In House hearing, Brad Smith says monetizing referral traffic has become increasingly difficult for news pubs because Google squeezes out most of the profit

$MSFT's @BradSmi today https://blogs.microsoft.com/ ... @kerrymflynn : Microsoft's @BradSmi's quotes a Florida resident who lives in a place without a local newspaper: “After years without a strong local voice, our community does not know itself.” From this NYT story: https://www.nytimes.com/... @kerrymflynn : “Microsoft is a tech company and like every business we have business interests... What is also obvious is the issues are not about our business or any single business... they're about the future of journalism in this country.” - @BradSmi https://twitter.com/... Brian Fung / @b_fung : NEW: Sen. Amy Klobuchar plans to hold multiple tech-related antitrust subcommittee hearings, including standalone hearings on app store policies and news publishing, she tells me. Other hearings will also cover consolidation in agriculture, cable, transportation, she says. Thanks: @fxshaw

Microsoft On the Issues 2021-03-13 Brad Smith

Context & Ripple Effects

Brad Smith’s appearance follows reports that he would testify before the House antitrust subcommittee on tech competition and news media. His argument puts publisher referral economics at the center of the planned scrutiny of news publishing and platform power.

The complaint also foreshadows a later publisher-side characterization of Google as holding publishers “hostage” in the ad market, reinforcing that the dispute concerns bargaining leverage rather than traffic volume alone.

First-order effects

House lawmakers gain testimony from Microsoft that Google’s share of referral-traffic economics leaves news publishers with less ability to monetize audience acquisition.
News publishers’ revenue concerns are elevated in the antitrust discussion alongside Sen. Amy Klobuchar’s planned standalone hearing on news publishing.

Second-order effects

Google faces a more pointed policy challenge over how value from publisher-generated referral traffic is divided, while Microsoft publicly aligns itself with the publishers’ argument.
Publishers can use the hearing record to frame platform dependence as a competition issue, not solely a commercial problem with individual traffic deals.

Third-order effects

If congressional scrutiny treats referral monetization as a bargaining-power problem, news distribution may become a lasting focus of antitrust oversight of large digital platforms.
The broader fault line is whether publishers retain meaningful economic control when platforms intermediate discovery and advertising around their work.

The trend: News publishers’ dependence on major platforms for audience and ad revenue is increasingly being contested through competition-policy arguments about who captures the value of distribution.

