PaidContent’s Joseph Wiesenthal has found a research note from Bear Stearns analyst Spencer Wang which is bearish on the revenue prospects for a free WSJ.com, compared to the amount it currently generates in subscriptions.
Bloggers love to fisk Wall Street research notes, because it makes them feel superior. And in this case, doing so is pretty easy: Chris Anderson did a good job, and Mick Weinstein, the editor-in-chief of Seeking Alpha, made a rare appearance as a blogger in his own right to do an even better job. But anyone can do this: just look at Wang’s assumptions for a free WSJ.com ($6 CPM, 1.5 ad impressions per page, 50% sellthrough rate) and guffaw. None of them bear any relation to reality.
Everybody, too, notes the strategic aspect of making WSJ.com free: such an action can easily make all the sense in the world for Murdoch even if it does lose a small (by News Corp standards) amount of revenue in the short term. Anderson gives a good account of why WSJ.com wants to be free in New York; he doesn’t mention that such a strategy makes even more sense in countries like India, where no one is likely to pay for WSJ.com and where at the moment it’s incredibly difficult for advertisers to reach the most affluent members of society.
I’d only add that what most of these pundits consider to be unthinkable – that WSJ.com could get the same amount of traffic as Yahoo Finance – is, in fact, decidedly possible, if Murdoch invests in a truly great WSJ.com resdesign and is willing to break a few rules while doing so. (External links on the home page! Stories which are embeddable like YouTube clips! Paying blogs and other websites for sending traffic the WSJ’s way!)
Yahoo Finance is, at the moment, the best website for basic stock-market data and charting, and in turn that drives a lot of pageviews to the rest of the site. But Yahoo hasn’t been unbeatable in any of its other products, and a big investment in a free WSJ.com could give Yahoo some very serious competition.