When News Corp. (NASDAQ: NWS) outspoken Chairman Rupert Murdoch reversed himself recently and declared that all his company's web properties would soon move to a fee model, were you perplexed? After all, Murdoch runs one of the largest media empires on the planet. Combine that with a conditioned customer used to getting almost all content for free and yes, we have a problem.

Murdoch's empire just suffered an advertising meltdown with the rest of the world, with News Corp. declaring a huge decline in ad revenue for its latest quarter. Just a few years ago, Murdoch was toying with the idea of dropping the fee for looking at the Wall Street Journal's articles and columns. He's done a 180 here and wants to bring the Journal's pay-per-use model to just about every web property his company owns while he shouts "quality journalism is not cheap" from the rooftops of Fox News.

Fortune's Devin Leonard writes about the changes that have come at the Wall Street Journal following its acquisition by News Corp. (NYSE: NWS) and concludes that Rupert Murdoch has failed to live up to his promise to maintain editorial independence at the paper.

After pushing out Marcus Brauchli as managing editor, he installed Robert Thomson at the helm -- an Australian who had previously sat at the helm of News Corp.'s The Times, a London newspaper.

There's nothing too shocking here. Gary Weiss and many others had predicted all along that, promises to the contrary aside, Murdoch would find a way to do what he wanted once he won his prize.

Leonard concludes that "Murdoch must be pleased. The Bancrofts probably feel differently. But it's too late for them to complain now. If they didn't want Murdoch to have his way, they never should have parted with Dow Jones."

The problem is that, as a public company with a fiduciary responsibility to deliver returns to shareholders, Dow Jones, ethically and maybe legally too, had to sell given that Murdoch's offer was such a strong one. The only way to avoid putting profits over journalistic integrity is to be a private company.

MAJOR PAPERS:

• Three years into its $35B takeover of Nextel, the Wall Street Journal reported that Sprint Nextel Corporation (NYSE: S) is considering selling or spinning off the troubled unit. Few details were available and a deal is not imminent.
• The Wall Street Journal also reported that pressure is mounting on Citigroup Incorporated's (NYSE: C) CEO Vikram Pandit to show that he can turn around the troubled bank. Executives believe Pandit, who has been praised for his cautious and deliberate approach, has been taking "too long" to make crucial decisions.

WEB SITES:

• According to a person close to Google Inc (NASDAQ: GOOG), Reuters reported that Google and Yahoo! Inc (NASDAQ: YHOO) are still "hammering out the intricacies" of a potential advertising and search deal. The source said no final agreement has been reached yet.
• ABC News learned that if Rupert Murdoch does not testify in a lawsuit accusing one of his companies of "corporate espionage," it may cost News Corporation (NYSE: NWS) hundreds of millions of dollars, a federal judge overseeing the trial said. News Corp has denied any wrongdoing, and lawyers maintain Murdoch had no direct knowledge of the unit's alleged hacking into EchoStar Corporation's (NASDAQ: SATS)/DISH Network Corporation's (NASDAQ: DISH) security code and posting it on the Internet.

TheStreet.com's Jim Cramer says to ignore the inflation worrywarts; the Fed needs to keep easing to keep things in check.

"Mounting Inflation Concerns Weigh on Fed's Next Move."

Here's where we need Rupert Murdoch to exert control over the Journal. Here's where we need some real intervention from someone with business sense.

That's right, because we have seen a "mounting inflation concerns" headline about the Fed pretty much every week since the easing began. It's become something like "DA Probes Rackets," when there's nothing else to write about.

Do you realize that we have had gigantic easings right after Fed frets of inflation or when some Fed head says nothing's wrong and the fundamentals are sound? Do you realize that even under Murdoch, there is no accountability for this stuff for anyone -- neither Fed nor the WSJ?

As the newspaper industry is assaulted by bloggers on one side and readers' decreasing willingness to pay for content on the other, the industry in searching for the right model.

Current trends show companies like the New York Times (NYSE: NYT) lowering or removing the "pay wall" between users and content. The NYT recently discontinued its Times Select section, which required subscription fees, and since then, traffic to parts of the site that previously required payment has increased greatly.

So, it's not surprising to read an article today in PaidContent.org that claims similar success with a change in the model at the Financial Times' website. PaidContent.org reports claims by staff at FT.com that admit to traffic and registration increases due to a recent change in the subscription structure.

"FT.com now allows readers coming in from blogs and other aggregators to read five stories a month for free and another 30 for free upon registering with the site," says PaidContent.org. After that, users would have to pay up.

The result?

MAJOR PAPERS:

• The Wall Street Journal's "Deal Journal" reported that Sam Zell's planned buyout of Tribune Company (NYSE: TRB) is contingent on the receipt of a solvency opinion, and that this is the first time they have ever seen a deal dependant on this.
• The WSJ's "Heard on the Street" reported that Countrywide Financial Corporation (NYSE: CFC) may not be out of the woods yet. Despite executives promising a return to profitability, there is still a risk the company may eventually seek bankruptcy protection or "resort to huge sales" of new stock.
• U.S. private equity group JC Flowers "is understood" to have walked away from the auction for troubled bank Northern Rock, the Financial Times reported.
• Rupert Murdoch is shaking up the management of News Corp (NYSE: NWS.A), the Financial Times reported, giving his son, James Murdoch, control over the company's European and Asian operations, and appointing two trusted executives to lead Dow Jones & Company Inc (NYSE: DJ) and the Wall Street Journal.

