Information on WSJ shall be free, says Rupert Murdoch

News Corp. chairman Rupert Murdoch said yesterday that he intends to make access to The Wall Street Journal's website free, dropping subscription fees in exchange for anticipated ad revenue, according to this report from the Associated Press.

The proposal by the Wall Street Journal follows similar moves by other top newspapers including The New York Times which made its paid content called Times Select free to all online readers.

All these publications seem to have got the message that as readers move online, they are going to be less willing to pay money for reading news, if only because the news choices are so many on the Web. The option for these newspapers is to add more readers by offering content free, and look to advertising to make up for subscription income.

But newspapers like WSJ will have to strike a balance between appealing to a broad audience while retaining their current focused readers. Too much advertising on a site can also put off readers.

Online advertising will also have to progressively replace revenue from print editions, as it is expected that more readers will move online. That and growing competition from non-traditional online media are big challenges for the newspaper industry.

Data available from the Newspaper Association of America (NAA) in Arlington, Virginia suggests that advertising in print is on the decline. Spending for print ads in newspapers in the second quarter of this year totaled US$10.5 billion, down 10.2 percent from the same period a year earlier, according to a NAA release in August.

However whatever advertising is moving away from print editions of newspapers is not necessarily going to their online sites.

Advertising expenditures for newspaper Web sites increased by 19.3 percent to US$796 million in the second quarter versus the same period a year ago, according to preliminary estimates from the NAA.

This sounds great in isolation. But the newspapers that saw a decline of about US$1 billion in advertising in the second quarter, witnessed an increase of less than $200 million in advertising from its online properties.

As a result, total advertising expenditures at newspaper companies were $11.3 billion for the second quarter of 2007, an 8.6 percent decrease from the same period a year earlier, according to NAA.

The NAA puts down the reduced advertising revenue for newspapers to cyclical swings in the U.S. economy, as well as structural changes in the businesses of major advertisers, which continue to affect print advertising revenue.

In the long-term, online sites like YouTube, and news and opinion sites, set up by former journalists and also by experts on specific topics, could compete for eyeballs and advertising revenue with traditional newspaper web sites. Some of the new media sites have built strong online reputations and brands that down the line could be as strong as that of online editions of mainline newspapers.

Online social networking as theater

Nothing serious actually gets discussed on social networking sites like Facebook and Orkut. The way these sites have shaped out, nay their new raison d’être, is about making members look good to their friends and peers on the site. It is less about spontaneity and more about theatre.

Sometimes what people want to show off about on social networking sites actually reflect a breakdown in social values. The Daily Mail reports that “drunkenly dancing on tables or collapsing in the street used to be a source of acute embarrassment for young women the morning after the night before. Today, they are more likely to boast about it - to the world, with pictures - on social networking sites”

The sad part of this all is that substituting Internet communities for real-life communities, drinking till you are silly, and other mad-cap behavior could in fact be reflections of a far more serious problem in society.

They could be reflecting the loneliness people feel today as traditional communities and real communication break down. People may be trying to replace real communities and long-term bonds with ephemeral communities that present less risks of failure, but at the same time a smaller chance of real strong bonds.

More than 150,000 girls have signed up to Facebook's online forum "30 Reasons Girls Should Call It A Night", where they openly discuss the various states of inebriation - and undress - they have found themselves in, according to the report in the Daily Mail.

Not only do girls discuss their inebriation, but have unabashedly put up their snaps in various states of drunkenness and undress on the forum.

If social networking in the physical world is about the sharing of common themes and ideas, bouncing out of new and unusual ideas, and generally trying to build community, social networking is surely and quickly emerging more as a well-choreographed spectacle, than as a genuine and spontaneous forum for social interaction. See more on this in my earlier blog titled “Orkut as theatre”.

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Google’s power is exaggerated

In the old days, if you wanted to research a topic, or if you wanted to find out if a medicine is good for your kid, or if you wanted to buy a music system, you had to hop various locations ranging from a visit to the library, to a visit to the drug store for a long chat with a knowledgeable person there, to a visit to the local electronics store.

Along came Google Search and changed all that. I can research a topic, find out all the information available on a medicine, and comparison shop a music system, if I use Google. I need to have a lot of patience, as most of the results thrown up by Google Search are totally irrelevant to my immediate needs.

However intelligent Google may have made search, it is still only an algorithm fetching information from a whole variety of sources, based on the keywords I have typed.

With Google having the dominant share for search, it gives Google enormous power on how information, including commercial information, flows to the user. That is one of the reasons publishing houses are increasingly seeing Google as a competitor for advertising revenue. Rather than pay an online newspaper for an advertisement of their latest laptop, a vendor may be better off bidding for keywords that would ensure that their advertisement shows up whenever somebody does a search for “laptop”.

