Newspapers Face the Prisoner's Dilemma With Google

Hugh Pickens writes "Nicholas Carr has an interesting analysis of Rupert Murdoch's threat to de-list News Corp's stories from Google and Microsoft's eager offer to make Bing Murdoch's exclusive search engine for its content. Carr writes that newspapers are caught in a classic Prisoner's Dilemma with Google because Google's search engine 'prevents them from making decent money online — by massively fragmenting traffic, by undermining brand power, and by turning news stories into fungible commodities.' If any single newspaper opts out of Google, their competitors will pick up the traffic they lose. There is only one way that newspapers can break out of the prison — if a critical mass of newspapers opt out of Google's search engine simultaneously, they would suddenly gain substantial market power. Murdoch may have been signaling to other newspapers that 'we'll opt out if you'll opt out,' positioning himself as the would-be ringleader of a massive jailbreak, without actually risking a jailbreak himself. There are signs that Murdoch's signal is working, with reports that the publishers of the Denver Post and the Dallas Morning News are now also considering blocking Google. In the meantime, Steve Ballmer is more than happy to play along with Murdoch because although a deal with News Corps would reduce the basic profitability of Microsoft's search business, it would inflict far more damage on Google than on Microsoft."

Comments

What?

[haderytn]

What is a newspaper?

Re:What?

[Darkness404]

Yeah, and if you look at the demographics who like newspapers they are almost overwhelmingly older. Talk to a 20 something and ask them if they read the newspaper, most will just laugh at you. In about 80 years, just about anyone who likes reading a newspaper now will be dead. Mix that with the fact that even older people who like newspapers are finding out about the internet and getting more news from there means an accelerated death for print. Yeah, print advertising will probably stick around but the newspapers simply aren't the place to get information for national or world news anymore. Local newspapers in small towns will stick around for longer than national newspapers but there just needs to be a few good blogs about the area and soon the newspaper has free competition.

Re:What?

[jcr]

Craigslist is killing them.

To be precise, their costs are killing them, because they can't compete with superior alternatives like Craigslist and other online advertising services.

-jcr

Re:What?

[c_forq]

I don't think this is true. I am a twenty something, and I remember that 10 years ago most people I went to school with didn't have the internet. 14 years ago a vast majority of my class only used the internet from school, and school and the library were their only option. If you look at my school today I don't think there is a single household without internet, and a vast majority have high speed connections. Where I work I know of 3 people in the warehouse who didn't have an internet connection until this year and only got one for their kids but now are using it all the time themselves. The penetration rate is WAY higher than it was 10 years ago.

Re:What?

[BrokenHalo]

Will Microsoft be willing to pay everybody to jump to Bing?

Microsoft can do whatever deals they want with Murdoch and his friends, but the simple fact at the moment is that Bing is rather a poor example of a search engine, and people will vote with their mice.

Every so often I try using Bing (in an attempt to be fair), but the relevance of its results is at best equivalent in to what I remember as typical of AltaVista back in in 1997. That's just not good enough. If the guys at Microsoft want Bing to be a serious competitor to Google, they're going to have to try putting some serious work into their product.

Re:What?

[twotailakitsune]

Most "paperboys" are not kids. It is a little hard for a kid to walk 10+ miles with over 700 papers. Delivering them in under 6 hours too. Hack, I deliver about 300 in a little area (about 1 km). about 2/3 of the people are ages 20-40. Most of the 1/3 are 60+. In the last year, the price for the paper has gone up 50%, people have to ask for the TV guide thing. But most of the lost in people are older people (the 60+). While I don't read a lot, I have seen stories in the paper that did not show up on TV, or the internet till days later, and this is from a 2 time a week paper. We still need news papers for local news. We do not have the blogs needed to deal with all local news yet, or Bloggers willing to dive into a story, interview, hold peoples feet to the fire.

Re:What?

[Anonymous Coward]

I think you missed the point. The parent was not arguing with the actual thesis that more people are getting their news online. The argument was that 10 years ago twenty-somethings still weren't reading newspapers, regardless of whether or not they had internet access. Speaking as someone who was twenty-something ten years ago or so, I tend to agree. I didn't read newspapers as a general rule, and even though I did have internet access, I didn't use it to get news either.

Re:What?

[ckaminski]

Craigslist has already done in organizations like the Wantadvertiser which used to be HUGE in my area (New England). And Google could probably sue the whole lot of them for collusion if they do try to do this.

Google already gives publishers a way out of caching pages. It's in their own best interests to take advantage of the capabilities the googlebot gives them.

Re:What?

[ckaminski]

Bing is okay if you're doing the top-10 actions on the web. Shopping, buying plan tickets, booking hotels, and searching wikipedia. It's when you get into the esoteric searches that it's weaknesses show. I'd probably compare it more to yahoo in 2001 than altavista, but it's no substitute for Google.