Discussion

@reckless Nilay Patel on x
Google vs Microsoft is back, baby https://www.theverge.com/...
@fxshaw Frank X. Shaw on x
Technology and the Free Press: The Need for Healthy Journalism in a Healthy Democracy https://blogs.microsoft.com/ ... tip @Techmeme https://twitter.com/...
@bradsmi Brad Smith on x
Thank you @davidcicilline & @RepKenBuck for the opportunity to address tech & its impact on the free press. It's not about picking winners and losers - it's about finding new solutions to restore the healthy journalism on which our democracy depends. https://blogs.microsoft.com/ …
@b_fung Brian Fung on x
Microsoft's Brad Smith testifying now before the House: “The news in America today is not alive and well.”
@gartenberg Michael Gartenberg on x
I missed the good old days. Now if Apple and Microsoft decide to get into it again, that could be fun to watch too. https://twitter.com/...
@kantrowitz Alex Kantrowitz on x
Google vs. Microsoft making a play for most intense tech giant fight. Facebook vs. Apple still in the lead but getting close.
@stevesi Steven Sinofsky on x
Microsoft President Brad Smith and others testify on a “free and diverse press” before a House Judiciary subcommittee @CSPAN https://www.c-span.org/... // whereby Microsoft adds to the misdirection that the current “tech” industry caused the challenges in the media business https…
@marypcbuk Mary Branscombe on x
I particularly like the bit where it sounds as if Brad Smith will offer to tutor Google in how to read government legislative proposals https://twitter.com/...
@marypcbuk Mary Branscombe on x
Microsoft: dissects Google's business model (snarking Google News as a loss leader Vegas buffet) and throws considerable side eye Google: snarking Microsoft security like it was the Windows XP days and collaborating on security wasn't in fashion https://twitter.com/...
@carnage4life Dare Obasanjo on x
Google takes the gloves off and publishes a post claiming Microsoft's encouragement of legislation to force Google to pay for news is to distract the news cycle from it's product vulnerabilities that led to massive hacks.😬 First Apple vs Facebook and now this. It's a new world. h…
@jason_kint Jason Kint on x
Microsoft, like with Apple, is a critically important voice and yes showing strong leadership by supporting press, consumer privacy and calling out uneven bargaining power considering size of their own companies. I respect this and yes it's easier due to their own biz models. /3
@kerrymflynn @kerrymflynn on x
“Let's hope that in a century from now if people aren't using laptops or cell phones or anything we us today... journalism is still alive.” - Brad Smith “What our democracy depends on is the First Amendment. Journalism is fine.” - Rep. Jordan
@bowknowsbiz Bowdeya Tweh on x
What has Google talking spicy? “While ... referral traffic does have value, monetizing that traffic has become increasingly difficult for news organizations because most of the profit has been squeezed out by Google.” — $MSFT's @BradSmi today https://blogs.microsoft.com/ ...
@kerrymflynn @kerrymflynn on x
Microsoft's @BradSmi's quotes a Florida resident who lives in a place without a local newspaper: “After years without a strong local voice, our community does not know itself.” From this NYT story: https://www.nytimes.com/...
@kerrymflynn @kerrymflynn on x
“Microsoft is a tech company and like every business we have business interests... What is also obvious is the issues are not about our business or any single business... they're about the future of journalism in this country.” - @BradSmi https://twitter.com/...
@b_fung Brian Fung on x
NEW: Sen. Amy Klobuchar plans to hold multiple tech-related antitrust subcommittee hearings, including standalone hearings on app store policies and news publishing, she tells me. Other hearings will also cover consolidation in agriculture, cable, transportation, she says.
@googlepubpolicy @googlepubpolicy on x
But let's discuss the issue, not be derailed by naked corporate opportunism. As Microsoft faces increased competition from us and others, it's reverting to its familiar playbook of attacking rivals and lobbying for regulations that benefit its own interests.
@ceciliakang Cecilia Kang on x
Brad Smith, Microsoft pres, throws behind an antitrust bill that would give news orgs greater bargaining power w Google, Facebook. 30mins before the hearing and Smith's testimony, Google releases blog from GC calling Smith's testimony “Self Serving” https://blog.google/...
@bowknowsbiz Bowdeya Tweh on x
Shots fired (or shots returned) —> Google v. Microsoft “Unfortunately, as competition in these areas intensifies, they are reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests.” https://blog.google/...
@wycats @wycats on x
https://www.theverge.com/... You're “breaking the way the open web works” says the company that has released product after product that only works on its web browser. These folks are very very credible.
@funnygodmother Cheryl Platz on x
So the big defense Google came up with is “change is bad and look at this other stuff Microsoft has done?” If we're talking other stuff, let's talk your Ethics in AI problems, Google. 🧐 The current system doesn't work - how many journalists did HuffPo lay off this week? https://t…
