Rupert Murdoch is threatening to pull his sites from Google’s search index when/if the sites have paywalls in place.
The digerati, meanwhile, are snickering that Murdoch is obviously senile because this would destroy his whole business.
With respect to the WSJ, for example, Hitwise estimated yesterday that the WSJ gets about 25% of its traffic from Google.
Our rough estimates suggest that this means WSJ.com depends on Google for about 10-15% of the site’s revenue. This is a meaningful amount, but it’s not an amount that couldn’t be foregone for a while if Murdoch wanted to try boycotting Google.
How do we get to 10%-15%?
First, the WSJ has subscription revenue, which we estimate to be in the neighbourhood of $50 million. This will be unaffected by the change.
Second, it seems reasonable to assume that readers who come in from Google produce fewer pageviews than readers who pay to subscribe to the paper. On a per-unique basis, therefore, Google searchers likely generate less ad revenue than loyal readers who go direct.
Third, the rest of the WSJ’s revenue, from ads, can be broken down into two parts:
- Ads shown to paying subs, which command higher prices
- Ads shown to drive-by readers, which command lower prices
Put all this together, and we suspect that the 25% of uniques who come from Google account for about 10%-15% of the WSJ.com’s traffic.
Would Murdoch really be willing to give that up just to thumb his nose at Google and hope that more folks will subscribe to the paper directly?
We doubt it.
But it also wouldn’t be crazy to experiment, especially temporarily.