ANALYSIS - Murdoch courts trouble if he blocks Google on news

By Robert MacMillan

NEW YORK (Reuters) - Rupert Murdoch has spent months complaining that Google is ruining the newspaper business, and now he wants to do something about it.

But, his proposal is a gamble, and one that could hurt News Corp instead of helping it.

Murdoch is considering removing News Corp's news from Google's Web search results, and is talking to Microsoft Corp about listing the stories with its Bing search engine instead. Microsoft would pay for the privilege, sources have told Reuters, but it was not clear how much.

If Murdoch pulled this off, he will likely be followed by other newspaper publishers looking for ways to make money when all the old ones are waning in the digital age.

Newspaper owners resent Google because the Internet company makes money from the advertisements that it displays next to news search results.

News Corp's proposal is a way to get a cut of the action. Risks include destroying ad revenue most news websites depend on if traffic goes down because Google users can't find the stories. It's also not clear how regulators would feel about such a move.

"You're immediately cutting off audience," said Jeff Jarvis, media blogger and author of the book "What Would Google Do?"

Google brings as much as 14 percent of incoming traffic to News Corp's U.S. news websites, including the New York Post and Fox News, Bernstein analyst Jeffrey Lindsay estimated.