WEB SITES:

• Barron's Online's "Weekly Trader" said AutoNation Inc (NYSE: AN) looks attractive now, despite hovering near a multi-year low. The company has also been on a slow but steady quest to diversify away from unpopular domestic brands by snapping up luxury and import dealerships.

U.S. stock futures were slightly lower this morning, indicating a flat to mildly down open on Wall Street. However, all this could change when non-farm payroll is reported an hour before the opening bell. While investors generally expect a rate cut the next Federal Reserve meeting on Tuesday, December 11, it is the size of the cut that may be decided following the labor report due in an hour.

Yesterday, U.S. stocks continued their rally as the White House offered a plan to aid the ailing subprime mortgage market and curb home foreclosures. The Dow industrials rose 174 points, or 1.3%, the S&P 500 added 22 points, or 1.5%, and the Nasdaq Composite rose 42 points, or 1.6%.

Economic data will be the focus this morning and into the trading session:
At 8:30 a.m. EST, November non-farm payroll will be reported. Economists expect the labor market to show signs of softness in November. Still, on Wednesday, Associated Data Processing Inc. showed a bigger surge in private-sector hiring and projected that 189,000 jobs were created in November, much higher than what economists have been expecting. This report be a better indication of what's to come this morning. According to Briefing.com, economists are expecting an addition of 70,000 jobs last month, a much lower figure than that 166,000 added jobs shown in October. [Economists surveyed by Thomson predict a 100,000 addition.]

Newsweek is running an article that Dow Jones & Company, Inc. (NYSE: DJ) current CEO, Richard Zannino, is set to relinquish his CEO position of the Wall Street Journal. This comes one week before Rupert Murdoch's News Corporation (NYSE: NWS) is set to assume control over Dow Jones.

This move comes after a contentious battle waged by Murdoch to lobby the Bancroft family to vote their controlling shares in favor of a merger.

The Newsweek article provides some color on this whole process saying, "Fearful that Murdoch might use the Journal as a platform to forward his own business and political views, numerous Dow Jones employees and executives tried to lobby the Bancrofts not to sell. But after Murdoch promised to preserve the Journal's editorial independence, the family decided to take the money and run."

As for Zannino, the ex-fashion industry and retailing executive, Murdoch doesn't seem to have found a place for him in the "new" Dow Jones. But that's OK, don't shed a tear for Zannino. His parting package weighs in at about $19 million, according to the Newsweek

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. He does not own any stocks mentioned.

In what could could be a sign of things to come, Rupert Murdoch and executives at the Dow Jones Company's (NYSE: DJ) Wall Street Journal are trading arguments in the press about the future of the newspaper's online edition.

A few days ago, Murdoch said that he planned to make the Wall Street Journal Online free, and make up for the lost subscription revenue by selling advertising on the site. Given the Journal's status as the premier financial news source, he estimated that he could increase traffic 10- to 15-fold from its current base of about 1 million subscribers.

Well some executives at the paper responded that the "The exclusivity of Journal content provides value beyond the Web site" and that making the Journal free would reduce print subscriptions and cannibalize traffic to other Dow Jones-owned sites.

My hunch is that Murdoch is right -- online advertising is exploding and the idea of a property as valuable as this newspaper getting so little traffic makes me think there's a better way. But regardless of who is right, this is a fight Murdoch will probably win. It's been said before and it's worth saying again: Rupert gets what Rupert wants.

In a sign that a Rupert Murdoch-controlled Wall Street Journal could be more reader-friendly, the News Corp (NYSE: NWS) CEO says he will make the paper's website free to access. He hopes to make up for the drop in subscription revenue by selling advertising.

According to The New York Times, Mr. Murdoch says, "We are studying it and we expect to make that free, and instead of having 1 million, having at least 10 million-15 million in every corner of the earth."

Exactly. The Wall Street Journal is, by far, the most respected name in financial journalism, and by making it free online, it instantly becomes the number one most-respected business site in the country. There's also a socially responsible side to this move: High school students and other less-affluent followers of business news will have access to the best coverage.

There was a lot of talk about Murdoch's grubby paws ruining The Journal. But if this first move is any indication, he'll be a much better steward than the Bancrofts were.

Media owners have been chomping at the bit to be able to own both a TV station and a newspaper in the same city. Two major deal makers - Samuel Zell, a Chicago investor who is leading the charge to take the Tribune Company (NYSE: TRB) private, and Rupert Murdoch, Chairman and CEO of News Corp. (NYSE: NWS) who has tried for years to change the rule so he can continue to control both the New York Post and the Fox television station in New York -- hope it happens soon. If the rules change for Zell, he'll be able to own TV stations and newspapers in five cities - New York, Los Angeles, Hartford and the Miami-Fort Lauderdale area.

