Original URL: http://www.theregister.co.uk/2009/11/17/murdoch_google_analysis/

Murdoch: Google is mortal and together we can kill it

Or at least tame it

By Andrew Orlowski

Posted in Media, 17th November 2009 13:02 GMT

"Everybody loves the BBC and it doesn't cost anything, Murdoch should learn a thing or two." - Comment by reader 'peter 3' at The Register

Everyone's missed the clever part of Rupert Murdoch's broadside against Google last week. Murdoch said he'd block Google from spidering his websites' content, and may use litigation against public broadcasters such as the BBC, who use material spawned in his papers. The conventional wisdom from web gurus was that he was off his rocker, and his comments were the last gasp of a Luddite. And that shows you what the conventional wisdom of web pundits is worth.

What Murdoch has done is say the unspeakable. He's offered a roadmap for taming Google - and a re-ordering of everything we take for granted about the web today. He can't do so alone, which is why his real audience included media and entertainment executives who lack the courage to think such heresies. But he invited the prospect that without its expensively-produced material, Google stops being the omnivorous destroyer of their livelihoods they suppose it is today. And this, in turn, means Google's own investment decisions today may be horribly misplaced.

But let's wind back a moment - you need to see the contours of the set in this particular drama.

Although they'd never admit it, Rupert Murdoch and Google have one thing in common: both benefit from their powers being exaggerated to almost mythic proportions. Google is supposedly the destroyer of all businesses in advertising, media and entertainment who dare defy its rules. It has the wisdom of a prophet - it's a modern Jesus, the loopier web evangelists want us to believe.

Similarly Murdochs is an omniscient Bond villain who apparently has Governments in his pocket, and has the power to crush the tiny embattled public sector. (Jonathan Pryce played a media tycoon called Elliot Carver in Tomorrow Never Dies.) The name "Murdoch" is enough to provoke a Five Minute Hate in any polite North London media circles.

Both live up to their reputations, too, because doing business is easier that way.

In fact they're very mortal indeed; both "empires" are somewhat less than imperial - they're uniquely vulnerable, in their respective ways. Murdoch operates in a fiercely competitive field, seeing production and distribution costs remain high but ad rates fall, and he's at the mercy of politically motivated regulators. The recommendation to strip Sky of English cricket broadcast rights - which it won fairly at auction - and hand it to the Beeb, which didn't even bid, is a sharp reminder of how business works at the whim of politicians.

For its part, Google is (still) a one-trick pony, and regular readers of our investigations into its "black box" auction system know how vulnerable that is - both to gaming, and regulatory intervention. Google is permitted to set the price of doing business on the internet, a state of affairs that cannot last indefinitely.

What Murdoch did last week is invite us to contemplate Google's mortality. It's quite simple.

If Murdoch blocked Google's spiders, and others followed suit, then the value of Google search index would fall dramatically. It wouldn't go away, but a company whose mission is to "organise the world's information" has a unique problem. If it can't access that information, then the mission statement will never be fulfilled.

What Google would be left with is an apparatus - created at great expense - for collecting much of the world's garbage. Google becomes the world's most stupid tape recorder - collecting all the dross that was never intended to be recorded - drivel, overheard. Much of this is spam, created by bots; much of the rest is chatter.

There's good stuff out there - we'd like to think we're one of the exceptions that proves the rule - but outside of businesses that have built a strong niche they're few and far between. Public broadcasters such as the BBC and ABC (two organisations singled out in his interview for leeching off print), would continue to pump out web material. But these are swamped and suffocated by the chaff, all eaten by the Pacman.

Google's Achilles heel, which as I noted here six years ago, is one that's hidden in plain view:

Google's aggressive, but essentially dumb robots can only get so far. We're painfully aware that Google's lack of specificity leaves its robots chomping through thin air, dead pages, or trackbacks, more often than not.

It's the lack of specificity, the indiscriminating nature, that's the weakness of the blind bots. And that means the Google method - chomp, collect, then analyse - is wrong. It's not the the smart way to deal with content in a sophisticated world.

And what Google has got wrong is thinking the web is primarily a medium - which it is - when it's mostly used as a communications tool. The people who were supposed to "get" the web the most, because they had recorded most of it, had it wrong all along.

The question 'What Would Google Do?' is nicely turned around. Google could stop indexing the junk, for a start. As the largest internet advertising broker, Google would remain an important internet player. But its weakness would be apparent to all: it can no longer set the price for content owners, as it wants to. And with the primary revenue stream finite, it may want to start cranking up other revenue streams, such as its Cloud initiative, while getting some sandbags.

So although Murdoch was lambasted as a Luddite who doesn't "get it", it seems he "gets" the medium as well as anyone - it's a Balkanised and fragmented place, and with strong and distinctive brands, this can be turned to his advantage.

Getting to there isn't something News Corp can do on its own. But much as they may fear him, all the commercial rivals share a common purpose - they'd dearly love him to be the battering ram, bashing down a door they could all run through.

May Rupert have another agenda? I don't think so.

The Phantom Tollbooth

One idea touted this week is that large media companies could strike deals with search engines, so that Bing would feature exclusive Associated or News Corp content. The loonier elements on the paranoid fringe naturally sees this as a bid to become an internet gatekeeper. The call has already gone out to regulate search engines so such deals could not be possible.

An exclusive deal between, say, News Corp and Bing creates a little scarcity. But unfortunately for Microsoft and Murdoch, it simply doesn't create enough - there isn't enough value in the audience. Like every content company, Murdoch would love someone big, rich and foolish to hand over millions for licensing the material exclusively. But since Murdoch's primary goal here is to make buying the newspapers more attractive, it would devalue his own planned tollbooth.

And for Microsoft, there isn't enough to merit paying out many millions to media companies - once surfers have the site bookmarked, they know where to go. Or can guess. So it could fund media companies simply to spite Google, until common sense kicked in.

Search engines and media companies are more likely to collaborate on building revenue platforms, but they remain uneasy partners. In publishing, you want to know more than Google does about your readers - so you can package that and deliver it to the advertisers, and be in control of your own destiny. Comments by Telegraph digital supremo Ed Roussel that newspapers should outsource everything except the vital job of rewriting press releases and pinching Fark stories [Did he really say that? - Ed] show how far apart Murdoch and his digital rivals are.

Really it's a cultural divide. The web divisions at media companies - who can speak fluent "clayshirky", quote from Freakonomics and are invariably Twittering at a New Media conference - haven't brought home the goods; media company boards and shareholders now see them more as part of the problem than as the solution.

So if others follow Murdoch's advice, leaving Google to collect the world's Tweets and trackbacks, it's hard to imagine how the triumphant web utopianism could ever return. ®