@johnvoorhees John Voorhees on x
Something something AMP https://www.theverge.com/...
@mikebaz Michael C. Bazarewsky on x
Google has somehow managed to both practice “whataboutism” and fuck it up both at the same time. That's kind of amazing. https://twitter.com/...
@backlon Dieter Bohn on x
Both things can be true: Google's dominance in every part online ads has distorted the market and made it harder for media companies to make money Microsoft's lobbying could have unforeseen consequences that could harm the open web in serious ways https://www.theverge.com/...
@jason_kint Jason Kint on x
Wow. Senator @SenMikeLee absolutely scorching Google in a prerecorded speech at Google's trade group's event. He is even referencing collusion allegations with Facebook in the antitrust lawsuits and the potential of Facebook and Google being a “bonafide cartel.” Get me video.
@googlepubpolicy @googlepubpolicy on x
The timing of Microsoft's sudden interest here is no coincidence. Read more here: https://blog.google/...
@mshannahmurphy Hannah Murphy on x
Punchy statement from Google accusing Microsoft of “naked corporate opportunism” for backing a US bill to make tech platforms pay for news: https://blog.google/... Also damn where Google says this “marks a return to MSFT's longtime practices”, it hyperlinks to the FUD wiki 🍿👀 htt…
@9to5google @9to5google on x
Google accuses Microsoft of ‘naked corporate opportunism’ that could break the web https://9to5google.com/... by @technacity https://twitter.com/...
@stevekovach Steve Kovach on x
“Scroogled.” Now there's a term I haven't heard in a long time. https://www.cnbc.com/...
@alex @alex on x
I missed this Google-MSFT diss that I fully appreciate https://blog.google/... https://twitter.com/...
@tomwarren Tom Warren on x
Google has launched a scathing attack on Microsoft today, accusing it of trying “to break the way the open web works.” Google also accuses Microsoft of trying to distract from the SolarWinds attacks. Yikes. Full details here: https://www.theverge.com/... https://twitter.com/...
@birnbaum_e Emily Birnbaum on x
Yikes: “It's no coincidence that Microsoft's newfound interest in attacking us comes on the heels of the SolarWinds attack and at a moment when they've allowed tens of thousands of their customers ... to be actively hacked via major Microsoft vulnerabilities.” https://twitter.com…
@markjansen10 Mark Jansen on x
About MSFT: ‘They are now making self-serving claims and are even willing to break the way the open web works in an effort to undercut a rival. And their claims about our business and how we work with news publishers are just plain wrong.’ https://blog.google/...
@suka_hiroaki Andreas Proschofsky on x
THAT paragraph. Wow. Can't remember the last time Google openly attacked a competitor like that. Fully dragging them through the dirt for the Exchange Mass hacks. In an article that actually is about news and journalism. https://blog.google/... https://twitter.com/...
@shiraovide Shira Ovide on x
Giant tech companies arguing over which giant tech company is more parasitic and self-serving is ... bad. Let's not do this. https://twitter.com/...
@kantrowitz Alex Kantrowitz on x
Google's Kent Walker takes off the gloves and comes after Microsoft: “It's no coincidence that Microsoft's newfound interest in attacking us comes on the heels of the SolarWinds attack” https://blog.google/... https://twitter.com/...
@gerritd Gerrit De Vynck on x
Google is going off on Microsoft for supporting regulations against it. “Naked corporate opportunism,” “diversionary,” “self-serving” https://blog.google/... https://twitter.com/...
@fantaalexx Alexander Fanta on x
Google attacks Microsoft full-on for alleged “naked corporate opportunism”. The spat broke out after Microsoft aligned itself with publisher in Australia and elsewhere demanding license payouts from Google and Facebook for linking to their content. See: https://blog.google/...
@jamestitcomb James Titcomb on x
OOOH the Google v Microsoft wars are back. “It's no coincidence that Microsoft's newfound interest in attacking us comes on the heels of the SolarWinds attack... maybe it's not surprising to see them dusting off the old diversionary Scroogled playbook.” https://blog.google/...
@davidshepardson @davidshepardson on x
.@Google goes into the attack against @Microsoft https://blog.google/... https://twitter.com/...
@b_fung Brian Fung on x
Google is trying to blunt Microsoft's line of attack in today's upcoming House antitrust hearing on Big Tech's impact on news publishing — accusing Microsoft of “self-serving claims” and trying to deflect from cybersecurity woes: https://blog.google/...
@ccianet Ccia on x
Ahead of today's House antitrust hearing, see Google's post: Our ongoing commitment to supporting journalism @google https://blog.google/...
@kantrowitz Alex Kantrowitz on x
This is going to be a fun one. Smith, @NewsCEO, and @ggreenwald all testifying today. Perhaps Smith can elaborate on his comments about how Microsoft buys politicians. https://twitter.com/...

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