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Rupert Murdoch Is Four Times Smart

If Rupert Murdoch has his way -- and as the chairman of News Corp. (NYSE: NWS  ) , he generally does -- there will be no more $100 annual subscriptions to the Wall Street Journal's online edition. Most of the Journal's competitors have made this move -- heck, even the New York Times' (NYSE: NYT  ) online edition dropped subscriptions recently. While my Foolish colleague Rich Smith thinks Rupert Murdoch's latest move is four times stupid, I say, let Internet freedom ring!

Many saw this move coming after News Corp. agreed to purchase Dow Jones (NYSE: DJ  ) for $5.6 billion, a 67% premium. By freeing the site, the trusted financial news source will attract more readers. How many more? If you believe Murdoch, 15 times more. He believes his 1 million online subscribers can be enlarged to as many as 15 million readers by ditching the cash register. And with more readers come more advertising dollars, especially if they turn out to be, in Murdoch's words, "the most affluent, the most influential people in the world."

But, you say, what about the $100 standard annual rate each of the current 1 million subscribers pay? True, that's about $100 million in lost revenue for advertising to make up, not to mention any additional lost print subscriptions. Pretty big risk, isn't it? Not really. News Corp. generated almost $30 billion in revenue last year with its large assortment of media properties. Even if it had to offset $200 million by dropping online subscriptions (to account for possible lost print subscriptions), that's still less than 1% of the company's total revenue.

And the upside is huge. News Corp. is forecasting 45 million subscribers for its new Fox Business Network next year. I hate to use the word "synergy," but it's not hard to see how complementary The Wall Street Journal and the Fox Business Network will be, once they're fully integrated and sans pesky subscription walls. The possibilities make $200 million seem downright petty, if you ask this Fool.

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