As Murdoch Fusses, Google Vows to Limit Free News

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Wall Street Journal managing editor Robert Thomson recently claimed that leveling the pay walls at the WSJ online to make all of its content free would result in so much lost revenue that the paper would have to lay off up to 300 reporters. Such are the perils of funding a newspaper online.

So in ongoing efforts to find alternative sources of revenue, the WSJ's owner, News Corp chief Rupert Murdoch, recently threatened to block of the Journal's stories from Google and enter a unique contract with Microsoft that would give Bing exclusive rights to comb WSJ's content in exchange for an undisclosed payment. Now Google is reacting to the possibly-real, possibly-overblown threat by announcing that it will allow publishers of paid content "to limit the number of free articles accessed through its Internet search engine."


Here's why Murdoch should care about this move. Today, if I got to the Wall Street Journal homepage, I can only read the first two paragraphs of selected "paid" articles. But there's a loophole. If I copy the headline and copy into the Google search bar, I can read the full story. But Google plans to change that:

In an official blog posted late Tuesday, Josh Cohen, Google's senior business product manager, said the company had updated its so-called First Click Free program so publishers can limit users to viewing no more than five articles a day without registering or subscribing.

This is a clever move on Google's part, but I agree with the Times' David Gallagher that it's unlikely to change the terms of the debate because it doesn't change the central struggle that is online advertising. Publishers are used to conflating audience and revenue. (Print circulation is up? Fantastic.) But online the equation breaks down, especially for big organizations like the Times and the Journal, because the CPMs are nothing like full page print advertisements. If you're a big reporting empire like the WSJ, online ad rates aren't enough to fund the things you're designed to do. That's why I'm not as quick as Arianna Huffington and others to dismiss Murdoch's search engine play.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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