Where’s the real power? Google versus Murdoch

The difference between Rupert Murdoch and Google, quipped media pundit Andrew Neil, is that one is a machine and the other is not. But which is which?

Neil, himself a former NewsCorp employee, was chairing a constellation of media and new media entrepreneurs at a recent The Stone Club debate. The subject: Where’s the influence – Google or Murdoch?

It was a timely debate, given Murdoch’s rare but illuminating television interview last week, on Sky News Australia. In it, the global media mogul did not mince his words. It’s going to be a fight to the death with what he calls the “content kleptomaniacs” and “plagiarists” who “steal our stories” and run with them. He meant Google, of course, but all the other news aggregators as well – among them the BBC, which he has explicitly threatened to sue. He believes he can deploy a “fair use” argument in the courts to gag them. Physically, he intends to cut off all free access to NewsCorp news content, print and broadcast, once his organisation has erected effective paywalls.

There’s no doubt most people take Murdoch at his word: as the militant but effective cheerleader of traditional media who is determined to stem decline. A YouGov survey, commissioned shortly before the debate, clearly demonstrated that media experts as well as the general public consider Murdoch more influential than Google, by a margin of roughly 7 to 2. But ask the same question of ten years in the future, and the answer is an exaggerated mirror inversion.*

Part of that reversing perception must be due to Murdoch’s age. He is 78, and if not (according to Neil) human, he is certainly mortal; with succession plans not entirely clear. James Murdoch – as primus inter pares within the family dynasty – has much to prove. But there is also a sense, if the panel discussion is anything to go by, that Murdoch is playing the role of King Canute. Newspapers will remain influential for some time to come, but they, and the business model behind them, are definitely on the way out.

“Influence” is of course a word replete with ambiguity. In Murdoch’s case, it is usually construed as interference, or deliberate influence – chiefly on the outcome of major elections. Google, with its lotus-eating Californian value-set and “Do no evil” mantra, gets off lightly by comparison. How, after all, can an algorithm influence the outcome of an election?

Well, wait and see, the panel seemed to suggest. Google has, as Richard Sambrook, director of the BBC’s global news division, pointed out, come from nowhere to be regarded as the fourth strongest news brand in the world, yet it originates not a word of news itself. In an age of fragmenting media, and shrinking brand loyalty, it is monolithic and well trusted. With 94% share of the European search market, it is the natural one-stop-shop for consumers in search of almost anything (news included).

So what’s so sinister about that? Peter Barron, director of communications and public affairs at Google, was quick to state the case for the defence. “We organise, we don’t ‘control’ the world,” he said. “We’re a technology company, not a media company. And to say we don’t contribute anything to content is not true. We do drive people to newspaper sites. This debate over free versus paid-for content is an artificial construct. The real influence of the future is neither Google nor the news services; it is the consumer.”

Ah yes, but who has the most influence in moulding consumer opinion in the first place? Precisely the issue seized upon by Julie Meyer, founder and chief executive of Ariadne Capital, and a “dragon” on the BBC’s Online Dragons’ Den. Her point was that Murdoch’s values may be ‘in your face’ but they are not surreptitious like Google’s. “You can turn off Fox, but you can’t turn off Google” because it has become an everyday part of our lives. Meyer’s primary concern is that Google is using its vast market scale (and funding) to control the process of innovation. Whatever it cannot do itself, it buys and absorbs. Which is anti-pluralistic and a threat to future intellectual property rights (and, potentially, the independence of news content).

It was a point developed at some length by Brent Hoberman, co-founder of Lastminute.com. Such is the attractive power of Google, he suggested, that even when Microsoft, its main rival, bought a shopping and auction service called Jellyfish and attempted to drum up traffic by bribing consumers to stay away from Google, the ploy failed abysmally. Consumer sovereignty exercising its rights? Maybe. But Hoberman cautioned against concentrating too much power into the hands of what he calls “the unaccountable algorithm” which can arbitrarily move your company – and your fortune – up and down the search scale. And, by extension, can influence the way you vote through the manipulation of news order at election times.

It’s not so much that Google has set out with any deliberate intention of bending the agenda. More that one thing leads to another, with unfortunate market-distorting consequences. Google Maps may be a fine and wonderful thing, but as Google moves into satnav and mobile phones, will it not present a threat to TomTom and its like? Likewise Google Publishing has huge implications for authors’ rights.

But we’ve seen it all before; it’s a classic content versus carrier story, like the Standard Oil case. John D Rockefeller made a fortune not so much by realising the nascent importance of petroleum, but by seizing the distribution rights to the extent of creating a near monopoly in the refinery business. Eventually, in 1911, the Federal Court stepped in and broke up Standard Oil. It is not impossible that a similar fate awaits Google.

*For full results: http://media.yougov.com/static/ SummaryofGooglevsMurdoch.pdf