Re:What?

[Triv]

I read the New York times every day. I'm 28. I know I'm in the minority, but I get things from a paper I don't get from a website or an rss feed. It's portable, it's easier on the eyes, it's got a crossword puzzle in it I can do with a pen and all that tactile stuff, but also it's better for my brain - the 'net is good at giving me information I'm looking for, but it blows at giving me information I didn't know I needed until I read the headline. I learn more from 15 minutes reading the paper on my commute every morning than I would get from an hour in front of the computer. YMMV.

I Don't See the Comparison, More Like MLB Strike

[eldavojohn]

When it comes to Google and other aggregators, newspapers face a sort of prisoners' dilemma. 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.

So ... the original prisoner's dilemma (if I recally my AI coursework) was basically comes down to two or more prisoner's arrested as suspects in a crime. They are immediately separated into different interrogation rooms. The police officers use every trick they can to get any of the prisoners to lay claim to committing the crime and receive a plea bargain if they testify against the other suspects. If no one caves, then everyone walks. Now, the important thing to note here is that if one suspect caves and the other n-1 suspects don't, then that suspect receives a sub-optimal reward of a lighter sentence while those that did not own up to the crime receive very harsh penalties. And so you have a dilemma ... did one of your crew rat you out already? Should you take the guaranteed three months in prison versus a potential ten years?

The important thing is that one rogue actor could ruin it for everyone.

So the analogy seems to imply that newspapers have taken a suboptimal goal (being in jail) ... but the most important problem is that no one knows if the current situation is a suboptimal goal or optimal goal. And no one's going to find out until they leave Google. If a single newspaper leaves Google, they ruin it for themselves (unlike the prisoner's dilemma) and no one else. In fact, the others might even benefit from that.

What this is a closer analogy to is the MLB strike you may (or may not care about) remember. Basically the baseball players didn't think they were making enough bank so they went on strike. If anyone of them said, "Screw it, I'm leaving the league, I'm going to literally take my bat and ball and go elsewhere," then they would have been broke. But the whole league went on strike, they could have formed a new league, they could have went to a different league, they could have entered talks with the European league to open leagues in the US, etc.

The newspapers should continue to court Microsoft and play the two search leaders off against each other. Also, I'm no robots.txt expert but I think there is a disallow from certain domains syntax they can use to block Google, Microsoft or white list one of the two. Another strategy might be to go on strike and have all newspapers request to be removed from Google for one week. Let the system break down and then enter negotiations with the giant.

One thing is pretty clear, they must unionize/unify and act as a single entity in either leaving or negotiating. And I don't really see that happening. They might be able to negotiate between Microsoft and Google on a case by case basis but Google is still too much larger than Bing to do that.

No Dilemma

[headkase]

There is no dilemma, there is only change. The Internet is a tsunami that is roaring over all aspects of our society. In the content industries it is clearing land for some while washing away the livelihoods of others. It is a force of its own. You can manage somewhat as you go but one thing is certain: it is now impossible to stop it, we have passed the tipping point. You might as well curse the wind, or you could adjust your sails to the best of your abilities.

NPR, BBC anyone?

[onionman]

Maybe, just maybe, consumers who value actual news over sensationalized claptrap are finding that the opinion pieces and "human interest" stories which dominate Murdoch's offerings are fungible commodities.

Good bye Wall Street Journal. You were a reputable publication at one time.

Re:NPR, BBC anyone?

[Xest]

This is why the viewpoint in the summary is flawed. I do not believe for example that the BBC would be allowed to delist from Google due to laws governing it because it's publicly funded and can't show competition bias.

I doubt the BBC is unique in this situation either, and the reality is for every thousand companies that delist from Google and follow Murdoch, there'll still be a BBC picking up the search results.

Users wont stop using Google, they'll just pick whatever the first result is on a search whether that's Fox, or the BBC and again, there'll always be the BBCs of the world there.

The Newspapers Have it All Wrong

[garcia]

When the newspaper corporations continue to spout how the visitors brought in by the search engines are worthless because those people are drive-by visitors, I have to wonder about their content. If someone is brought in by a search engine they should be considered an opportunity. If you are not taking the time to ensure your design and content are meant to draw those opportunities into a goal, well, I think you're looking at this from the wrong way.

This is yet another reason why the newspaper industry just doesn't get it. Google gets it and so do the consumers. Microsoft doesn't get anything more than the bone they are being thrown.

I wish people would stop reporting on this story as, honestly, it's just a lame attempt at getting attention.

never happen

[Weezul]

Will the BBC join? No! So international news is hopeless. Do people care about local news?

