Murdoch bites back / Internet in market failure

The net is in market failure. Could you believe that?

The efforts of the status-quo in Wall Street are trying to turn the internet into a (more efficient) cash machine. They have plans to eliminate or signficantly reduce free online content in a move that will definitely change internet. Or at least thats what they will try to do...

Media tycoon Rupert Murdoch expects News Corporation-owned newspaper Web sites to start charging users for access within a year in a move he says could radically shake-up the culture of freely available content.

Murdoch said the existing Internet business model was "malfunctioning."

Speaking on a conference call as News Corporation announced a 47 percent slide in quarterly profits to $755 million, Murdoch said the current free access business model favored by most content providers was flawed.

"We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning," the News Corp. Chairman and CEO said.

"We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximises revenues in return for our shareholders... The current days of the Internet will soon be over."

Murdoch said the experience of the News Corp.-owned Wall Street Journal had proved that charging for content could be made to work. Would you pay to use news Web sites? Sound Off below

He said 360,000 people had downloaded an iPhone WSJ application in three weeks and said users would soon be made to pay "handsomely" for accessing WSJ content.

Murdoch said he envisaged News Corporation titles introducing charges within 12 months.

Now the real issue will be if Rupert Murdoch will go after Google and Youtube and charge them for the free online content. This will obviously create a hurricane of legal fees in major IP law firms in London and New York. Covington & Burling, White and Case and the likes...