemma with Google because Google’s search engine ‘prevents them from making decent money online — by massively fragmenting traffic, by undermining brand power, and by turning news stories into fungible commodities.’ If any single newspaper opts out of Google, their competitors will pick up the traffic they lose. There is only one way that newspapers can break out of the prison — if a critical mass of newspapers opt out of Google’s search engine simultaneously, they would suddenly gain substantial market power. Murdoch may have been signaling to other newspapers that ‘we’ll opt out if you’ll opt out,’ positioning himself as the would-be ringleader of a massive jailbreak, without actually risking a jailbreak himself. There are signs that Murdoch’s signal is working, with reports that the publishers of the Denver Post and the Dallas Morning News are now also considering blocking Google. In the meantime, Steve Ballmer is more than happy to play along with Murdoch because although a deal with News Corps would reduce the basic profitability of Microsoft’s search business, it would inflict far more damage on Google than on Microsoft.”

While one can say that Microsoft has revenue streams beyond that of what it might make from Bing, we should remember that it has commitments to Yahoo, and that usurping the News Corp and other listings would not be free.

From a standpoint of revenue streams, Google would seem to be at a disadvantage, but as the prisoner’s problem illustrates, it’s a nearly all or nothing proposition. Also, while Google might seem to be at a disadvantage, it could also be seen as a company with much fewer exiting money streams. Coupled with the driving need of Steve Ballmer of do well at search – for what ever reason, Google may be doing the calculations needed to assess the feasibility of draining Microsoft dry by making them make those deals with News Corp et al.

§

After one look at this planet any visitor from outer space would say: “I want to see the manager!” William S. Burroughs

•

Will he be so happy in 5 years? I tend to doubt it.