Senior Dow Jones Executives Lobby Murdoch To Keep The Wall Street Journal’s Web Site Subscription Based But He Believes Opening It Up For Free Can Bring In Much More Than Its Current Annual $65 Million

Dow Jones , headed by its chief executive Richard Zannino, wants to keep to the subscription model and a spokeswoman says, “We are continuing to evaluate our online model and look for opportunities to grow our business,” and Daniel Bernard told the Editors Weblog that he thought the Journal’s hybrid service – some parts of the site are open for free to the general public -- is “a really good balance” with the paid-for section a must read for financial experts whereas the open pages are more for a general readership.

But Rupert Murdoch has made it very clear that in order to get his money’s worth from Dow Jones he has to expand its revenue – there will be cost cutting and he said already that $100 million of “low hanging fruit” has been identified -- but the main strategy is to increase incoming money – and he believes an advertising model will produce more than the Journal’s web site now produces.

He told a Goldman Sachs conference this week, “Dow Jones presents a great challenge... We’re about expanding revenue.”

Murdoch told the conference he does not believe he will lose that $50 million of subscriber revenue if he opened the site up. He admitted that for a while the revenue would certainly decrease but, “Then, if the site is good, I think you’d get much more than that back just in textual search. And I think you’d get not one million paying customers, but, around the world, you’d get 10 to 15 million regular daily hits on it, and that would be the most affluent, the most influential people in the world …And I think that could grow.”

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Murdoch believes a free advertising supported web site could attract advertisers willing to not only pay for 10 -15 million unique visitors monthly but the demographics of an affluent, well-educated readership. Dow Jones management would counter, however, that their advertising rates are already around quadruple what other sites get for similar readership because the audience is so directly affluent, but open the site up and a more generalized audience won’t be worth so much.

For comparison, nytimes.com, the most popular US newspaper site, now draws 13.1 million unique visitors and Yahoo Finance, the web’s largest financial site, has 16.8 unique visitors monthly. So to get to 10-15 million for a site that in perception is really a financial news site, means he must go really for a more global audience, which is in line with his statements he has made several times that he wants to improve upon the Journal’s presence abroad.

The Journal, in an article Tuesday, said that if Murdoch really was to make a success of a “free” WSJ.Com then forget the 10 – 15 million figure, and that it will need around 30 million -- and if that figure is right then even more reason why Murdoch will be wanting the site to be of truly global interest, because its audience would have to become truly global, too.

By pure coincidence, no doubt, on the very day that Murdoch spoke about his Journal web plans Dow Jones put out a news release bragging at how well its digital sites are doing. It said that The Wall Street Journal Digital Network had record traffic in August. The network, which includes WSJ.com, MarketWatch.com, Barron.com and AllThingD.com attracted nearly 17.9 million unique visitors between them, a 21% gain over the previous year. Page views were up 40%.

It bragged that WSJ.com increased unique visitors by 31% and page views by 22% with Presidential election coverage and technology-related news being the most popular. Marketwatch.com added 23% more unique visitors with 45% more page views and the newly redesigned Barrons.com increased unique visitors by 291% and page views by 181%.

Given the financial events of the past few days it must be music to Murdoch’s ears to hear Gordon McLeod, president of the digital network, say, “It’s not surprising that during times of market volatility, users turn even more to the most trusted, authoritative name in business and financial news.” The unanswered question, of course, is how many more would have turned to WSJ.Com if they had access to the whole site?

So, the battle lines are drawn but the betting is that Rupert Murdoch usually gets what Rupert Murdoch wants and he really went as far as he could Tuesday without letting the cat out of the bag when he said that a free site “looks like the way we are going.”

If Zannino and company are to persuade Murdoch otherwise they will have to answer the simple question, “Where’s the money?” And they have just about a couple of months more to come up with the answer.