What if google endowed a nonprofit news organization? Or just bought wikinews the rights to use AP feeds?

They are a commodity

[onyxruby]

Newspapers and the news have become a commodity, they just don't realize it yet. When I can read 8 different newspapers with the exact same AP story, the differential between the newspapers becomes the experience. Newspapers are victims of their own business tactics. By removing local reporting resources, and getting most stories from the Reuters or AP, there is very little to differentiate one news source from another. Newspapers have two choices:

1. Create more original content (ie create content by hiring reporters)
2. Create a better experience for the reader (is your website pleasant to use)

Neither one of these has anything to do with Google, however surviving Google (or it's replacement) requires doing one and or the other. The fact that Google is the delivery mechanism for much of their traffic is moot. Changing the delivery mechanism won't change the fundamentals behind the issue. What newspapers need to do is learn how to keep the traffic they get once visitors find their site.

It Still Won't Work

[segedunum]

Even if what seems like a critical mass ouf publishers start delisting from Google, Google's search engine and advertising power and weight is such that other publishers and smaller news sites would simply move in and fill the void. Google might also be more than happy to get less hassle. It certainly won't work if publishers who want to delist start wanting to charge for news, and Microsoft will simply be pouring money down a drain if they pick up that slack and pay the publishers themselves.

It's a horse that won't run and the only reason why Murdoch is banging on about it is because News Corp is making some sizeable losses with no end in sight.

DUPE - but not Slashdot's

[grcumb]

Carr has railed about this problem before, and he's still just as wrong as he ever was.

Here's his analysis of Murdoch's first pronouncements on the topic back in April. And here's why he's just as wrong now as he was then.

(I later turned that post into a newspaper column in the country where I live. It's longer and slightly more polished, but more focused on our particular issues, which aren't necessarily germane to the larger debate.)

Re:Relevancy

[WinterSolstice]

I think I recall seeing something about that.

I don't know about most people, but I stopped reading the major newspapers (even online) late last year when they became nothing but AP parrots with weird spin jobs.

I mean, I know they were always AP parrots before, but it got *really* bad with the economy. The obsession with very specific stories is completely out of hand.

I'll stick with just the direct AP feeds, thank you.

Re:Inflict Damage?

[digitalgiblet]

I think the "inflict damage" comment meant if a MAJORITY of news sources pulled out of Google, not just News Corp.

I didn't wriite it, I'm just trying to interpret...

The point of the article is that unless virtually ALL of the news sources leave at once, the result will really just be that those who are left will profit by the others voluntarily removing themselves from the competition.

Personally I think it is a gutsy but stupid move...

No problemo

[otter42]

Alright, so some American newspapers put up walled gardens. No problem, I'll just read the foreign press. BBC does a good job, and so do many others.

Google already licenses the AP feeds

[brunes69]

Google already licenses the AP feeds. Click any AP story and you go to the Google-hosted AP text.

This is why this scheme is NEVER going to work. Google already licenses AP, which creates 75% of the content in all these papers anyway. Also there are many major international players, like the NPR and BBC and CBC, that will never opt out of Google, as they are not-for-profits in the first place.

The end result is everyone will get their local news from NPR/CBC/BBC, and all these newspapers will just go under FASTER.

No one will pay for news online. Give it up.

Re:Google already licenses the AP feeds

[Anonymous Coward]

Wire stories are the key to understanding what's going on:

The Internet, mostly, is allowing us to make more efficient versions of existing systems. In the past, you bought the Local Paper Gazette because that's what was available. The LPG bought wire stories to cover national and international news...and there was no other real way for you to get those stories. Newspapers wanted to feel like they were doing a service, so sometimes they'd adjust the wire stories a little with a few quotes from local politicians or from a local mother whose adult child was affected by the distant story.

Now, we have direct access to national and international stories from the journalists who write them. Local papers are an inefficient middle-man on those stories. Obviously, they need to cut back on the budget for re-writing wire stories because nobody cares enough to pay for it...I'm sure they're trying, but they waited until the situation was desperate to start making cuts, and now they can't make cuts fast enough. The solution for local papers is pretty straight-forward:

  - cut all duplicate reporting. If someone else is covering something and you can't cover it more profitably, cut it immediately. If you have a desk in a distant city, cut it immediately.
  - sell high-quality high-interest local stories to distant local papers...whether this means becoming part of a network or wire agency or what, turn your local coverage into a broader profit. If you don't cut it in the previous bullet, you need to sell it to someone else in addition to your own publishing
  - keep your paper as large as possible -- slash your print ad profits until they are razor thin. Newspapers have value because they cover a broad array of topics. Dad reads this, mom reads this, bro reads this, and sis reads something different...once you start cutting the comics b/c there's no ad space, and the business reporting because it's all online, and sudoku because everyone has it on their phone, you erode the perceived value and subscriptions stop. On Sunday, you want ads from every story in a 100 mile radius. On Wednesday, you want ads from every grocery store store that has at least one store in your area.

