This Has Epic Fail Written All Over It

It looks like Microsoft and Rupert Murdoch's Newscorp are working together to attempt to create a walled garden around his so-called news:

Microsoft has had discussions with News Corp over a plan that would involve the media company’s being paid to “de-index” its news websites from Google, setting the scene for a search engine battle that could offer a ray of light to the newspaper industry.

The impetus for the discussions came from News Corp, owner of newspapers ranging from the Wall Street Journal of the US to The Sun of the UK, said a person familiar with the situation, who warned that talks were at an early stage.

However, the Financial Times has learnt that Microsoft has also approached other big online publishers to persuade them to remove their sites from Google’s search engine.

There are a number of assumptions here, on both sides, which I think will kill the deal:

• That NewsCorp^®, and its shareholders will tolerate the implosion, at least in the short term, of online ad revenues, particularly given the current moribund revenues for print advertisement.
• That even if Microsoft^® is successful, its unlikely to bring in much in the way of other search business their way.
• That if Microsoft^® succeeds in dethroning Google^® that they won't be an aggressive monopolist and short change those content providers.
• That Craigslist^® won't continue to eat their lunches in the lucrative local classified markets.
• That the New York Times will team with the publisher of the Wall Street Journal and New York Post on this.
• That any of the foreign media will go in on this.
• That the EU antitrust authorities won't be on their ass like white on rice.

This is one of those things that will get a lot of ink, because, of course, the newspapers want it to work, but it won't get much beyond that.

The 800 pound gorilla in the room is, and continues to be, that the major news outlets are driven by the demands from Wall Street to hit their numbers, which, when juxtaposed with stupid debt deals on shiny new headquarters, they have consistently made their products less attractive.

The problem is that when you cut journalism out of newspapers, all you have left is advertisements, and like I said, Craigslist^® is better as a pure advertising play.

H/t Atrios.