Microsoft eager to fill void if Google exits Australia
Microsoft is actively looking to capitalise on Google’s threat to exit the Australian market.
Microsoft is actively looking to capitalise on Google’s threat to exit the Australian market, as the Morrison government hardens its resolve on its news media bargaining code in which digital platforms would pay publishers for their content.
Just days after Google Australia’s managing director, Mel Silva, told a Senate hearing that the company would likely leave Australia if the federal government’s media code became law, Microsoft chief Satya Nadella contacted Scott Morrison to make him aware that his company had the capacity to fill any search engine void left by Google.
At present Microsoft’s search engine Bing enjoys only 3.7 per cent market share in Australia, compared with Google’s 94 per cent. But if Google were to vacate the Australian market — in a country in which it has an annual revenue stream of $4.8bn — Microsoft would be well placed to capitalise with Bing, which has the second highest slice of the country’s search engine users.
It is understood that the Zoom call between Mr Nadella and the Prime Minister occurred last week and was quickly incorporated into Mr Morrison’s schedule.
When Treasurer Josh Frydenberg was asked on Sunday about the call with the Microsoft boss, he said: “They’re watching this very closely, and no doubt, see opportunities here in Australia to expand, too. So this (the media code) is world leading,” Mr Frydenberg said.
It’s understood that Mr Nadella made it very clear that his company had a “Plan B available” if Google makes good on its threat.
A spokesperson for Microsoft said: “We recognise the importance of a vibrant media sector and public interest journalism in a democracy and we recognise the challenges the media sector has faced over many years through changing business models and consumer preferences.
“With respect to the current controversy over a potential code of conduct governing Google and Facebook, Microsoft is not directly involved and we wouldn’t want to comment on that ongoing process involving the ACCC and those companies.”
A spokesperson for Google declined to comment.
Within hours of Mr Nadella’s call to Mr Morrison, Facebook founder Mark Zuckerberg contacted Mr Frydenberg and Communications Minister Paul Fletcher over the proposed media code.
While Mr Frydenberg described their discussion with Mr Zuckerberg as “constructive”, he also said that the Facebook boss didn’t convince him to alter the government’s commitment to making the tech titans pay for the news content that they use on their platforms.
“Mark Zuckerberg didn’t convince me to back down, if that’s what you’re asking,” Mr Frydenberg told the ABC on Sunday.
One insider said that while the discussions were amicable, “there was nothing that remotely resembled a breakthrough” from Facebook’s perspective.
A spokesperson for Facebook said: “Our executives regularly meet with government stakeholders across the world on a range of topics to help inform clear rules for the internet. We’re actively engaging with the Australian government with the goal of landing on a workable framework to support Australia’s news ecosystem.”
In recent days, both Facebook and Google have tried to water down the idea that they “threatened” to leave the Australian market if the code becomes law; instead, they have argued that the possibly of exiting Australia was only a “worst-case scenario”.
But Mr Frydenberg said on Sunday he saw them as threats, and would not relent to their demands.
“I don’t dismiss the threats but I’m not intimidated by them either,” he said.
“They’ve made that threat, but again, we’re in detailed discussions with Google, with Facebook, with the other players across the industry because this has not been a short conversation that we’ve had with these companies over these issues.”
The Senate committee hearing into the news media bargaining code will resume on Monday, with representatives from Treasury, and from small publishers, expected to appear.
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