Google extends olive branch to Murdoch

He's threatened to sue them. But Google says it just wants to be Rupert Murdoch's (money-making) friend.

Last Updated: 23 Sep 2010

Rupert Murdoch has been very vocal in his complaints about Google lately – the newspaper mogul has accused the search giant of effectively stealing his content by including headlines from News Corp titles in its search results, even threatening court action over it. But Google seems keen to kiss and make up: yesterday, chief exec Eric Schmidt told reporters that he's been holding talks with Murdoch (et al) about the various ways in which Google might be able to help newspapers make money. And that, after all, is the way to Murdoch’s heart...

Newspapers have traditionally had three big revenue streams – advertising, subscriptions and transactions – and Google argues that only the first of these has been successfully transferred to the online area (and they’ve been one of the main beneficiaries). However, Schmidt suggests that Google could also be useful on the other two fronts, by helping the likes of News Corp operate subscription services, paywalls or micropayments (possibly via Google Checkout, its PayPal equivalent). Apparently Google has already been talking to Murdoch about this. And Schmidt insists there’s no reason for the two sides to be at loggerheads: ‘We are a platform, not a competitor to newspapers'.

That’s all well and good, but we’re not convinced the newspapers will entirely buy it. Murdoch’s beef is that Google effectively makes money off his content by selling ads against the results of its news searches. Although this does drive traffic to his sites and thus helps him sell more ads too, there’s a limited pot of ad revenue – and Google is taking a huge chunk of it. That's partly why Murdoch’s putting the Times and the Sunday Times behind a paywall, and withdrawing their headlines from Google at the same time.

The Google ethos of pushing out free content to the widest possible audience is not really in keeping with Murdoch’s own approach. But there may be areas of joint interest. Google co-founder Larry Page argued against micropayments at the Zeitgeist Europe conference yesterday, suggesting that users would consume more content if they didn’t spend their whole time thinking about what they were spending. But if Google produces a general subscription model that News Corp and others could use, allowing them to reach a wider audience that can then be persuaded to fork out for content, that may be a win-win for everyone.

So not quite a cessation of hostilities, but an olive branch nonetheless. Murdoch will presumably feel a lot more positive towards Google if it can help make his paid-for content gamble a success.

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