BuzzMachine

The media pundit's pundit. Written by NYC insider Jeff Jarvis, BuzzMachine covers news, media, journalism, and politics.

  • Murdoch madness

    21 comments on Murdoch madness

    I’ve had a fair number of press calls on the Murdoch/Bing sillliness and here are the points I’ve been making:

    Were Bing to pay News Corp. to drop Google, it would be a double-play in Google’s favor: Microsoft would lose money and gain little. News Corp. would lose traffic, shifting away from the search engine with more than 60% penetration in the U.S. and more than 80% in the U.K. to one that has 10 percent here – and that’s just the search engine; it doesn’t account for the disparate popularity of Google and Bing News.

    See this post: WSJ.com would lose 25% of its inbound web traffic, according to Hitwise, which also says that 15% of the people who come to WSJ.com on the web come from Google immediately prior and 12% come from Google News. Would Google be hurt? Note in that same post the German consultancy’s calculation that all the top publishers in Germany, representing more than 1,000 brands, account for only 4.1% of top search results vs. 13.6% for Wikipedia. Let me repeat that: Wikipedia comes up in the most valuable position in search three times more than all the top publishers of Germany combined.

    News Corp. leaving Google would be a mosquito bite on an elephant’s ass. Unnotice by Google or by the audience. For there will always be – as Murdoch laments – free competitors: the BBC and Australian Broadcasting Corp, which he and his son complain about, not to mention the Guardian, the Telegraph, NPR, CBC, and any sensible news organization worldwide.

    This silliness is emblematic of the end of the Gutenberg age, the industrial age, the age of control, the age of centralization, Murdoch’s age. The problem here is that Google-virgin Murdoch simply does not understand the dynamics of the link economy. He roars against them. Google et al do not take his content, they send it audience and value. It is up to him to exploit that. The business failure here is Murdoch’s, not Google’s.

    I also emphasize that we’re talking too much about just revenue. A key dynamic to the new economics of news is cost: getting rid of not only printing and distribution infrastructure but also the resource devoted to commodity news, which can now be eliminated thanks to the link economy (do what you do best, link to the rest).

    But let’s not forget that this all may be so much macho strategizing: business chest-thumping. News Corp. must renegotiate its reported $300 million guarantee for MySpace from Google, in which MySpace reported underperformed badly. Much of media is falling for the spectator delight of watching Murdoch, Microsoft, and Google in Tokyo Bay. But I think it’s bullshit. It’s not going to happen. If it does, few will notice or care…. except media reporters forced to write this up.

    Also… Murdoch himself says that Bing and even Google couldn’t afford to pay all content providers. And for what? For linking to them and giving them value? If anyone were paid – which would be, as Google CEO Eric Schmidt says, would only be another form of subsidy (read: charity or blackmail) – who’s to say that Rupert Murdoch should be paid more than Josh Marshall? Or Wikipedia?

    : Here‘s audio and a transcript of my interview on ABC (Australia).

    And on NPR’s All Things Considered.

    Reuters’ report here.

    More from the BBC and Canada’s Financial Post.

  • The half-life of news

    20 comments on The half-life of news
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    At a Yale conference a week ago, Thomson Reuters CEO Tom Glocer talked about the life cycle of the value of news in his business.

    When a piece of financial news come out, it is at its most valuable for a very short time, he said. I asked him later how long that is. “Milliseconds,” he replied. Milliseconds. That’s as long as a computerized trader has to take advantage of news before the market knows it, before the news is knowledge and is thus commodified and loses its unique and timely value.

    Reuters still gets high value out of its news in stages, turning this tidbit into a headline and a story and selling it as part of its financial data services and then its wires. It finally lands on Reuters’ web site, visible to consumers, where Reuters collects ad revenue directly. That, Glocer said, is about 2% of Reuters’ revenue.

    Of course, one can’t view this timeline in isolation. The news is being spread in all kinds of vectors: other news organizations get it and it’s masticated and repeated in print (slow), on broadcast (faster), on websites (faster), by aggregators (faster), by conversation (aka Twitter – getting faster all the time). The faster that distribution is, the quicker news becomes knowledge and thus a commodity, the faster it loses its unique, saleable value. And that chain is getting only faster.

    And that, ladies and gentlemen, is one reason why trying to lock up the value of news behind a wall won’t work, in my estimation.

  • Newspapers want enemies, not friends

    4 comments on Newspapers want enemies, not friends
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    On today’s On Point, Michael Wolff, Steve Brill, and I talked about Murdoch and Google and the show’s blog quoted me thusly:

    But News Corp isn’t the only one making the mistake here. I think the mistake that Google has made in this – and I’m an admirer of Google, I wrote a book to that effect – but I think that Google thought that they could become friends with the newspaper industry. And the newspaper industry isn’t looking for friends. They’re looking for enemies they can blame for the problems that are actually their own from the last fifteen years of inaction in the face of this dying light. And so it’s impossible for Google to become friends with the newspaper industry.