Regarding A Free Wall Street Journal Online

Paid Content’s Joseph Weisenthal beats me (by a lot) to blogging thoughtfully about Bear Stearns analyst Spencer Wang’s number-crunching regarding what might happen should News Corp. ditch’s subscription model and make the site free.

Wang came down very hard against the idea that a free may result in a big financial upside for News Corp—quite the opposite, in fact:

Turning into a free site would require a 12x increase in traffic growth to offset the lost revenue, according to a new report from Bear Stearns analyst Spencer Wang. revenue is currently pegged at $78 million annually, based on an estimated 989,000 subscribers paying $79/year. Including non-subscriber traffic, the company claims 122.4 million monthly page views. Based on an estimated CPM of $6 and a few other assumptions about sell-through rate and ad impressions per page, Wang arrives at the 12x conclusion.

To put this in a proper perspective, per Weisenthal:

If only grew to the average of its peers (, CNN Money, MarketWatch and Yahoo (NSDQ: YHOO) Finance), the site would only be about halfway to the 12x goal.

To really see direct revenue growth from going free, it would require the site grow as big as Yahoo Finance itself. (Emphasis added.)

This, of course, assumes that Wang’s CPM estimate is right. (Commenters on Weisenthal’s post dispute this—are they correct? Please post a comment below if you’ve any notion on this point.) And, as Weisenthal points out, it also assumes that News Corp. has a purely financial reason for doing what they do.

News Corp. likely doesn't. If Murdoch loves his newspapers for their influence, you get a much bigger bang on that front by tearing down the tollgates.

More importantly . . .how do I put this? Let me start by contradicting something I just wrote about: I have an upcoming column in which I touch on how Web traffic, at least in the US, is no longer an infinitely expanding universe. If this is the case, the reverberations from this new-ish reality will have many interesting effects on the online media landscape.

That said, I think something like has a lot of untapped growth potential, for both traffic and especially video, and will for a long time. (The international implications of being the financial news source of record makes that potential greater still.) And that even a that no longer shows massive traffic spikes, but rather lots of dependable and high-quality traffic, will loom large as an especially prized advertising outlet—maybe even larger, owing to who reads it and the loyalty its online site should generate.

But perhaps I’m all wet. Your thoughts?

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