• http://makeitrank.com KevinSpence

    The AP & other news companies forget how much of their content is syndicated. So alright, maybe they block Google from indexing their content directly. But thousands of other news sites across the globe already syndicate the same content, so it’s not like these stories would all of a sudden vanish from Google’s index.

    As you elude to Danny, we often forget about the little guys in the news world who make up the bulk of subscriptions nationwide. Most local newspaper sites (I’m not talking WSJ or NYT, but the local everyday American sites) get a huge percentage of their traffic (think 75%) from obits and weather. Now, they just use vendors that provide that content and put their wrapper around it.

    Thankfully for them, obits and weather sponsors are the easiest and most profitable to sell. So they don’t want to turn that away, as they’d never make the money back in a small area with online subscription fees.

    So I don’t see most news providers shutting the door on google. Maybe some of the big guys could, but the industry as a whole could not afford to.

  • kloeprich

    The recent news confirms suspicions I’ve had that News Corp and MS were already in negotiations with knowledge of that almost certainly fueling some of News Corp recent bluster. It also occurs to me that News Corp might be providing some proxy cover for MS: “Hey, we’re not trying to monopolize anything, News Corp came to us.” And you can certainly frame the exclusive rights as simply a business decision – MS/Bing will pay, Google won’t.

    News Corp’s value to Google might be nominal in and of itself but it’s hard to believe this wouldn’t open the floodgates to a series of deals. We’ve already seen that Google is willing to license content, witness AP & Twitter. The idea that these other properties have no value and that Google would not involve themselves in the bidding seems at least as much of a false front as Rupert threatening to throw everything behind a pay wall.

    If this happens I think the questions become how many “exclusive” deals does it take to make Bing relevant? And how many of those deals go down before Google has to sit up and take notice?

  • http://dlmcdonough dlmcdonough

    this is an awful piece of analysis…you do some basic math that seems sensible enough until you come to your “what are these people worth?” opportunity cost assumption…you throw out $0.50/day/user as you wild guess…”and maybe more” Huh?? If you assume that the WSJ sells out all their display media on all pages that these people land on at an average of $10, (a high assumption, even for WSJ, for avg sell out ecpm for all impressions on all pages…remember: if there are three units per page, this assumes WSJ.com will sell out all pages on the site at a $30 average page CPM)…but let’s assume $10 CPM for all impressions…that means these people WSJ loses from google would have to be people who AVERAGE 15-20 page views, per day, every single day, AND that all 15 of those page views are sold out at a $30 page ECPM…That is idiotic…these are people who click on a link from google to get to WSJ, and who likely average 1 page view per visit from google, and fewer than 5 visits per month. Your assumptions for opportunity cost are off by at least an order of magniutude, and probably more than that.

  • pstinchcombe

    Wait a second — a referral is worth 50 cents per day on days other than the day on which the referral took place? You seem to be suggesting that each of those people who are referred to WSJ by Google keeps coming back every day. Otherwise, the calculation should go like this:
    1 million people per month referred by Google
    x 50 cents per referral (the same value, assuming that referral only uses the site that day)
    —–
    $500,000 per month, or about $6 million per year.

    This is a far cry from $180 million — which is only accurate if you believe that each of those people comes back, without a new Google search, every day for a month.

    While Bing almost certainly can’t afford to pay WSJ $270 million per year for exclusive access to its content, it almost certainly can afford $9 million per year.

    An alternative estimate comes from the fact that current WSJ.com revenue is about $78 million annually — if Google accounts for 25 percent of that (based on the new figures which include Google news, and generous because it assumes _none_ of that revenue comes from people who went straight to WSJ.com without a referral), that’s a Google-based revenue of about $20 million, or a cost to Bing of $30 million to half-again it. That’s not cheap, but it does indicate the previous commenter was right that you were off by an order of magnitude.

  • http://dlmcdonough dlmcdonough

    here is another, also much better napkin analysis of news corp opp cost, (approx $10-$15M per year revenue loss if it turns off google): http://www.businessinsider.com/microsoft-should-pay-up-for-exclusive-access-to-the-journal-2009-11

  • http://searchengineland.com/ Danny Sullivan

    Thanks, everyone, on the pokes about the numbers. I did say “maybe they earn a lot less.” But to make it absolutely clear, I was simply guessing at some numbers to start a discussion.

    We don’t have many numbers out there. Murdoch hasn’t put some of that I’ve seen much of. I’m looking forward to trying and clear some time to perhaps explore that more.

    But remember. Former Forbes.com CEO Spanfeller suggested Google was somehow making $60 million off of Forbes. He didn’t put anything out to back this up. The value of how much search engines supposedly make off listing news content is widely debated.

    I’ll add this. Let’s say we’re talking only $10 million. What makes more sense to Bing? To spend $10 million in advertising at the WSJ to directly speak to people there about why they should use Bing? Or to cut a $10 million deal that probably won’t hurt Google’s relevancy in any way and which maybe will bring a likely tiny percentage of people to Bing?