Comparison of Media Company Performance Efficiency Based on the Search Engine’s Method of Providing News Content (External Links vs. Internal Links)

Abstract

The conflict between the search engine and the news media industries has become a fierce dispute. News media companies produce news content and receive advertising and subscription fees, however, search engines that select and place content that they did not create themselves do not pay copyright fees, depending on the situation. We focused on search engines that use two hyperlink methods (external links vs. internal links) to deliver news content to consumers and analyzed how the two hyperlink methods affect the technical efficiency of media companies. Still, there have been few empirical studies on the performance efficiency of news media companies depending on how search engines provide news content. Analyzing by meta-frontier production function, the result shows when news services are provided through internal links, media companies are strongly constrained under the influence of search engines regardless of the companies’ size, financial status, and reputation. However, if a media company can provide a suitable user interface and high-quality content to consumers, the external link strategy can be competitive with the internal link strategy. The result of this study can be a starting point for resolving conflicts between search engines and the media industry.