Rupert Murdoch all but said that he would take his new prize, The Wall Street Journal, and offer it online for free, even though he would be giving up almost one million paid online subscribers and about $50 million in revenue.
Murdoch is probably looking at the nearly $400 million that The New York Times (NYSE: NYT) says it will do through its online editions this year. According to Nielsen Net/Ratings, nytimes.com has more than 13 million unique visitors. WSJ.com has closer to 5 million.
Murdoch has hinted that he will add reporting on national and international news to the Journal's financial coverage. That would give him the opportunity to do real damage to the Times and potentially go after much of its consumer advertising revenue base. With internet advertising revenue at newspaper sites still rising at close to 20% a year, Murdoch is after a pot of money that The New York Times Company must know will be close to $750 million three years from now.
Online newspaper advertising is unusually profitable. The editorial costs are almost all covered by print editions of the papers, while the cost of hosting websites drops each year as storage and bandwidth gets cheaper.
If Murdoch can get wsj.com revenue to $750 million by the end of the decade, he will have come close to justifying his costs for buying Dow Jones & Co. (NYSE: DJ).
Douglas A. McIntyre is a partner at 247wallst.com.
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Reader Comments (Page 1 of 1)
9-19-2007 @ 1:49PM
360view4u said...
Free WSJ -- I can have anomaly with iPod $100 reduction in a day ! i.e. Rupert and Steve both senses price sensitiveness now?
10-16-2007 @ 3:03PM
http://www.InvestEveryMonth.com said...
The New York Times cancelled their Times Select program now that they realize people won't pay for online content. This is a real bummer for online newspaper companies because more people are flocking to their websites (and cancelling their physical paper subscriptions) while online advertising is only accounting for about 2% of the revenue they can get through the offline paper.