Rupert Murdoch's recent suggestion that News Corp might stop accepting links from Google has stirred things up. Cory Doctorow thinks Murdoch is bluffing. But as Silicon Alley Insider noted, this may not be such a big gambit for News Corp. According to SAI's estimates, the Wall Street Journal "depends on Google for about 10-15% of [its] site's revenue. This is a meaningful amount, but it's not an amount that couldn't be foregone for a while if Murdoch wanted to try boycotting Google."
This is plausible. A typical newspaper visitor who arrives via Google reads only a fraction of the pages that a loyal reader does. The WSJ also has significant subscription revenues, which would not be affected by a blockage. And for local papers, search-engine visitors are far likelier to be out-of-market, which means that the publisher gets less advertising money per page-view than from loyal, local readers.
So maybe Google's traffic is not worth all that much. But then that's not the point. Even 10% of a site's revenues is an important amount, and you don't throw that away without some thought. If Murdoch were to carry out his threat, few of Google's users would notice News Corp's absence in search results, and even fewer would be bothered enough to go to the missing sites directly. As I've argued in a recent post, this means that for every dollar that Google looses, News Corp would lose many more. And as a result, News Corp has little bargaining power here. In fact, a negotiation might backfire. If a recent report is to be believed, other content providers are actually paying aggregators to link to them.
But News Corp is a sophisticated operation, and you can assume they have gone over this thinking (and the same applies to Google). So what are they doing? It's easy to speculate – e.g. it could be a bid to get other publishers to follow – but I can't think of anything convincing. I'm puzzled.
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