Microsoft and Murdoch's News Corp Discussing Google Workaround

Rumors are swirling that Microsoft (NASDAQ: MSFT) is taking aim at the keystone of Google (NASDAQ: GOOG) by negotiating with Rupert Murdoch's News Corp. (NASDAQ: NWSA) about removing content from the rival's search engine, according to a report in the Wall Street Journal.

Talks are in the early stages of development, with the potential deal becoming a new source of revenue for News Corp., which similar to many other news sources, is looking for new ways to generate revenue amid continuing subscription drops.

The news source which owns well-read newspapers such as the Wall Street Journal and the Sun in the U.K., as well as MySpace and Fox television properties, would reportedly remove its content from Google search engines, giving an advantage to Microsoft's Bing search entity.

The deal would be a "catch-22" for both companies. News Corp., which would receive added revenue from a potential deal, would also lose a large amount of traffic to sites generated by Google searches. While Microsoft would receive a search advantage in its fight to gain market share from Google, the deal would end up costing the company a fortune, especially if they want exclusive rights.

News Corp. has, along with other news sources, criticized Google for using excerpts of their content to link to the news organizations' sites. Google is within its legal rights to post snippets of news stories to link to sites.

News sites have been trying for some time to combat declining reveue streams in the age of real-time news, but have so far been unsuccessful. Making content exclusive to a specific search engine could a be potentially profitable for a news source; however finding a suitor, even one with pockets as deep as Microsoft, might be difficult.

The deal makes little sense for Microsoft, and would simply be a marketing tool. There are better ways to drive traffic through marketing, than by paying large sums of money for exclusive news content.

Microsoft is trading at $29.62 before the market opens today. News Corp. is at $11.98, and Google is up 0.81 percent in pre-market trading to $569.96.

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