Bing/News Corp: Not a Game Changer

 

 Posted by Shar VanBoskirk and Sarah Rotman Epps]

Microsoft and News Corp are rumored to be in talks about an exclusive relationship, where Microsoft would pay News Corp to remove its content from Google and allow it to be indexed only through Microsoft's Bing.

I don't know anymore than you do about the veracity of this rumor.  But my colleague Sarah Rotman Epps and I put our heads together on the potential deal. Here is our take:

News Corp’s short-term desperation will sabotage its long-term interests.  Everyone is watching newspaper companies lose more ad revenues as subscriptions fall even lower in 2009 than the declining trajectory they have been on since 2000.  Getting consumers to pay for content is a hard sell; media companies may have an easier time generating revenue by licensing their content to other companies, like portals, device makers, and non-media companies like Fidelity who need content for their Web sites. Murdoch wants a deal like this to get MS to pay him for the opportunity to index his companies' content. But the tradeoff for short-term revenue could be long-term irrelevance: If consumers don’t find Newscorp results in Google searches, they’ll just click on another content source. “If a tree falls in the woods…” could be rephrased as “If a site isn’t indexed by Google, does it really exist?” For the 65% of searches relying on Google, the answer is no.

Microsoft wins publisher goodwill, but probably not much search traffic. Bing has enjoyed growth in its share of searches since its launch in summer 2009, but it still accounts for only about 10% of searches compared to Google's 65%.  So Microsoft needs to do everything it can to try to gain search traffic. I see this as another way to try to drive searchers to use Bing instead of other possible search engines. But stealing one content source from Google won’t be enough to change consumers’ search habits.

Consumers don't care about a deal like this.  Consumers do not expect search engines to be exclusive.  In their minds, search engines are gateways to answers, and if they can’t find something through search, it may as well not exist.  So, while News Corp and MS might enjoy scratching each others backs in a deal like this, consumers won't know and won't care that Bing is the only place they can find Wall Street Journal articles and other News Corp content.

Most content doesn't have enough value for exclusivity to matter.  A number of reporters have asked me if this is the beginning of something big in terms of media/search engine deal.  My take is no way.  Because frankly content is plentiful and cheap and consumers are very good at finding what they need without having to pay for it or be inconvenienced to get it.  So while News Corp may have some content that still qualifies as "exclusive," I don't see many other media firms having any leverage to create similar deals with search engines.

See Forrester's blog for Consumer Product Strategy Professionals for additional take on this deal and others affecting the media industries.

 Posted by Shar VanBoskirk and Sarah Rotman Epps]

Microsoft and News Corp are rumored to be in talks about an exclusive relationship, where Microsoft would pay News Corp to remove its content from Google and allow it to be indexed only through Microsoft's Bing.

I don't know anymore than you do about the veracity of this rumor.  But my colleague Sarah Rotman Epps and I put our heads together on the potential deal. Here is our take:

News Corp’s short-term desperation will sabotage its long-term interests.  Everyone is watching newspaper companies lose more ad revenues as subscriptions fall even lower in 2009 than the declining trajectory they have been on since 2000.  Getting consumers to pay for content is a hard sell; media companies may have an easier time generating revenue by licensing their content to other companies, like portals, device makers, and non-media companies like Fidelity who need content for their Web sites. Murdoch wants a deal like this to get MS to pay him for the opportunity to index his companies' content. But the tradeoff for short-term revenue could be long-term irrelevance: If consumers don’t find Newscorp results in Google searches, they’ll just click on another content source. “If a tree falls in the woods…” could be rephrased as “If a site isn’t indexed by Google, does it really exist?” For the 65% of searches relying on Google, the answer is no.

Microsoft wins publisher goodwill, but probably not much search traffic. Bing has enjoyed growth in its share of searches since its launch in summer 2009, but it still accounts for only about 10% of searches compared to Google's 65%.  So Microsoft needs to do everything it can to try to gain search traffic. I see this as another way to try to drive searchers to use Bing instead of other possible search engines. But stealing one content source from Google won’t be enough to change consumers’ search habits.

Consumers don't care about a deal like this.  Consumers do not expect search engines to be exclusive.  In their minds, search engines are gateways to answers, and if they can’t find something through search, it may as well not exist.  So, while News Corp and MS might enjoy scratching each others backs in a deal like this, consumers won't know and won't care that Bing is the only place they can find Wall Street Journal articles and other News Corp content.

Most content doesn't have enough value for exclusivity to matter.  A number of reporters have asked me if this is the beginning of something big in terms of media/search engine deal.  My take is no way.  Because frankly content is plentiful and cheap and consumers are very good at finding what they need without having to pay for it or be inconvenienced to get it.  So while News Corp may have some content that still qualifies as "exclusive," I don't see many other media firms having any leverage to create similar deals with search engines.

