Maybe Now We Know Why Rupert Murdoch Hates Google

A few weeks ago, an in-depth New York Magazine profile of News Corp. honcho Rupert Murdoch revealed that he was prepared to sue Google and according to one NYMag source “doesn’t trust them at all.”

One reason for all the fear and loathing is that Google embodies one of the scariest trends for traditional media outlets — aggregation. Murdoch isn’t the only one who’s nervous. New York Times Chairman Arthur Sulzberger recently said he was okay with Google, with which the Times shares revenue on its stories, but that there was an important difference between fair use and theft. Sulzberger defined theft as simply lifting stories from the Times without even linking to the source.

A look at yesterday’s State of the News Media report from the Pew Project for Excellence in Journalism may help explain the trepidation: The comparatively cheap task of copying others’ news and posting it online pays major dividends in terms of Web traffic and influence.

Although readers in aggregate are still going to traditional outlets for their online news, a look at the top winners in the space is somewhat disquieting for traditional media. Aggregator sites play a substantial role in online news, taking up 27% of the top 199 news Web sites. More important, four of the top six sites, including Google News, are run by Internet search giants.

From the Pew report:

Four of the top six news sites are either pure aggregator sites (Yahoo and Google News) or include a strong element of aggregation with some editing or original content (MSNBC and AOL).

A look at the top 20 sites reveals Google News (No. 6) ranks ahead of Fox News (No. 7) in terms of unique visitors, according to a Neilsen study cited in the Pew report. By Hitwise’s count, Google again edges Fox, with a 2.76% share of that market vs. Fox’s 1.96%. More worrisome for all traditional news outlets, Yahoo! News, MSNBC, and AOL News rank in the top three Nielsen spots. Yahoo! ranks at the top of both lists with a huge advantage over its peers, garnering a whopping 7.18% share of its online audience, per Hitwise.

Remember, the top Web sites get the lion’s share of traffic. But there is even more reason for news organizations to get ultra-competitive. Says the Pew report:

On both lists, however, the traffic also drops off sharply after the top few websites. According to Nielsen’s data, just eight sites average more than 10 million monthly unique visitors (as measured from September through November, 2009 by Nielsen). The sites at the end of the top 20, CBS News and BBC News averaged half that. And the difference between the first site and the eighth is about 30 million.

In today’s environment, jumping up a few spots can make a huge difference. We understand why traditional news outlets would be worried about copy-paste aggregators beating them in the race for readers.