Google and News Corp execs in turf war over web

26 September 2014 -

A Google senior executive has hit back at an open letter from Rupert Murdoch’s News Corporation, which accused the search giant of wilfully stifling competition

Jermaine Haughton

Two of the world’s biggest media companies are at loggerheads, following Google’s response to News Corporation criticism of its search rankings and other innovations. Last week, News Corp chief executive Robert Thomson wrote an open letter to EU competition commissioner Joaquín Almunia to pile pressure on Google, after the European Commission said it wasn’t satisfied with settlement terms that the web giant had proposed over an EU antitrust probe.

The debate is particularly interesting as it shows the tensions between two major executives representing two contrasting visions of the media’s online presence – on face value, a battle between old and new media amid blurred boundaries. Owned by Rupert Murdoch, News Corp consists of numerous TV and radio stations, newspapers and film studios – while Google is best known for its online search engine, browser, mobile operating system and YouTube acquisition.

Of course, each has nudged into the other’s territory. Murdoch purchased early social network Myspace when it was at the height of its popularity, but as a result of unimaginative post-buyout management and the rise of Facebook, the platform failed to survive. Meanwhile, Google’s wholly-owned subsidiary YouTube has moved closer to broadcasting, having streamed live events and released online TV channels featuring original content.

In a cutting retaliation to News Corp, Google senior vice president Rachel Whetstone posted a blog carefully dissecting and picking apart the key issues thet Thomson raised, allowing readers to “share our perspective so you can judge the arguments on their merits”. At the heart of the debate were four main issues: piracy, search rankings, Android and advertising. Here are the claims and counterclaims…

Piracy

News Corp’s claim: Google is a “platform for piracy and the spread of malicious networks”, and “a company that boasts about its ability to track traffic [but] chooses to ignore the unlawful and unsavoury content that surfaces after the simplest of searches.”

Google’s response: “Google has done more than almost any other company to help tackle online piracy. In 2013 we removed 222 million web pages from Google Search due to copyright infringement. The average take-down time is now just six hours. And we downgrade websites that regularly violate copyright in our search rankings. Video: We’ve invested tens of millions of dollars in innovative technology – called ContentID – to tackle piracy on YouTube.”

Search rankings

News Corp: Sudden changes are made to the ranking and display of Google search results, which inevitably maximise income for Google and yet punish small companies that have become dependent on Google for their livelihood.

Google: “Of course we regularly change our algorithms – we make over 500 changes a year. But these changes are all about improving the user experience, not punishing small companies. Indeed, it’s well documented that the highest-profile change to our search ranking, called Panda, actually reduced our advertising revenue. As Yelp, another complainant to the EC, said on a recent earnings call: ‘Where we have the largest communities in the US, we’ve seen actually an uptick as a result of the recent Google algorithmic change. They’re constantly making changes and alterations … and most of that really, on a day-to-day basis, doesn’t have a material effect’.”

Android

News Corp: “Google has developed a ‘certification’ process for Android-related products which allows it to delay or deny content companies and other businesses access to the mobile operating system, while giving itseIf the freedom to develop competing products.”

Google: “Android is an open-source operating system that can be used free-of-charge by anyone. You don’t need Google’s permission. If hardware manufacturers want to offer applications via Google Play, our digital apps store, we simply ask that they meet a minimum technical standard to ensure these apps run smoothly and securely across a range of Android-powered devices. This is good for users and for app developers. Many manufacturers, including Amazon and Nokia, choose to install their own apps stores on their Android-based devices.”

Advertising

News Corp: “Google is commodifying the audience of specialist publishers and limiting their ability to generate advertising revenue. Data aggregators attempt to sell audiences at a steep discount to the original source, for example, access to 75% of The Wall Street Journal demographic at 25% of the price, thus undermining the business model of the content creator.”

Google: “When selling their ad space, publishers can decide which partners they work with, who can buy ads on their website, and who can reach their audiences. Indeed, in a recent press release to investors, News Corp explained that it had created a private advertising exchange to limit the partners it works with to prevent exactly this kind of commoditisation. Robert Thomson, News Corp’s CEO, said at the time: ‘The only way to reach the world’s greatest content and the most prestigious and lucrative audiences is directly through our digital properties. Third parties are no longer invited to the party.’ Google works with publishers to protect their content and maximise their advertising revenues.”

In the finale of its response, Google dismissed Thomson’s assertion that the online giant’s founders Larry Page and Sergey Brin have been usurped by “cynical management.” Whetstone wrote: “Larry Page and Sergey Brin are still very much at the helm of Google – Larry is CEO, and both remain the inspiration behind our next generation of big bets... self-driving cars, Loon, Fiber and more”.

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Image of Google sign courtesy of Ken Wolter. Image of News Corp logo courtesy of Tupungato. Both from Shutterstock.