News Corp. & Microsoft: Pros/Cons

So, will News Corp. take money from Microsoft, confining links to its content — such as FOX News and the Wall Street Journal — to Bing rather than across all search engines (that is, not on Google)?

From the BusinessWeek perspective, it might be a “flawed deal”.

As the eMarketer quote from that BW article puts it:

To the extent that [News Corp.] finds reduced traffic, it would be reducing their revenue and they would become more dependent on Microsoft. Being dependent on a large giant company for a large share of your revenue is very shortsighted.

But as an article in Advertising Age notes, “Murdoch can afford to leave Google for Bing.”

Or as Mr. Murdoch said recently:

What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?

As traditional media companies scramble to make up for lost advertising dollars, it’s tempting to make deals that give them payback for their online content. Their fear focuses on how online news is increasingly a mere commodity. However, the thinking goes, if the media companies can make their news content exclusive, that would make it more valuable.

One wonders, though, how much Microsoft cares about getting a news exclusive, even it includes the Wall Street Journal. Perhaps, just by undercutting Google even a little bit, Microsoft might see a News Corp. deal as a winning move.

Is that too cynical? Are Rupert Murdoch and Steve Ballmer simply playing some kind of chess game?

This potential deal reminds me of the old joke about how fast do you need to be to outrun a bear in the woods? The answer is: Just a bit faster than your companions.

In this case, is Google the bear?

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UPDATE

As Andrew Leonard describes the intent of the News Corp.-Microsoft alliance in his excellent How The World Works column on Salon.com:

Fundamentally, what Microsoft and all the other newspapers looking to retreat from the free Web are banking on is that they can profit by reducing our access to information. Good luck with that.

Swimming against the tide of the Internet has not often proved profitable.