Today in dumb ideas

Rupert Murdoch wants to sue the shit out of Google for directing web traffic to his newpapers' websites.

Before Murdoch realized that Google posed a mortal threat to his empire, he used to praise it, recalls one former News Corp. employee. “We would be sitting in meetings, and he’d go on and on about the Google guys, and how they had dry cleaning and massages, and what a great company and culture it was,” the staffer recalls. When he bought the Journal, Murdoch thought about making online content free, even though the Journal was one of the few successes in fee-based news sites. And Murdoch and Wendi are friends with Google founders Sergey Brin and Larry Page, though they are not as close lately, given the heated nature of their conflict.

Last year, Murdoch and his senior executives decided they needed an organized counteroffensive. As a code name, they chose Project Alesia, named after Julius Caesar’s victorious siege of the Gallic forces in 52 B.C. Murdoch conceived the fight against Google as a political campaign. He mapped out distinct phases. First, Murdoch and Thomson would make a series of provocative speeches to drum up press, using News Corp.’s media outlets and other interview opportunities to shape the debate. In February 2009, during an appearance on Charlie Rose, Thomson said, “Google devalues everything it touches.” In April, Thomson said in an interview, “Certain websites are best described as parasites or tech tapeworms in the intestines of the Internet.” And in December, Murdoch published an op-ed in the Journal declaring that “there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production … To be impolite, it’s theft.”

The inflammatory rhetoric generated a flurry of press and laid the foundation for the announcement that News Corp. would begin charging for its online content. Last year, he hired Jonathan Miller, the former CEO of AOL, who, along with Murdoch’s son James, is leading a team of senior executives to develop an online pay model while negotiating an accord with Google. The plan, which is still evolving, envisions bundling all of News Corp.’s newspaper content and partnering with other publishers to deliver it to mobile devices and the coming crop of tablets. James, according to executives involved in the discussions, believes readers will pay for bundled content like viewers pay for cable television. “It’s very much like a cable thing,” one News Corp. executive explained. “If 5 million people around the world are willing to pay, that changes the economics of the industry.”

Meanwhile, Miller has also been in talks with Microsoft about possibly pulling all of News Corp.’s content from Google and signing an exclusive distribution deal with Bing. And if talks with Google break down, Murdoch is readying a lawsuit against them. “He’s pretty tightly wound up over Google and has been ready to sue them,” says a senior media executive who recently conferred with Murdoch. “He doesn’t trust them at all.”

Murdoch’s defiance invited speculation that he had lost it. And continued trouble at his MySpace division furthers this view. “Digital is out of his comfort zone,” a former senior MySpace executive says. “It’s much more the Wild West. He gets the raw-competition part of it, but he’s never been in a place where the business model isn’t clear. The destruction is just happening so fast.”

I have to give Uncle Rupert some credit for trying to wrap his brain around the internet, but he just doesn't get it. Obviously.