Microsoft and News Corp have been in discussions that would involve a payment to News Corp to "de-index" all of its stories from Google, according to the Financial Times.  This could potentially cause a search engine battle between the two giants and start bidding wars for indexing rights as they begin payments to content producers.

However, the Financial Times has learnt that Microsoft has also approached other big online publishers to persuade them to remove their sites from Google’s search engine.

This is a desperate measure by Microsoft to slow the growth of their rival, Google.

One website publisher approached by Microsoft said that the plan “puts enormous value on content if search engines are prepared to pay us to index with them”.

Microsoft’s interest is being interpreted as a direct assault on Google because it puts pressure on the search engine to start paying for content.

“This is all about Microsoft hurting Google’s margins,” said the web publisher who is familiar with the plan.

Of course it is.  However, it is a very dangerous game for the publishers to play -- they should in no way take Microsoft's interest to be anything but a desperate move.  The publishers should look at their ongoing decline for what it is; a failed strategy to use new media to gain audience rather than the fault of inexpensive real time distribution enabled by the internet.  The reason people are using other content than that of old line newspapers is that the main stream media have failed to do their jobs, providing a biased product that often includes material omissions of fact, distortions and outright lies (here, here, here, and here for examples of just one outlet's transgressions).  People no longer trust their product.  Personally, I don't think any Google users will miss any News Corp products a bit.

Listening to an interview of Rupert Murdoch on Sky News a couple weeks ago, other than the ignorance he displayed of how the medium of the internet works, he threatened:

There's a doctrine called fair use, which we believe to be challenged in the courts and would bar it altogether...

The only problem with that logic is that his (and everyone else's) copyright ends where our first amendment rights begin.  As techdirt put it:

Wow. Of course, if that's true, then (again) we need to point out that News Corp. has been making use of fair use for years with its own aggregators. In fact, most news organizations regularly make use of fair use. Perhaps News Corps' lawyers who work in their news divisions might want to sit Murdoch down and explain the importance of fair use from a reporting perspective. They might also want to point him to the history of fair use within copyright law, in case he thinks it's something that was just made up yesterday.

UPDATE: According to Bloomberg, the Denver Post and the Dallas Morning News are considering joining News Corp.

The Murdoch interview: