Advertising and the business model of the Web
Press baron Rupert Murdoch, the new owner of Dow Jones, has announced that he will be making the online Wall Street Journal free, according to a story in the New York Times. This is a very interesting development from the standpoint of business models for Web sites. There has been some debate about whether the best way to make money from a Web site is with subscriber fees plus advertising or free access with advertising. The Wall Street Journal site has been the very model of a successful subscription site, having recently reached a million paying customers.
However, it is Murdoch’s judgment that a free site will attract enough additional readers to make the increased advertising income more than sufficient to make up for the lost subscription fees. So we have yet another indication of how important advertising has become in shaping what the Web is like and what technology companies do. Google has led the way in monetizing the Web by selling advertising and, as I posted earlier, even Microsoft looks like it wishes it could be an advertising agency.
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