Re:I Don't See the Comparison, More Like MLB Strik

[SmilingBoy]

You forgot about the most important aspect of the prisoner's dilemma: Whatever the others do, you are better off to confess. Typically, the dilemma is presented with two prisoners: - If both keep silent -> both get one year jail based on weak evidence - If both confess -> both get three years jail - If one confesses, and the other keeps silent -> the one that confesses walks out free, the other one gets ten years jail Now what do you do if you are the prisoner. There are two possibilities what the other one has done: - If the other one has kept silent, you will get one year jail if you also keep silent, and walk out free if you confess -> Better to confess in this case - If the other one has confessed, you will get ten years jail if you keep silent, and three years if you confess -> Better to confess in this case So irrespective of what the other one is doing, you are better off confessing. So the only rational choice is to confess. Since both prisoners face the same incentives, both will confess and both get three years jail. There is no way for them to reach the clearly superior outcome of only one year of jail for both of them.

Its not really newspapers verus google at all

[Liambp]

its really newspapers versus the internet and the newspapers are going to lose. If all of the newspapers together blocked google tomorrow I suspect that the majority of people using google wouldn't notice. The problem for newspapers is that they neither create nor own the news which is their major product. They are merely a distribution channel for that news. While they have served us well for many years as a good and professional distribution channel there are now so many other ways to get that same news that they are in danger of becoming irrelevant. Their only remaining market power is the fact that they offer a higher quality distribution channel than random internet posters but In the battle between quality versus convenience, convenience wins. If newspapers remove their offerings from the internet's largest search engine they make their services much harder to use and pretty much destroy whatever little market power they have remaining.

Targeted news and branding their writers

[Enderandrew]

Biased, targetted news sells well. Those are the facts. Whether you prefer Fox News or Huffington Post, people enjoy going to a news source that tells people what they want to hear.

Newspapers need to find their niche in targetting local news. Here in Omaha, the big news is stories on the Nebraska Cornhuskers.

Furthermore, I know that I am fairly agnostic about generic news, but I do search out certain authors I enjoy reading. I just left a newspaper, but I often encouraged them to do more to brand their writers. Put more photos of writers in the paper. Push those huge bylines. If someone really likes reading Tom Shatel (local sports columnist for the paper I just left) then they will specifically look for his content.

Furthermore, Google has already said they want to pay newspapers for the content they produce. Our stories already go into an AP feed that others aggregate for free. When big stories happen (our mall shooting last year for instance) we had people all over the world recycling the World-Herald's story. Some linked back, and others didn't. When the BBC recycled the story, they didn't pay the World-Herald for it. However, Google is saying they do want to pay for content.

So how is Google this evil entity that newspapers must rail against? If they were smart, they'd sign up with Google to start selling their content today, and start collecting checks. Newspapers who want to survive in the new market must transition somewhat to a content producer rather than focusing solely on selling a printed product.

Re:I Don't See the Comparison, More Like MLB Strik

[Anonymous Coward]

One thing is pretty clear, they must unionize/unify and act as a single entity in either leaving or negotiating. And I don't really see that happening. They might be able to negotiate between Microsoft and Google on a case by case basis but Google is still too much larger than Bing to do that.

When people unionize, it's protected by the law. When corporations unionize, it's called collusion, and is forbidden by law. When corporations compete, it's good for the consumer, and that's who the laws should be protecting.

It sounds to me not that the newspapers aren't playing a game of the prisoner's dilemma, they're playing a game of buggy-whip-making. If they don't re-invent themselves for the new marketplace, they will become a historical footnote.

Answer:

[geekoid]

A monthly bill from the WSJ.

Re:Last gasp of the newspaper

[mrsquid0]

Compared to blogs and much of the citizen reporting that is found online newspapers are still very good at weeding out the rubbish. The problem is that a lot of people only want the read things that confirm their own preconceptions, and are not interested in learning anything that challenges them. On of the big problems with online news sources is that people can customize the new that they receive to the point that they are essentially in an echo chamber.

Re:But theres a problem with you solution

[mrsquid0]

>The problem for newspapers is that the number of thinking
>people is shrinking, while the number of those who now simply
>own a keyboard is increasing.

I disagree. I suspect that the number of thinking people is actually increasing. The problem is that the idiots have a much louder voice today than they have ever had before, thanks (as you say) to the keyboard. Before about fifteen years ago it was very hard for most whack-job ideas to get a large audience. Now, it is very easy, and the people who believe them can shout very loudly, which leads to the impression that they are far more numerous than they really are.