Google, not Rupert Murdoch, is the biggest threat to media plurality in the UK

As secretary of state Jeremy Hunt continues to keep mum, there has been continuing speculation that some sort of break-up of News Corp’s UK media assets might be the price of it acquiring the 61 per cent of BSkyB it doesn’t already own.

The latest reports are that Sky News might be “hived off” in some way, such as by creating an independent editorial board – but that a sell-off is unlikely because it loses more than £30m a year.

As we know – the major rival newspaper groups and the BBC and Channel 4 are all against the £8bn deal citing the threat to media plurality it would pose. Trinity Mirror chief executive Sky Bailey has been particularly outspoken.

I would argue that a sell-off of Murdoch’s print assets could be the worst of all possible outcomes. Richard Desmond would be the most likely purchaser of some titles at least – an outcome that would be great for rival publishers (given his track record as owner of the Express titles), but bad news for journalists.

I don’t mean to disparage the hard work done by Express journalists, or Desmond’s own business acumen, but his modus operandi with newspapers is to sweat assets, cut costs and manage decline in order to maximise profits. It is doubtful that anyone other than Murdoch would tolerate the sort of losses The Times has incurred over the last few years (combined losses for the Times and Sunday Times were £87m the year before last and £50.2m last year).

Murdoch probably controls too much of the UK media (and let’s face it, he already DOES control BSkyB) – but isn’t the biggest threat to media plurality in the UK not Murdoch but Google?

It controls 90 per cent of the UK search engine market (versus 67 per cent in the US).

Anyone who runs a free-to-air news website in the UK is dependant on Google as the single biggest source of traffic. And in terms of the business side, Google is grabbing the lion’s share of the ‘search’ advertising that many online media business models are based on.

Surging fourth quarter profits announced yesterday saw Google make $2.54bn profit on revenue up 26 per cent to $8.44bn for that three-month period alone.

As former Channel 4 boss Luke Johnson noted earlier this month in the Daily Mail – the UK is one of the biggest overseas markets for Google, but the search giant pays tax at a rate of just 2.4 per cent on its overseas earnings.  Google is siphoning off hundreds of millions from the UK advertising market, providing no content in return and apparently paying very little in tax.

If the current Government was serious about protecting media plurality it would take a close look at Google.

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