Rupert Murdoch Is Four Times Stupid

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This time, it's officially official.

Last month, in an article called "Rupert Murdoch Is Thrice Stupid," I argued that News Corp. (NYSE: NWS) head Rupert Murdoch's long-rumored decision to make WSJ.com free of charge was, shall we say, ill-considered. (One irate reader criticized my use of the "S" word in reference to Mr. Murdoch. Imagine -- criticized for using an over-the-top headline to describe the father of yellow journalism -- the irony is too rich. But I digress.)

At the time, all we had to confirm the news was a short item in The Washington Post. Hence, I described WSJ.com's newfound "free"-dom as being "(semi-)official." But this time, it's for real.

According to CNBC, WSJ.com will indeed follow in the footsteps of The New York Times (NYSE: NYT) and Pearson's (NYSE: PSO) Financial Times. Murdoch announced at a meeting of News Corp. shareholders Tuesday: "We ... expect to make [WSJ.com] free, and instead of having 1 million [subscribers], having at least 10 [million to] 15 million in every corner of the earth."

Verbosity is not a virtue
I won't go into great detail here repeating my arguments against the wisdom of Murdoch's decision to join the online journalism free-for-all. Basically, they boil down to:

• Brand: People believe that "you get what you pay for." By removing the price tag that tells people what WSJ.com's value is, Murdoch will devalue the brand.
• Synergy: Charging for both WSJ.com and The Wall Street Journal proper allowed News Corp. to offer two-for-one pricing deals, using one medium to help sell the other. Making WSJ.com free continues the two-for-one tradition -- except that now, it's going to be "two-for-free," as the Journal's paying subscribers migrate to the free website.
• Timing: Google (Nasdaq: GOOG), ValueClick (Nasdaq: VCLK), and Time Warner's (NYSE: TWX) AOL had it pretty good for a while, capitalizing on a bull market for online advertising. But as fellow Fool Rick Munarriz recently pointed out, the "surge in ad revenue" that AOL has been chasing is proving elusive of late. This market may have peaked already.

On that last point, I want to add one last observation. At the shareholders' meeting, Murdoch warned that although the subprime mortgage crisis has not yet hurt advertising revenue at News Corp., "you are going to see quite a few more shocks, particularly in Europe, and they are going to spread around the world." So explain to me -- why exactly is now the right time to eschew predictable, recurring subscription revenue in favor of advertising revenue that's about to get "shocked"?

Maybe "stupid" is too strong a word to describe this plan, but "smart" doesn't quite work, either.