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Why Microsoft's Threats Against Google Are Empty

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Rupert Murdoch may despise Google News, but he also knows he needs it.

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Can Microsoft's (MSFT) Bing search engine buy its way to the top? According to the Financial Times, it may be trying to do just that by paying News Corporation (NWS) and other news content providers to remove themselves from Google (GOOG) and stick with Bing.

But don't believe the hype. News Corp Chairman Rupert Murdoch is among the biggest Google critics out there, but there's almost zero chance that his media properties will ever exit Google.

Murdoch has long held the notion that Google News is somehow stealing his content. We know this isn't true because Google News doesn't host content -- it simply sends traffic to news sites. About 100,000 visitors click on a Google News headline every minute.

If Murdoch really thought his argument held water, his sites would have been pulled from Google a long time ago. After all, he should be well aware that getting out of Google takes nothing more than a couple lines of code.

And where are News Corp sites getting its traffic? Let's see:

According to Alexa.com, the New York Post's site gets 18% of its visitors from Google. WSJ.com? A whopping 26%. And The Daily Telegraph? 23% of its site visitors come from Google.

Alexa's data aren't perfect, but you get the point -- Google sends a lot of people to News Corp properties. Rupert's not about to cripple his sites' traffic by cutting off Google-driven visitors.

The newspaper industry needs revenue and opting out of Google is obviously not the answer. If News Corp pulls its sites from Google, Web market share will simply shift to the New York Times (NYT) or whoever else is still in there.

Murdoch has publicly stated on many occasions that he wants to expand News Corp's paid online offerings, and it's going to need fresh eyeballs to serve as potential customers. Natural search traffic is the best place to grab those eyeballs. Murdoch shouldn't view Google as an enemy, but as a potential source of new, paying subscribers to News Corp sites.

I won't deny that Murdoch does have some real enemies on the Web. There are a small minority of corrupt bloggers that steal entire stories from legitimate sites and republish them to earn ad revenue. This is where News Corp and other newspaper companies should be directing their anger. They should be banding together with Google, Yahoo (YHOO), and Microsoft to ban copyright violators from search engines and Web advertising programs.

The other side of this story is what it says about Microsoft. Does it really make sense for such an image-challenged company to mess with Google News -- a service that millions of people love? I certainly don't think so.

Apple (AAPL) has slowly been growing into its role as the premier tech bully. Now's not the time for Microsoft to regain the crown. (See also How Apple, Not Microsoft, Is Tech's Biggest Bully.)
No positions in stocks mentioned.
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