News Ltd, the publishers of The Daily Telegraph and The Australian newspapers, is negotiating with Microsoft to deliver content to its Bing search engine in an effort to deny Google access to global content.The move comes as Microsoft faces legal action in the USA from a small design company that has accused the global software company of unfairly using the name Bing for its search engine.
Bing! Information Design launched a legal action alleging that the multibillion-dollar software corporation “had knowledge of the mark” and “intentionally interfered” when it relaunched its search engine using the Bing name earlier this year.
The court case is set to be heard in the New Year.
Analysts claim that News Ltd could face a severe downturn in traffic if it moves to stop Google searching News Ltd content, as Bing has very little penetration in the market. In Australia, Google has over 80 per cent of the search market and in the UK it has over 89 per cent.
The scenario under consideration would see Microsoft pay News Ltd for making articles in Murdoch-owned publications searchable exclusively through Microsoft’s Bing search engine.
The problem for News Ltd is that search is not Microsoft’s core business, despite it generating a lot of revenue. As a result, Microsoft has moved to a spoiling practice in an effort to diminish the revenue stream for everyone involved. Analysts say that if Microsoft could reduce the overall market value of web searches, it could protect its own software revenue while hurting Google.
On the other hand, News Ltd, which has made very little investment in technology, is now feeling the full effort of consumers who want to get their information via Google as opposed to buying a News Ltd publication.
Google’s threat to Microsoft and other software and telecom companies is manifold. Google is competing not only in search engine software, but also in mobile phone services, personal navigation, and operating systems.
In concept, it wouldn’t be especially difficult for Microsoft to change the economics of the Web search market, as long as the company can tolerate losses. Microsoft could take advertising revenue generated by Bing and pass it along to media providers, in return for exclusive arrangements to make News Ltd content available on Bing. Microsoft would modify the money flow.