- Murdoch: Why News Corp. Isn't BFF With Amazon

Staci D. Kramer
Thursday, May 7, 2009; 10:07 AM

Updated: Why is News Corp (NYSE: NWS). interested in its own e-reader despite what seems to be a success so far for the Wall Street Journal with Kindle? News Corp. Chairman and CEO Rupert Murdoch put it simply in the earnings call: "We will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control our relationships with our customers. Any device maker or website which doesn't meet these basic criteria on content will not be doing business long-term with News Corporation." Take this one of two ways: News Corp. will keep pushing other possibilities until Amazon (NSDQ: AMZN) backs down on its controls (good luck with that) or News Corp. will opt for a device it either owns or at least controls and can use in a proprietary way.

(The perils of writing live about Murdoch. In further comments, he brushed off the idea of News Corp. investing in a device, saying the company may invest in something experimentally: "We're not appliance makers." A spokesperson later explained that the decision about how News Corp will handle this literally hasn't been made yet. My advice to a developer who wants that investment: promise client control over, well, everything.)

But in nearly the same breath, Murdoch bragged about 360,000 downloads of the free WSJ iPhone app over the past three weeks; that would be from the App Store operated by Apple (NSDQ: AAPL) with the same lack of control for News Corp. It's as contradictory as offering the content-rich app for free and complaining about how the online business model has to change. Then again, he promised that as soon as the technology is there, readers will be asked to pay "handsomely" for access. (It will be fascinating to see how many "free" readers pony up?and how much the WSJ charges.)

Murdoch pragmatism at work: working towards the way he wants it to be while getting the most out of current reality.

Photo Credit: Reuters

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