See Forrester's blog for Consumer Product Strategy Professionals for additional take on this deal and others affecting the media industries.

Less Is More For MSN.com

[Posted by Shar VanBoskirk]

Last night Microsoft launched a new look and feel for msn.com to a limited number of consumers.  The new design will roll out to the mainstream in January.

Forrester got a sneak peak of the new-and-improved interface in October.

 

Here is my take on the redesign.  It:

Limits clutter.  Perhaps the best thing about the new msn.com is that it is simply cleaner.  MS says it has 50% fewer links than the old msn.com.  As part of the clean up, MS removed the left hand navigation and turned the top nav links into five customizable tabs.

Integrates personal social experiences.  The idea of the new msn.com is to make it a "personal portal" where people can come to "infosnack" on their preferred news, communications and community fix.  I like the facebook and hotmail integration shown here, but I think all portals are facing a strategy challenge as consumer media behavior changes.  That is, consumers no longer *want* to come to a single source for news, communications and community.  We, in fact, want these syndicated to us across the multiple sites and devices we use.  So while I think integration of new types of content is imperative for MSN.com, I don't think it completes users' overall quest to have their online needs met.

Will increase content distribution relationships.  To the above point,   This means, MSN should increase the network of content providers, sites and devices it shares content with.  We hope MSN's rev after this one shares MSN proprietary content more universally across devices and sites (yes, esp iPhones and iTunes) and allows consumers to add in feeds for digital formats of books, video, music, or games into their customized msn.com.

Last night Microsoft launched a new look and feel for msn.com to a limited number of consumers.  The new design will roll out to the mainstream in January.

Forrester got a sneak peak of the new-and-improved interface in October.

 

Here is my take on the redesign.  It:

Limits clutter.  Perhaps the best thing about the new msn.com is that it is simply cleaner.  MS says it has 50% fewer links than the old msn.com.  As part of the clean up, MS removed the left hand navigation and turned the top nav links into five customizable tabs.

Integrates personal social experiences.  The idea of the new msn.com is to make it a "personal portal" where people can come to "infosnack" on their preferred news, communications and community fix.  I like the facebook and hotmail integration shown here, but I think all portals are facing a strategy challenge as consumer media behavior changes.  That is, consumers no longer *want* to come to a single source for news, communications and community.  We, in fact, want these syndicated to us across the multiple sites and devices we use.  So while I think integration of new types of content is imperative for MSN.com, I don't think it completes users' overall quest to have their online needs met.

Will increase content distribution relationships.  To the above point,   This means, MSN should increase the network of content providers, sites and devices it shares content with.  We hope MSN's rev after this one shares MSN proprietary content more universally across devices and sites (yes, esp iPhones and iTunes) and allows consumers to add in feeds for digital formats of books, video, music, or games into their customized msn.com.

My First Take: Can Microsoft + Yahoo Challenge Google in Search?

There's no shortage of comment around the blogosphere today about a possible combination of MSN and Yahoo, and its potential to threaten Google's dominance. But while it's useful to keep in mind what impact this will have on music, messaging, or other verticals, I'm going to stick with talking about search -- because that's the only advertising-related market in which a combined MSN/Yahoo would directly compete with Google (while AdSense is improving, that's just repurposed search -- and Google is almost a complete non-entity in graphical advertising), and more importantly because that's where the real money is.

So could a combined MSN/Yahoo search engine compete with Google in Europe? Well, no and yes.

First the no: we're finishing up a report right now on how European search engines can compete with Google, but the reality is that no one's going to get near Google's search share over the next few years. While Google looks pretty dominant in the US -- they claimed 58 percent of all US searches in December 2007, said Comscore -- it appers that a combined MSN/Yahoo search engine would claim around 33 percent of all US searches. That's real, viable competition. But unfortunately, even if MSN and Yahoo combine, there will be no such strong challenge in Europe. As I've previously discussed, Google has between 80 and 90 percent of search share in the key European markets. So whether this deal happens or not, it'll be incredibly difficult for anyone to compete with Google for European search share.

On the other hand, perhaps yes: a combination of MSN and Yahoo would definitely be better-positioned to compete with Google for paid search revenues than each company is now. I've heard a surprising number of Euroean search marketers say that because MSN and Yahoo each command only a few percentage points of search share in Europe, they don't even bother advertising on any engine but Google. This proposed combination wouldn't entirely solve that problem, of course -- the combined search entity would still have less than 10 percent search share in the big European markets, according to numbers I've seen from various traffic firms -- but it would at least give marketers a reason to run trials beyond Google. And that's a start in the right direction.

I'll probably have more to say on this as more details emerge and as it becomes clearer whether or not this deal will really happen -- but in the meantime if you're a client or press and want to discuss this further, drop a line to presseurope@jupiterresearch.com and we can have a chat.