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Stock of the Day
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News Corp. (NWS)
News. Corp Considers Removing its Content from Google
At first, the public might be puzzled by such a deal. Why would major content publishers such as News Corp. (publisher of the Wall Street Journal, the New York Post, and other major news publications) want to remove their content from popular search engine Google (GOOG: Charts, News, Offers)? As strange as it seems, it was disclosed this weekend that News Corp. has had initial talks with Microsoft (MSFT: Charts, News, Offers) which have indeed revealed such an arrangement this to be a possibility. What do these two companies have to gain from this deal, and what effect might it have on the future accessibility of news via search engines.
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Let's start by looking at News Corp. Rupert Murdoch, CEO of News. Corp, has been looking for a way to better monetize his online content. He is not alone in his desires, as the Associated Press has similarly been fighting to keep other sites from republishing their content without paying for it. Murdoch has long-desired to move more towards paid content, but keeps hitting roadblocks; for example, much of the content on the Wall Street Journal's website is only accessible to subscribers, however non-subscribers are able to access that same content simply by accessing the Journal's website via Google or another search engine. The primary reason for News Corp. removing their sites from Google would be a financial motivation, an attempt for the company to make more money from its online content.
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There is no denying, however, that News Corp.'s websites do get a lot of their traffic from Google, which they would lose by removing their sites from the search engine. So, how is News Corp. hoping to overcome the risks of such an arrangement? By making a deal with another company, such as Microsoft, as Microsoft has actually initiated similar conversations with other companies in the past. If a deal was to move forward between the two companies, it would likely involve Microsoft paying News Corp. a substantial fee, and in return News Corp. would remove their content from Google's search engine. The benefit for News Corp., again, is financial.
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Interestingly, the major benefit for Microsoft would be the crippling of its major competitor, Google. In making this deal, Microsoft would be hoping that the public would eventually become frustrated that they could not find their desired content on Google, and then switch to using Microsoft's search engine, Bing. This, of course, is a risky move by Microsoft. In order for Microsoft to convince News Corp. or any other company to remove their content from Google and lose all the traffic which Google currently brings them, the financial part of the deal would have to be significant. And in return, Microsoft could maybe do some damage to a competitor, but with no guarantee that there would be a visible benefit to itself. Perhaps most consumers are too set in their ways to switch their search engine preference, or maybe they won't even care that those particular news sites are no longer visible from Google and they will simply get their news from other sources. At this point, News Corp. might be highly in favor of a deal since it aligns with its goals of reducing the amount of free content, but in all honesty it seems like this deal could be a waste unless Microsoft is able to convince most of the major players in online news content to arrange similar deals. As much as Microsoft may want to hinder Google and steal away its traffic, before moving forward the company should make sure there is a reasonable possibility that their desired results will actually come true.
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News Corp. Commentary:
Time Warner, News Corp reported interested in MGM - Over the weekend, it was revealed that a few companies have expressed interest in purchasing Metro-Goldwyn-Mayer film studio, including Time Warner (TWX: Charts, News, Offers), Sony (SNE: Charts, News, Offers), and News Corp.
Is MySpace Buying Imeem? - With MySpace (owned by News Corp.) expected to purchase Imeem, an online music website, for merely $1 million, the future of online music websites does not seem very bright.
James Murdoch signals reduced role for his family's newspapers - Somewhat unsurprisingly, as the company is in the midst of deals with film and music companies, James Murdoch recently announced that he believes the future of News Corp. is in the entertainment industry, rather than news.
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More Stocks in the News:
Love it or Loathe It? AOL Reveals New Branding - AOL (currently owned by Time Warner (TWX: Charts, News, Offers) but shortly going public as its own company) revealed new branding and logos, as well as a capitalization change, now being known as Aol.
Tyson Foods Tops Expectations in Fourth Quarter - Food companies including Tyson Foods Inc. (TSN: Charts, News, Offers) and Campbell Soup Co. (CPB: Charts, News, Offers) did better than expected this past quarter, and are expecting continued improvements into next year.
Ciena to buy Nortel's Ethernet assets for $769 million - Ciena Corp (CIEN: Charts, News, Offers) beat the competing offer from Nokia Siemens (NOK: Charts, News, Offers) in order to purchase the Ethernet segment of Nortel Networks, despite concern that Ciena may not have the resources to easily integrate the two companies.
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