Does this mean that Google will be the ultimate arbiter of what a consumer buys ? I think that would be exaggerating Google’s role as a search engine. When I am searching the net using Google, all that Google throws up is a lot of text and links containing my keywords. Google Search cannot provide context. More importantly it cannot provide guidance.

Even as Google throws open the web to users looking for information, it also floods you with irrelevant information. What that means is that increasingly people will need gatekeepers who will sift the good stuff from the not-so-good, and the lousy.

Recognizing this opportunity there are a number of web sites and blogs that position themselves as buyer guides to everything from cameras to music systems, to automobiles to gardening gear. Not unexpectedly these sites have ads placed by Google on them, as well as ads from vendors.

So humongous is the web today, that we now need a new super-set of gatekeeper sites that will guide us through these various comparison shopping and peer review web-sites. How do I know whether a site is recommending a laptop from a particular brand, because that brand has long –term advertising contracts with the web site ? What do I know about the integrity or for that matter the maturity and qualifications of the reviewers ?

In the final analysis, it will be the well-known brands that will provide us our guide-posts. For laptops, for example, we are more likely to go to sites like Cnet.com or PCWorld.com to make an informed choice.

Google Search, and those sponsored links Google puts on top and on the right hand side every time you search for a term, may however be relevant when folks are buying a product they already know well, a product with either a known brand or well-known specifications. Then people are only looking for the online vendor that can provide the product quickly and conveniently. If people are looking for anything more sophisticated than that, they will look for gatekeepers and editors to counsel and guide, a role Google Search is ill-equipped to play.

Google can also ill-afford to be partial on search results whether in general search or in news. If I am looking for the latest news on Iraq, and I can’t get it from some of the better known and popular newspapers after I do a Google search, I will head straight to their web sites. If I search for laptops, and the key vendors or the key buyer guides I know are not listed, again I will look at Google as unreliable, and head for the web sites of the vendors I know.

If Google wants to make money on search it has to continue giving reliable results, and not play gatekeeper. Google knows that is not its role.

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Advertising in print newspapers on the decline

As more people go online, and news is available for free for multiple sources, will it be a matter of time before print newspapers go the way of the dinosaur ? Will newer sources of news, including blogs, replace the online editions of traditional newspapers ?

Advertisers seem to think so.

Data available from the Newspaper Association of America (NAA) in Arlington, Virginia suggests that advertising in print is on the decline. Spending for print ads in newspapers in the second quarter of this year totaled US$10.5 billion, down 10.2 percent from the same period a year earlier, according to the NAA.

This data seems to bear out the forecasts by many pundits that as print gets less popular, advertising dollars will move away from print editions. But it hardly provides conclusive evidence that print newspapers are dying. It could be just that some advertising is moving to other newer opportunities, including online. It may be just the same as when TV advertising started cutting into newspaper advertising decades ago.

However whatever advertising is moving away from print editions of newspapers is not necessarily going to their online sites.

Advertising expenditures for newspaper Web sites increased by 19.3 percent to US$796 million in the second quarter versus the same period a year ago, according to preliminary estimates from the NAA.

This sounds great in isolation. But the newspapers that saw a decline of about US$1 billion in advertising in the second quarter, witnessed an increase of less than $200 million in advertising from its online properties.

As a result, total advertising expenditures at newspaper companies were $11.3 billion for the second quarter of 2007, an 8.6 percent decrease from the same period a year earlier, according to NAA.

The NAA puts down the reduced advertising revenue for newspapers to cyclical swings in the U.S. economy, as well as structural changes in the businesses of major advertisers, which continue to affect print advertising revenue.

NAA is a nonprofit organization representing the newspaper industry and more than 2,000 newspapers in the U.S. and Canada.

Online editions of established newspapers appear to have established their popularity, perhaps because of their strong brands as print newspapers. More than 59 million people (37.3 percent of all active Internet users) visited newspaper web sites on average during the second quarter of 2007, a record number that represents a 7.7 percent increase over the same period a year ago, according to custom analysis provided by Nielsen//NetRatings for the NAA.

As print newspaper move online, they are going to need to learn a new bag of tricks, including embedding video, and offering podcasts from their sites. These technologies would require a totally different set of skills than are what are currently found in traditional print newspapers. All of a sudden reporters, whose faces we rarely saw, and whose voices were never heard, are going to have to metamorphose into sleekly dressed and groomed TV reporters.

Already as print advertising looks shaky going forward, and reader’s preferences shift, a number of publications, including IDG’s Infoworld, have moved online.

A caveat about the NAA data. It is primarily about newspapers in North America. Print newspapers are far from declining in a number of markets, including India, where there has been a sudden rush of new print publications. Established publishing companies, and start-ups have also set up online news sites.

In India, for example, the current transformation appears to be less about the transition by users from print to online reading, and more about more readers getting into the mainstream. As long as Internet usage is limited to urban elites, and is cheaper than buying a print publication, the outlook is very positive for print, analysts say.

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