No red herring. Didn't say it was likely to happen, but used it to illustrate the point that Google's business model is built squarely on the back of publishers.
Even the Google apologists must concede this fact, don't you think? Google is doing Murdoch no more favor than any publisher is doing Google a favor. As Tedster has pointed out several times, it is a symbiotic relationship.
It only makes sense when you ralize that both sides have skin in the game. Google seems to be losing sight of this fact, with the result being that an increasing number of people are taking note of the sometimes boorish and bullying tactics they have used more and more.
The cries about customer service, for instance (in the adwords threads of late) are pretty reminiscent of what we once heard about other onetime leaders of the pack, e.g. Yahoo, Inktomi, et. al.
I suspect there a whole lot of people that would pull their business from Google in a hot second IF there were a decent replacement, and frankly, I look forward to a time when there is. In my opinion, Google has transformed the web in as many negative ways as positive - perhaps more (links are a great example) yet the size of their shadow virtually compels one to play by their rules.
I'm rootin' for Murdoch in this one.