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Newspapers Face the Prisoner’s Dilemma With Google

November 27th, 2009 11:28 admin Leave a comment Go to comments

Hugh Pickens writes “Nicholas Carr has an interesting analysis of Rupert Murdoch’s threat to de-list News Corp’s stories from Google and Microsoft’s eager offer to make Bing Murdoch’s exclusive search engine for its content. Carr writes that newspapers are caught in a classic Prisoner’s Dilemma with Google because while Google’s search engine ‘prevents them from making decent money online — by massively fragmenting traffic, by undermining brand power, and by turning news stories into fungible commodities.’ If any single newspaper opts out of Google, their competitors will pick up the traffic they lose. There is only one way that newspapers can break out of the prison — if a critical mass of newspapers opt out of Google’s search engine simultaneously, they would suddenly gain substantial market power. Murdoch may have been signaling to other newspapers that ‘we’ll opt out if you’ll opt out,’ positioning himself as the would-be ringleader of a massive jailbreak, without actually risking a jailbreak himself. There are signs that Murdoch’s signal is working with reports that the publishers of the Denver Post and the Dallas Morning News are now also considering blocking Google. In the meantime, Steve Ballmer is more than happy to play along with Murdoch because although a deal with News Corps would reduce the basic profitability of Microsoft’s search business, it would inflict far more damage on Google than on Microsoft.”

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