Can News Corp. afford calling Google's bluff?

It was inevitable that someone would seriously consider taking Google's dare.

For years, Google has all but dared traditional media companies trying to develop online businesses to live without the traffic it sends their way. The folks at the Googleplex make it clear that content owners who believe Google is unfairly indexing (or stealing, depending on your point of view) their content can easily remove that content from Google's massive corner of the Internet.

There's a tradeoff for that independence, of course: Don't expect the advertisers that have signed deals based on site traffic to pay the same amount next year.

News Corp. might be getting ready to do what many think is unthinkable. Reports have surfaced over the last several months, most recently in the Financial Times, that News Corp. is in talks with Microsoft to enact a plan that would see News Corp. properties hiding their content from Google's search engine in return for exclusive listing with Bing.

Rupert Murdoch, News Corp.'s famously cantankerous leader, isn't stupid: Microsoft would also have to pay News Corp. for the privilege of exclusive access to that content. But as Microsoft continues to lose billions of dollars a year on its online business, can it afford to be successful with this strategy?

Even if Microsoft is willing to cough up a huge sum (which Kara Swisher at Boomtown thinks is unlikely) for News Corp. content, this plan would only have a chance of turning the tables on Google if News Corp. and Microsoft can convince other large media companies to follow their lead.

First off, the practice of actually removing News Corp. content from Google would be relatively simple. News stories from The Wall Street Journal, commentary from The New York Post, and videos from News Corp.'s myriad cable and satellite television organizations can be tagged with a "noindex" tag, and Google won't index those pages as they are published. This also applies to pages that have been previously indexed, since they will be crawled again, this time with the new tag attached.

However, News Corp. would then need a backup plan to compensate for the revenue it would lose from the precipitous drop in traffic. With 65 percent of the search market, Google is the largest Web site in the world as measured by traffic. And its stated goal is to be the best information kiosk ever created by fielding queries and sending searchers on their way as fast as possible.

Murdoch has proposed removing his Web sites from Google only after constructing pay walls like the one used at the Wall Street Journal to limit free access to content, which is a somewhat controversial notion in this media era.

What News Corp. and Microsoft are reportedly discussing, however, is slightly different. Under the scenario outlined by the Financial Times, it does not appear that News Corp. would erect pay walls for all its content upon removal from Google. Instead, it would continue to make that ad-supported content available for free exclusively through Bing, helping offset the decline in traffic with a cash payment.

The two companies would then presumably market the hell out of the arrangement, because it would require a sizable shift in consumer expectations for Internet search. Right now, people are used to the idea that DirecTV is the only television provider that can offer a full package of NFL games every week, or that Comcast's Versus channel isn't available on DirecTV because of a licensing spat.

But that's not what they expect when they search online for news or information about a certain topic, and it would take some effort to educate them that The Wall Street Journal or Fox News' content can only be found if you're searching on Bing. Microsoft has already invested $100 million into Bing advertising, and would need to increase that amount to drive home the point that Bing is the only place you can find Fox News stories.

So will enough people be interested in that content as to change their search behavior and dramatically increase Microsoft's search market share? It's hard to see News Corp. moving the needle by itself, but modest results could embolden Microsoft to cut similar deals with other news companies and start the ball rolling toward the idea of Bing 2.0 as "the world's news search engine." That would be an interesting product.

As with just about everything, however, such a deal will likely come down to the amount Microsoft is willing to invest in such a project. Microsoft's Online Services Division, which runs Bing, is currently hemorrhaging money to the tune of $480 million in losses during its first quarter alone. Setting up content deals with the media industry would increase short-term costs with an iffy notion of when that investment would pay off in terms of increased search market share. And while Microsoft continues to milk Windows and Office profits, it can't throw money down a rabbit hole forever.

That means there's a sizable chance that this whole operation is geared around News Corp. negotiating a search and technology services deal with Microsoft to replace its current one with Google, which expires next June. Installing Bing as the search provider on News Corp. sites would generate increased searches for Microsoft while denying a common enemy Google some revenue, without kick-starting a huge battle that would have wide-ranging effects.

Murdoch has been able to tap into a well of frustration among those in the traditional media business over the way they are unable to duplicate the profits they enjoyed in the offline world on the Internet. But does he really want to call Google's bluff?

If so, he's banking on the notion that while basic news is a commodity, opinion and analysis is not. And whatever you might think of the various News Corp. properties, it's hard to argue they haven't earned a reputation for themselves as a unique source of opinion and analysis.