While this post outlines how much an arms race around exclusive news content licensing would cost Google, I strongly believe that these types of deals will ultimately lead to the final demise of large branded news organizations, like News Corp. I have made previous posts that cover in detail WHY exclusive deals ultimately will hurt News Corp and Microsoft, so for this brief post, let’s just look at a few numbers.
Let’s suppose Bing and Murdoch do an exclusive deal:
1) As a result of this can of worms, Google might end up with a NEW annual expense of $1B per year to license exclusive content rights from other news providers (so that their search results are inclusive enough).
2) As a result of not having access to ALL indexable data, Google, takes a market share hit on search usage in general, costing them $500 million/year in lost revenue.
3) To provide incentives to smaller news sites, Google increases their adsense payout to top news sites and top YouTube producers…let’s just say another $500 million/year
Note: consider this an estimate that shows a single potential scenario. These numbers are referenced here, where I talk about why we might not want Google to have any incentive to take on news anymore than they naturally do by indexing their results.