Well they may get their wish if Federal Communications Commission Chairman Kevin Martin has anything to say about it, according to the New York Times. The Times reports that Martin plans to repeal the decades-old media rule forbidding companies from owning both a newspaper and a TV or radio station in the same city. Right now an $8.2 billion buyout of the Tribune Company is hanging in the balance. Zell wants to take the company from a public to a privately held company by its employees, but the rule is in the way of completing the deal.

Sometimes corporate competition can get pretty silly and downright petty, and this would appear to be one of those instances. Rupert Murdoch's News Corp. (NYSE: NWS) rolled out its new Fox Business Network yesterday [subscription required], a few months after the company won its bid to acquire Dow Jones (NYSE: DJ), the parent company of The Wall Street Journal and MarketWatch.

And now, for the corporate espionage. CNBC somehow got Dow Jones to sign a contract allowing the cable business news network to buy all the advertising on Marketwatch.com on Monday, October 15th -- the day that News Corp., the soon to be parent company of Marketwatch, was set to launch its new business network.

According to The Wall Street Journal, "The advertising contract was signed Sept. 11, 2007, and included specific provisions for Oct. 15, the Fox Business Network launch date, according to a copy of the contract reviewed by the Journal. On that date, CNBC agreed to spend $59,500 to buy all of the ad space on Dow Jones's MarketWatch.com site, and agreed to an additional $27,500 to make sure any visitor to MarketWatch's home page would first see an advertisement from CNBC. This is known in ad parlance as a "roadblock."

Then Dow Jones pulled the CNBC ads yesterday, in an apparent attempt to suck-up to Mr. Murdoch -- it's hard to understand why else it would have done that.

All of this interesting and somewhat amusing. The one thing Dow Jones can probably take from it is that it should do a better job reviewing contracts. Shouldn't CNBC's request for October 15th have raised some alarms before the contract was signed?

But in the end, it probably isn't that important. FBN will be able to generate plenty of publicity, and its success or failure will depend on the quality of its content -- not the ads on MarketWatch on the day of its launch.

According to a report in the New York Times (NYSE: NYT), it looks like the Financial Times will provide some degree of free access to its site -- that is, up to 30 articles per month.

Sounds kind of wimpy to me. Why not just provide it all for free? Isn't that the trend?

After all, the NY Times recently ended its subscription service. Murdoch is reportedly mulling the same thing for the Wall Street Journal. And we are also seeing the free-trend in other areas of media, such as television shows.

I talked to Rafi Mohammed about this. He is an expert on pricing and is the author of the book The Art of Pricing. According to him:

"In my business of pricing, all too often I see companies give away value with little hope of any return. However, the recent spate of free giveaways in the media business make sense. Newspapers like the New York Times are offering free access because if they don't, they risk losing relevancy to online news sites like CNN and Yahoo! (NYSE: YHOO). In the case of television, what does it matter if people watch advertisements on their television or on their laptop? Giving away television shows (with advertising) downloads is directly in line with television's current business model."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Dow Jones & Company, Inc. (NYSE: DJ)'s Wall Street Journal (a.k.a., The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its format and now looks to me like a Holiday Inn bath towel. Towel Talk offers a perspective on its news and views.

Rupert Murdoch is right about one thing -- The Towel could save some serious money by getting rid of the dead tree form factor.

The New York Times [registration] quotes Murdoch as saying "What if, at The Journal, we spent $100 million a year hiring all the best business journalists in the world? Say 200 of them. And spent some money on establishing the brand but went global - a great, great newspaper with big, iconic names, outstanding writers, reporters, experts. And then you make it free, online only. No printing plants, no paper, no trucks. How long would it take for the advertising to come? It would be successful, it would work and you'd make a little bit of money."

Go to the online Wall Street Journal and (if you're a subscriber) click on the top story. The scoop (right now it's the immigration bill) is being brought to you by the Associated Press.

Why? According to a message posted on Poynter Online and released by the Newspaper Guild, the entire U.S. reporting staff of the Wall Street Journal is staging a walk-out (or a not-show-up, I guess). "The Wall Street Journal's long tradition of independence, which has been the hallmark of our news coverage for decades, is threatened today. We, along with hundreds of other Dow Jones employees represented by the Independent Association of Publishers' Employees, want to demonstrate our conviction that the Journal's editorial integrity depends on an owner committed to journalistic independence," they write.

Wall Street Journal parent Dow Jones & Company Inc (NYSE: DJ) is close to closing a deal with rowdy potential daddy News Corporation (NYSE: NWS). The reporters are evidently worried about being handed pink slips when the deal goes through; they say this step is a reminder to "Dow Jones management that the quality of its publications depends on a top-quality professional staff." They'll be back at their desks this afternoon.

I guess a real news hound can't stand missing a whole day's worth of news. Interestingly, the bloggers are still on duty, though it appears my most-read, David Gaffen, is on vacation this week.