News Corp. is reportedly in early stage discussions with Microsoft about taking content off Google, and putting it exclusively on Bing.
While we are highly sceptical of this ever happening, we would love to see it, as it would be an interesting experiment, which wouldn’t cost either company too much.
Microsoft should not waste time negotiating for exclusive right to all of News Corp.’s news sites. It should just ask for the crown jewel — the Wall Street Journal.
When Rupert Murdoch first started jawboning about ditching Google, Hitwise reported that the Journal had 25% of its traffic come through Google. Using Hitwise’s data, we calculated losing that traffic would only cost the Journal 10-15% of its revenue.
If we estimate that the Journal’s online ad revenue is $100 million, using the New York Times as a rough benchmark, then the site would only lose $10 – $15 million to de-list from Google.
If Microsoft really wanted to induce Murdoch to ditch Google, it would therefore only cost $10 – $15 million. Maybe more if Murdoch wanted a premium. Considering Steve Ballmer said he’d spend $5.5 billion to $11 billion over the next five years on Bing, this is nothing.
At that price, Ballmer has purchased an exclusive piece of content, as well as promotional tool for his upstart search engine. Can’t you see the ads now? “Bing: The only search engine with The Wall Street Journal in it.”
Both parties could make the deal just one year long and treat it as an experiment.
If it works out, it has the potential to change search, and the news business. If it fails, no big deal.
Microsoft has burned a few million more on the Internet, and Murdoch goes back to Google with his tail between his legs.
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