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Murdoch accuses Google of news 'theft'

News Corp.'s chairman calls the use of the media company's content by Google and other Web firms an 'almost wholesale misappropriation of our stories.'

December 02, 2009|By David Sarno
  • News Corp. Chairman Rupert Murdoch greets Arianna Huffington after speaking at the Federal Trade Commission in Washington on "How Will Journalism Survive the Internet Age."
News Corp. Chairman Rupert Murdoch greets Arianna Huffington after speaking… (Robert Giroux / MCT )

Escalating the battle between traditional newspapers and online news providers, media mogul Rupert Murdoch lashed out at Google Inc. and other Web companies Tuesday, accusing them of looting news articles and contributing to the industry's decline.

"There are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production," Murdoch said at a Washington forum on the future of newspapers. "Their almost wholesale misappropriation of our stories is not fair use. To be impolite, it's theft."

The remarks by Murdoch, the chairman of media conglomerate News Corp., which owns or publishes dozens of newspapers including the Wall Street Journal, the New York Post and Britain's The Times, were the latest salvo in a verbal war against Google and other news aggregators -- sites that comb the Web for headlines and gather them all in one spot, usually without paying news organizations to do so.

Murdoch has vehemently condemned the practice, which he has partly blamed for the industry's woes. Dozens of newspapers have closed and thousands of jobs have been lost in the last several years.

Seeking to stop the hemorrhaging, the Australian publisher has been looking for ways to require users to pay for online news -- a service that's been free since the World Wide Web took hold in the mid-1990s.

News Corp. has been discussing the idea of joining with other newspaper publishers to form a consortium that would charge for news distributed online and on portable devices. The media company's chief digital officer, Jonathan Miller, has explored the proposal with major news publishers including New York Times Co., Washington Post Co., Hearst Corp. and Tribune Co., publisher of the Los Angeles Times.

As part of that controversial plan, Murdoch is threatening to "de-list" his content from Google, meaning that the search engine would no longer be able to guide users to articles from any of News Corp.'s dozens of publications.

Last week, reports surfaced that News Corp. has been in early-stage talks with Google rival Microsoft Corp. about a deal by which the software giant would pay News Corp. to keep articles from being listed in Google searches. Under such a pact, News Corp.'s articles would be available through Microsoft's search engine, Bing.

Google has become a primary means by which users find news online. The company says it sends 100,000 clicks to news sites every minute. But Murdoch and News Corp. executives have said that many of those users are worth less to advertisers because they stop in to read just a single article before moving on to another site. In general, advertisers prefer users who are more likely to stay on websites and browse.

For Murdoch, threatening to block Google amounts to a game of media chicken, analysts said.

He could either lose a big chunk of his audience or manage to finally scare Google and other search engines into paying for the newspaper content they share with their users.

"It's a great idea," said Laura Martin, a media analyst at Needham & Co., a New York-based investment bank. "There's got to be revenue sharing at some level, and right now, Google is sharing none of the revenue. Under their model, high-quality content will not survive in the long term."

But other observers say that newspapers are ill-advised to muscle Google into sharing revenue, and should instead invest in ways to wring more value from each visitor.

"When Murdoch says most of these people are not worth anything, they just may not be marketing to them properly," said Danny Sullivan, editor in chief of Search Engine Land.

"I just don't know anyone who says that when I have millions of people who visit me, there's nothing I can do with them," Sullivan added. "What business person thinks that way?"

In the gloomy and often rancorous debate about the future of print journalism, there's only one fact upon which everyone seems to agree: Newspapers aren't making enough money online.

Thanks to the global nature of the Internet, newspapers have been able to reach much larger and more far-flung audiences than their print editions ever could. But converting digital readers into profits is a formula that has eluded even the largest media companies.

Instead, those companies have endured falling revenues and shrinking head counts as vital advertising dollars have followed readers off the printed page and onto the Web.

And newspapers are no longer collecting most of those dollars. Over the last decade, a legion of powerful technology firms, led by Google, has captured much of the revenue that, in the pre-digital era, might have gone to newspapers and magazines.

By year's end, newspaper advertising income will have dropped nearly 45% since 2006, said Rick Edmonds, a Poynter Institute media analyst.

Google, on the other hand, has repeatedly shown it can generate ad revenue by attracting users to its panoply of features -- not only its search engine but also its e-mail, photo, book and YouTube services. Based largely on revenue from those ads, the Mountain View, Calif., firm is on track to make close to $22 billion this year.

News, too, is one way Google draws users to its advertiser-supported sites. The company tracks more than 25,000 news and blog sources, enabling users to find the latest news on almost any topic. Monthly visits to Google News number in the billions but the site does not pay for the articles.

"Producing journalism is expensive," Murdoch said. "When this work is misappropriated . . . it destroys the economics of producing high-quality content."

david.sarno@latimes.com

Times staff writer Dawn C. Chmielewski contributed to this report.

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