Microsoft Gets Aggressive

In case you missed it, the Times (New York, not Seattle) reported this morning on rumors that Microsoft is talking with News Corp., Rupert Murdoch’s media empire, about an exclusive marketing deal that would make News Corp. content only searchable through Bing, Microsoft’s search engine.

Such a deal, if it turns out to be true, would be quite significant.

For starters, it would mean that Microsoft is rediscovering its former level of aggressionthe same kind that got it into trouble back in the antitrust/browser wars days, but also the same kind that made it into the dominant player for a while. Here it has this brand-new product, Bing, which by many accounts is a half-decent product (unless you use Simplified Chinese, in which case it appears that Microsoft has taken to censoring the search results based on the language used in the searchingthat used by mainland Chineserather than the location of said searcherinside mainland China; but I digress.) But Bing has less than 10 percent of the search market. Yes, Google has about a 10-year head start on Bing. But if the two search engines yield comparable results, shouldn’t the law of the marketplace allow the two to compete on equal terms, and may the best algorithm win?

Well, Microsoft has never been shy about spending its billions of cash reserves to try to corner the marketplace, whether its products could compete with the best (Bing, Xbox) or not (Windows Vista, ME, 2000, 98, etc.). And to the extent that it helps our local employment center be more successful, we should be appreciative. But there are a couple of dangerous points to watch out for.

One, the “walled-garden” approach to internet content never really worked. It’s why AOL is now a shadow of its former self. People use the internet because it is open and free. The more you try to hem them in, the more they resist, until they either give up or go elsewhere. If Bing will give you access to News Corp. content, what’s to stop Google from cutting a similar deal with another big media propertythe New York Times Co., for example, or Disney-ABC? Who do you think will deliver more web surfers to advertisers? Or will surfers grow tired of trying to figure out which search engine will take them to which sites and find something more productive to do with their time?

By putting News Corp. behind the Bing wall means that Microsoft is becoming a gatekeeper for all sorts of content. (News Corp.’s properties include the Fox TV and Fox News cable networks, the New York Post, the Wall Street Journal, the Sunday Times, a few properties Down Under, the Sun, home of the Page 3 Girls, and much more.) Rupert Murdoch has long complained about Google “stealing” his properties’ content, so much so that you wonder if Murdoch understands what a hyperlink is. But yes, he wants to make money off his content, and he tends to favor the Wall Street Journal’s pay wall as a model. The danger there is that the Wall Street Journal’s model works because its content is unique and you can’t get it anywhere else. It’s the paper of the elite that run the world, as the old joke goes, and while people will paythey need toto read it online, will the same hold true for the New York Post, or the Sun?

The biggest danger of all this is that it leads to a cascading effect, where walled gardens again become the norm on the internet, a trend aided and abetted by old-line media companies that are desperately trying to generate revenue from their online services to replace what they lost from classified advertising. That’s not a situation that benefits consumers, advertisers, old-line media companies or anyone else. Except, perhaps, for the gatekeepers.

Expect this fight to get bloody.