As usual, the media got the message wrong. “The gloves are coming off!” screamed the headlines last week, after Les Hinton, the current CEO of Dow Jones and publisher of The Wall Street Journal, compared Google with a giant blood-sucking vampire.
Keynoting the annual PricewaterhouseCoopers Entertainment and Media Outlook event last week, Hinton, a more than 40-year veteran of Rupert Murdoch’s News Corp. (NYSE: NWS), appeared to declare war on Google (Nasdaq: GOOG), literally presenting the search-engine leviathan as Count Dracula, sucking the sweet blood of poor innocent virgins (i.e., pure newspapers). Speaking with sexual explicitness, Murdoch’s loyal lieutenant suggested that, by appropriating headlines for services like Google News, Google’s links economy is “scraping and raping” the newspaper industry.
"As an industry,” Hinton explained, “we provide them with massive amounts of news, none of which they spend a penny creating."
When somebody as senior and trusted within News Corp. and as street-smart as Les Hinton starts making such violent public threats against Google, it’s obvious that Rupert Murdoch is gearing up to do business with the boys from the Googleplex. But it’s not the business of war that Hinton and News Corp. declared last week, but rather the more subtle business of peace.
As with Dracula, the richly complex 1897 novel by Bram Stoker, Les Hinton’s message to Google was actually the reverse of what initially meets the eye. Rather than taking off his gloves, Hinton was actually putting them on and transforming Google from the villain to the victim of the story.
“There is a charitable view of the history of Google,” Hinton explained to the media barons assembled at the PricewaterhouseCoopers event last week. “[It] didn’t actually begin life in a cave as a digital vampire per se. The charitable view of Google is that the news business itself fed Google’s taste for this kind of blood.”
So Hinton charitably acknowledged that Google is actually the innocent in the Internet drama. The guilty party, Hinton confessed, are the newspapers that stupidly gave away their content for free on the Internet, thereby addicting Google to unpaid news.
The real purpose of Hinton’s PricewaterhouseCoopers theatrics last week was to announce a new business model for Dow Jones, a model in which all the scraping etc. is turned on its head. It’s the classic walled garden paid model, of course, the model in which the newspapers reassert their right to charge readers money for access to their content.
“Dow Jones is just at the end of developing a new platform from which to conduct business on the Web,” Hinton announced to the world. “Imagine this future: The Journal is one of the many newspapers you might buy in one place and with one payment… Watch for it.”
Yes, Les, we are watching for it. This is major news for the news business. Dow Jones -- one of the world’s preeminent financial and news informational resources -- is building a paid version of Google News, an aggregation network (what in the 90s we called a “portal”) where consumers of news can buy high-quality journalism.
So where does this leave Google? And how does it change the workings of the links economy?
This is the paradoxical crux of the matter. The new Dow Jones platform will actually make Les Hinton, Rupert Murdoch, and News Corp. more, rather than less, dependent on Google. After all, how are news consumers going to be able to discover or access breaking news stories without a reliable search engine? Bing or no Bing, the ubiquitous Internet search engine will remain Google for the foreseeable future.
So Google -- which has never been in the content business -- will become the all-important vehicle that will deliver the punters to the Dow Jones walled garden of news. And here, I suspect, is the hand, rather than the fist, that Hinton was offering Google. The more news links the better, as long as those links lead to the paid content on the News Corp. platform. Instead of a war between News Corp and Google, therefore, Hinton was declaring the opportunity not only for peace but also for closer and more innovative business relations between these two intrinsically synergistic companies.
With the new Dow Jones platform, the scraping is about to go seriously digital. Hinton, Murdoch, and News Corp. have finally taken off their gloves. The only people who should be worried by this vampire 2.0 are all those lucky consumers who, over the last 15 years, have been getting their news for free.
— Andrew Keen, Silicon Valley author, broadcaster, and entrepreneur, can be reached on Twitter at @ajkeen.