Fascinating post today by Mark Cuban on the Murdoch/Bing rumours. By Mark's account, in the future we might see aggregators (or at least search engines) paying news publishers for exclusive rights to link to their content. I have to say, I had missed the exclusivity angle in my own analysis of the issues, where I predicted that payments would flow the other way around.
But I'm still not convinced. To lure a publisher, Bing would have to offer payments in excess of the ad money the publisher gets from Google traffic (ad money from Bing traffic would count towards this, but at least for now that would be negligible). But I've argued that this money (what the publisher gets thanks for Google) is far more than what Google would lose from having a publisher sign an exclusive with Bing. If this is right, it follows that Bing would need to pay more than Google would lose. And because Bing gets less money from each publisher than Google does (because it has less traffic), this means that Bing would incur a loss each time it signs an exclusive. By Alan Mutter's estimation,
If a newspaper were generating revenues as low as $1 per thousand for banner advertising on the traffic steered to it by search engines, then Microsoft would have to pay the paper more than $10 per thousand to make it worthwhile for the paper to forsake traffic from Google.
Assuming all of this is right, what is Bing's game? Possibly this: if Bing manages to sign enough publishers, and if as a result it increases its traffic significantly, Bing could start luring publishers for less money. If one day Bing and Google have comparable market shares and there are no other big players around, then Bing could lure publishers with just a tiny bit of money. To prevent this, Google might then respond by paying for exclusive rights too, and the whole game would be very different from today.
But those are big ifs. It's hard to imagine enough publishers going exclusive with Bing for this to happen. And then there's the problem of the wires. As Mark Cuban notes in a different connection, much of news publishers' content is just reversioned stories from Reuters, Bloomberg, AP and others. The wires don't have strong consumer brands, so every link they get from Google is manna for them. One day they will need to ask themselves whether they prefer to help their publisher-clients or deal with aggregators directly. If aggregators can just link to the wires for free bypassing publishers, the latter could become irrelevant. The AP probably won't go for this but Reuters and others might.
Still, I'm puzzled. Bing's gambit might work, but it sounds very risky. As Wired's Eliot Van Buskirk said, "the road between point A (forcing Google users to ignore News Corp articles) and point B (forcing Google and other search engines to pay for the right to excerpt from and link to news stories) is rocky or perhaps even nonexistent."
Ps: Compare and contrast: aggregator bites publisher
Ps 2: Robert Andrews explores another possibility: Microsoft might be hoping that copyright law would change in its favour, making it illegal for Google to index content without publishers' permission. But in my analysis that's irrelevant: publishers are in Google because they want to.