Hearst 2.0: The Battle for Content Rages Continues

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Knowing that ads without content don't amount to much, Murdoch has always been quick to snap up content producers, ranging from a near obsession with newspapers (The New York Post, The Chicago Sun-Times and the London Times, to name a few) to TV and film entities. But it was his recent $5 billion bid for The Dow Jones, the parent of The Wall Street Journal, that caused a stir.

While the Bancroft family rejected the offer (and doesn't appear to have changed their position), media pundits have been quick to decry what they see as the "foxification" of a heretofore high-minded conservative media outlet. (Slate published a feature titled "Eight Reasons to Distrust Murdoch," only to follow up the piece with eight more reasons.) But others, namely Ross Sorkin of The New York Times, and BusinessWeek columnist Jon Fine have said Murdoch would be a boon for the WSJ.

Although much of the attention has been focused on what the now unlikely pairing might mean for the WSJ, the larger question of what Murdoch wants with another newspaper continues to loom.

Some have speculated the WSJ would help Murdoch establish a Fox business (and it likely would). While others have theorized that the WSJ could become a portal for a digital financial and business empire. But perhaps Murdoch sees in the WSJ another diamond in the rough, not unlike what he saw in MySpace a few years to back.

To be sure, there were (and are) other social networking sites; Murdoch could have set his sites on Friendster, for example. But as it turned out, MySpace was the right bet, and perhaps that was because the philosophy of the site was precisely in tune with its users who can (and do) improve and reinvent the site on a constant basis.

Although one can't exactly call the WSJ a Web 2.0 property, there might be a valuable lesson Murdoch wants to learn from the site that he can't learn from any other newspaper that has transitioned into the digital age: How to make money and keep the subscription model alive.

In a Fox News Channel interview, Murdoch said he liked the idea of business news online, "because you can charge for it." However, Fortune Magazine senior editor David Kirkpatrick, who praised Murdoch for his vision with the Dow Jones bid, called the subscription model online a "deal with the devil."

"Information online is a world of links -- a collective dialogue among numerous sources and speakers," Kirkpatrick wrote. "When you close off a news site with a wall that is only crossed when a reader pays, you remove its content from that collective dialogue. Over the past few years, it has seemed to me that the relative weight and importance of the Journal's editorial content has diminished as other voices -- both institutional and individual -- have emerged online. WSJ.com has not been part of the freewheeling interactive conversation of the web."

According to Kirkpatrick, the big play for Murdoch, or whoever ends up owning the WSJ, is advertising.

"WSJ.com can't fully participate in the big money play online, advertising revenue, because it deliberately limits traffic to its site with its subscription model," Kirkpatrick wrote. "It gives up a potentially very large monetizable audience by hiding behind a pay wall. Granted, people will pay for news that helps them make money. But while it's possible to envision a global Journal-branded news site of almost MySpace scale, it's a mistake to imagine that very many people will pay for it."

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