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 “Individual newspapers can’t live with Google, but they can’t live without it either …”

The statement comes toward the end of Nick Carr’s (right) Murdoch’s wink in his Rough Type bog.

Rupert Murdoch reckons net content is worth money, as he told Skye News.

Now, “When it comes to Google and other aggregators, newspapers face a sort of prisoners’ dilemma,” says Carr, going on, “If one of them escapes, their competitors will pick up the traffic they lose. But if all of them stay, none of them will ever get enough traffic to make sufficient money. So they all stay in the prison, occasionally yelling insults at their jailer through the bars on the door.”

But, he observes, “Of course, there has always been a way to break out of the prison: If a critical mass of newspapers were to opt out of Google’s search engine simultaneously, they would suddenly gain substantial market power. Newspapers are struggling, but they remain, by far, the world’s dominant producers of hard news. That gives them, as a group, a great deal of leverage over companies like Google who depend on a steady stream of good, fresh online content. Google needs newspapers at least as much as newspapers need Google – a fact that’s been largely hidden up to now.”

What Murdoch “effectively did in his interview with Sky News was to send a signal to other newspaper companies: We’ll opt out if you’ll opt out,” says the post, going on »»»

There are signs that the signal is working. Bloomberg reports today that the publishers of the Denver Post and the Dallas Morning News are now considering blocking Google in one way or another. More ominously (if you’re Google), Microsoft has apparently responded to the signal by offering to pay News Corp to make Bing the exclusive search engine for its content. Microsoft doesn’t have a lot of weapons to use against Google in the search business, but getting prominent news organizations to block Google would be a very powerful weapon. (Steve Ballmer would be more than happy to reduce the basic profitability of the search business, as that would inflict far more damage on Google than on Microsoft.)

Faced with a large-scale loss of professional news stories from its search engine, Google would likely have little choice but to begin paying sites to index their content. That would be a nightmare scenario for Google – and a dream come true for newspapers and other big content producers.

“The idea that newspapers might come together to pursue a radical and risky strategy seems far-fetched,” says Car, adding:

“Then again, maybe the time has finally come for newspapers to take a deep collective breath and apply the leverage they still hold. They don’t have a whole lot left to lose.”

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