Big News Bucks Unlikely From Bing? Journalism Could Be The Loser

The reports say Microsoft is offering to pay newspaper publishers for indexing their stories, if Google (NSDQ: GOOG) is blocked from doing the same.

But how real are the talks? One source familiar with discussions advised us caution against “the idea that there would be vast sums of money in this”, suggesting some publishers are motivated in winning a Google-beating offer from Microsoft (NSDQ: MSFT). And at AllThingsD, multiple sources express similar skepticism, indicating big payments from Microsoft would be uneconomical. Even Rupert Murdoch has said the cost for such a plan is probably too high. [Ed. note: Robert was on Channel 4 tonight in the UK on this subject. Video here.]

If reports are right, and significant content payments do change hands, the outcome could be this: good for Bing, bad for audiences

As much traffic as news sites get from Google, most people use search engines to find static pages; news clickthroughs are often serendipitous.

It’s on this generic web search that Google is superdominant, taking 87.5 percent of UK searches against Yahoo’s 4.3 percent and Bing’s mere 3.6 percent (comScore: Sep ’09). Google pushes an awful lot of chance clicks to news stories (many of them actually to older articles that have had time to marinate in some SEO juice).

So yanking news from Google searches would pose this challenging question: do web users value news so highly that they would switch search providers? The answer, in sad truth, may turn out to be “no”.

Bing will undoubtedly see gains, even without a news deal (it’s an improvement on its predecessor, Windows Live Search) but using news to attract search users may be underestimating the fleeting esteem in which web searchers actually hold news.

So what’s happening? Several Microsoft execs do share some news publishers’ view that content should be re-used in formal partnership, rather than through some fair-use free-for-all. That doesn’t start and end with Bing. But it also may be no big deal — syndicated content changes hands for a price every day. Applying this principle to indexing, though, could severely dent Google’s mantra that it is crawling, rather than copying, newspapers’ stories.

Bottom line: if publishers can win some kind of support from Microsoft that they say they aren’t getting from Google, that could put them in a stronger position to force Google’s hand on payments after the paywalls go up.

One other footnote: if publishers opt to take a big payment from one search engine over another’s promise of income-from-eyeballs, it would be mark just how flat the once-booming online advertising market has become, and signify a retreat from the quest for uniques-without-returns.