A Band-Aid for newspapers

I think I'm supposed to be overjoyed at this news:

News Corp. CEO Rupert Murdoch just may have stumbled onto a way to save the newspaper business.

According to the Wall Street Journal (which like this blog is published by News Corp.), Murdoch has had talked with Microsoft (MSFT) about a deal in which News Corp. would remove its newspaper content from Google's (GOOG) search engine, while continuing to include it in Microsoft's Bing search engine. The story is attributed to "people familiar with the matter."

The story said the talks are in a very early stage, and might not result in a deal; a key issue is the price Microsoft would pay News Corp. to feature its content, which includes not just Barron's and the Journal, but also the New York Post, the Sun, the Times of London, the Australian and various other publications. Unclear is whether the deal might also include MySpace and Fox television properties.

This is a little bit like Dorothy and Toto going through 90 minutes of high drama in the "Wizard of Oz." then finding out she only had to click her heels three times to get back to Kansas. After all the non-stop debate over how advertising might or might not support news over the Internet, not to mention and paywalls, non-profit models, etc., the solution all along was an old-fashioned Macy's-v.-Gimbels kind of old-fashioned business war, with Google in the role of Macy's and Microsoft as Gimbels? Talk about your Christmastime miracle on 34th Street!

In the best-case scenario, a bidding war between Microsoft and Google and maybe other rivals over online newspaper content -- if extended beyond Murdoch's News Corp. to other struggling media outlets -- could keep newsrooms alive for several years and get them over the hump of the financial crisis...

For now, that is. The truth is, these dollars from heaven for online news  are just a Band-Aid, albeit a desperately needed one. This exciting development will only save the business, longterm, if the news companies spend those dollars wisely, by investing in an entirely new eco-system of news, not only more oriented towards the Web as the prime means of delivery but also radicaly different in outlook, built around a community-oriented running conversation and not the old, one-way print-oriented, look-down-on-the-audience dictation that has alienated some former readers and simply bored others.

And to be blunt, the chances are that newspapers would not radically transform the way they do business. Just look at the recent changes at the Washington Post, where the old-fashioned way of doing things is still in charge, even with everything that's happened in the news business over the last decade and all the promises that radical change is around the corner. Because this Microsoft-Google money, if it indeed exists, can and most likely will vanish just as quickly as it appeared.  And then what? Newspapers that wallow in their old ways will now have squandered our last chance to save ourselves.

Four years ago, I wrote this about newspapers:

If we don't change, we will die - and it will be our fault.

Nothing has changed since then. And if the Microsoft-News Corp. deal is simply the newspaper version of "cash for clunkers," it will be more true than ever.