Don't Do This Deal, Microsoft

Rupert Murdoch wants to stick it to Google (Nasdaq: GOOG  ) , and he wants Microsoft's (Nasdaq: MSFT  ) help.

According to news reports, Murdoch is in talks with Mr. Softy over a partnership that would allow Bing, and only Bing, to search and index the archives of News Corp. (NYSE: NWS  ) media properties. How much Murdoch might pay is still unknown.

But the size of the tab isn't what matters. The Big News, to me, is that Microsoft is even considering this deal. There would have to be traffic incentives, benchmarks that Mr. Softy couldn't possibly meet.

Why? First, because of the numbers. No matter what Murdoch thinks of Google and its $100 million Google News operation, Bernstein analyst Jeffrey Lindsay told Reuters that the aggregator is responsible for roughly 14% of incoming traffic to News Corp. sites.

That's an issue. Bing is growing, but it doesn't have a reputation for news delivery. Nor has it positioned itself to be a digital paperboy. Instead, Microsoft wants you think of Bing as a "decision engine."

Second, I can't imagine readers using Bing to find the most important News Corp. content. Say The Wall Street Journal breaks a big story, as it did when it reported that Apple (Nasdaq: AAPL  ) CEO Steve Jobs had undergone a liver transplant.

Would News Corp.'s blocking of Google News have made a difference? Would users have flocked to Bing instead? Of course not! The varying newspapers of New York Times Co. (NYSE: NYT  ) , McClatchy (NYSE: MNI  ) , Gannett (NYSE: GCI  ) , and so on would have reported the story, crediting the Journal as their source. And every one of those stories would have appeared at Google News. Insatiable readers would have jumped straight from wherever Google took them to WSJ.com, where subscribers would have accessed the report in its entirety.

Finally, there are the brand ramifications. Does Microsoft really want to be the digital version of Murdoch News Channel? Unless news organizations were to abandon Google wholesale -- unlikely, in my view -- Bing would be the place you go if you want to check what's being reported by Fox. I'd expect Journal readers to stick with WSJ.com and their Yahoo! Finance ticker feeds.

Bing is better than this, Microsoft. Don't let Murdoch's petty feud with Google ruin one of your better products. But I've had my say. Now it's your turn to weigh in. Should Mr. Softy take Murdoch's money?

Apple is a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended a diagonal call on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy would like to invite you over for tea, but it doesn't drink.


Read/Post Comments (8) | Recommend This Article (4)

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  • Report this Comment On November 24, 2009, at 12:31 PM, eltoro2827 wrote:

    I believe the partnership with news Corp would work in microsofts advantage. Bing is good but not great.... Adding more news articles to bings new section would be great for new bingers.

    I for one am all for the new deal.

  • Report this Comment On November 24, 2009, at 1:58 PM, TMFBent wrote:

    They should absolutely do this deal, and if they do, you can expect more to follow. And they won't all be with Microsoft. News organizations have given Google and others a free ride for a long time, with the purported payoff being "traffic" generated by these aggregation and ad machines.

    What news operations have really gotten in return from Google and others is losing their advertising revenue. Now, news organizations brought most of this on themselves by not figuring out what their operations were worth online, and not figuring out how to earn it. But that's no reason they should give up now and give Google the benefit of all their work without getting the best deal they can. If so far, Google's bid for monetizing traffic on news organizations' valuable IP is "zero" then you will probably see that situation change.

    This is not a petty feud but a completely rational response to the threat of Google, the world's most successful Internet lamprey.

    Sj

  • Report this Comment On November 24, 2009, at 2:06 PM, Turfscape wrote:

    TMFBent wrote:

    "Google, the world's most successful Internet lamprey."

    Okay...I like that. I like that a lot and will most likely steal it for use in casual conversation. I thank you in advance for that!

  • Report this Comment On November 24, 2009, at 2:32 PM, Matt015 wrote:

    I hope Microsoft doesn't bite.

    News Corp wants all of its online content to be subscription based. That is just fine but why should Microsoft pay for the rights to link to a story that is locked to most users?

    Microsoft wouldn't be creating any value because most searchers wouldn't even care about the locked content from News Corp., they would just surf back to the closest, open, news article.

  • Report this Comment On November 24, 2009, at 3:10 PM, TMFBent wrote:

    Use it in good health. I probably stole it from someone else, anyway.

  • Report this Comment On November 24, 2009, at 3:11 PM, TMFBent wrote:

    @turfscape

    Use it in good health, my friend. I probably stole it from someone else anyway.

  • Report this Comment On November 24, 2009, at 3:49 PM, ARJTurgot wrote:

    I happen to believe that markets work.

    NewsCorp goes to MS only, and the NY Times benefits because it will move up in the queue of items at google that might otherwise get diverted to NewCorp. I highly doubt the NYT is going to agree to anything NewCorp proposes.

    MS gets associated with Faux News. Now that's really going to help them sell software among the young, and the college educated who are now tending away from the FoxNews approach to politics.

    MS missed the boat on the I-Net, it is now faced with a disruptive technology that is killing its ability to extend its monopoly. If it really dives into the inet the way it could, it would probably kill Windows because it would have to end up competing with its desktop products.

    IBM faced the same problem in the early '90's - knew the PC was killing the mainframe but couldn't walk away from its cash cow.

    Tres' funny that MS should be suffering the same fate. Never liked the arrogant little pri**s I met from MS. It'll be really funny when the mass layoffs start.

  • Report this Comment On November 24, 2009, at 3:52 PM, ARJTurgot wrote:

    I happen to believe that markets work.

    NewsCorp goes to MS only, and the NY Times benefits because it will move up in the queue of items at google that might otherwise get diverted to NewCorp. I highly doubt the NYT is going to agree to anything NewCorp proposes.

    MS gets associated with Faux News. Now that's really going to help them sell software among the young, and the college educated who are now tending away from the FoxNews approach to politics.

    MS missed the boat on the I-Net, it is now faced with a disruptive technology that is killing its ability to extend its monopoly. If it really dives into the inet the way it could, it would probably kill Windows because it would have to end up competing with its desktop products.

    IBM faced the same problem in the early '90's - knew the PC was killing the mainframe but couldn't walk away from its cash cow.

    Tres' funny that MS should be suffering the same fate. Never liked the arrogant little pri**s I met from MS. It'll be really funny when the mass layoffs start.

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