News Corp/Microsoft's threat to Google: thin

News Corp in talks with Microsoft to abolish Google's free access to news content

After a year of complaining about Google and how it's murdering the old-fashioned news business, News Corps chairman and CEO Rupert Murdoch is finally initiating what looks like an early stage attack on the search behemoth.

And he's doing it by talking to Google's least biggest fan: Microsoft.

The tech news world was in a flurry Monday, since it was revealed that Microsoft and News Corps were in talks to figure out how to make real Murdoch's vision of a news world where Google has no more free access to news content. Some speculate that Microsoft, more than eager to shell out tons of cash to peck away at Google's massive market penetration, could be negotiating a deal with News Corps so that only Bing could index its news content.

According to the latest report from Bernstein Research, however, this such a strategy would be doomed from the start. In the report, senior analysts Jeffrey Lindsay and Michael Nathanson outline just how permeating and powerful Google's influence really is--something Murdoch should not neglect if he is serious about fixing the news business.

Google is solely responsible for almost 15% of traffic seen by all News Corps U.S. news Web sites (Dow Jones Properties, Fox News, the New York Post). If News Corps means to actually hurt Google, and not just itself, it will have to convince both AP and Reuters to agree to a "cartel" against Google access to indexing of news pages--the idea is to force Google to pay the same access fees as Microsoft is allegedly offering to pay for Bing.

Such a cartel would be quite flimsy, for it could easily be undermined by just one major news source breaking ranks. Even if the ranks stood firm (domestically), says Bernstein Research, international news sources could easily fill the niche and reap the rewards of being the number one stop for news from Google.

On top of everything, Bernstein's report rightfully predicts that any motion on News Corps and/or Microsoft's part towards restricting access to information via a pay gate would set consumers and the Electronic Frontier Foundation (EFF) on fire: whenever net neutrality is involved, Google and its millions of fans are not to be taken lightly.

If Murdoch wants a quick and easy strategy to fix the news business, he better start looking elsewhere.