Is Murdoch's Next Move a Subscription-Free Wall Street Journal?

Rupert Murdoch will probably make a move that will raise some eyebrows, though it won't be as bold as taking over MySpace or acquiring Dow Jones Inc. (DJ). His next order of business could be to make the Wall Street Journal Online free, and fully supported by ads rather than deriving a majority of its income from subscriptions for two simple reasons; untapped reach and the lucrative ad revenue of a financial site.

At the risk of being too general, let's take a look at Lehman Brothers analyst Douglas Anmuth's report that was published a few days ago on the "what if" scenario on the impact of a free Wall Street Journal Online. He gives us a few specifics. WSJ.com has 1 million paid subscribers, and will generate about $140 million in total revenue this year split between subscription and advertising revenue. In order for a free Wall Street Journal Online to work out better financially, WSJ.com would have to at minimum double page views, and that's considering the fact that the site commands four times the ad revenue of a page view compared to a site like NY Times.com. It sounds like a lot, but it really isn't.

In the latest available month (June 2007), the Wall Street Journal Online had 1.5 million visits ,and 9 million page views domestically. But that is hardly a good reach compared to the leading financial sites Yahoo! Finance (YHOO), MSN Money (MFST), and AOL Money (TWX) which reach bring in over 10 million unique visitors a month.

WSJ.com visitors mostly consist of paid subscribers at this time, and so there is plenty of upside that will come from cross-linking across the internet, and pulling traffic away from the financial news site leaders. Add in the wild card that the Wall Street Journal Online would benefit from News Corp.'s (NWS) global distribution, and a free WSJ.com is definitely a worthy proposition.