An article in The Guardian newspaper claims that Rupert Murdoch’s online version of the Times is losing “almost 90% of [its] online readership”. Transposing business models of print media into online deserves an unrighteous kick in the pants

In general, websites are support mechanisms for bricks-and-mortar companies and the attempt to elevate and transpose these business models to online, as many have argued in the past, is ignorant and bordering on the insane.

Does Murdoch not realise that the newsstand of the new media model is Google; and why has he thought it wise to remove all his publications from it? In addition, the media industry has not seen fit to take account of a report by Peter Horrocks of the BBC that news corporations need to specialise. What is the point of putting your news behind a paywall when your competition is reporting the same news that doesn’t?

Google, Twitter and Facebook demand that online dissemination is open and searchable. Murdoch knows better, he thinks, even though it has been reported that he only recently learned how to use email. And where on earth do online news, that is openly copied on to other sites and blogs, resolve into bottom-line economics?

John Gapper of the FT argues that Erich Schmidt’s remarks at the Google Zeitgeist conference on how the company is trying to work with news groups, including Rupert Murdoch’s News Corp on new revenue models, is that “Google itself is agnostic”.

“Its attitude contrasts to the tendency of those such as Alan Rusbridger of The Guardian and Jeff Jarvis to equate innovation in online news with not charging. As Mr Jarvis wrote of Mr Murdoch’s “pathetic” web strategy, under which The Times and The Sunday Times will charge for online: By building his paywall around Times Newspapers, he has said that he has no new ideas to build advertising. He has no new ideas to build deeper and more valuable relationships with readers and will send them away if they do not pay. Even he has no new ideas to find the efficiencies the internet can bring in content creation, marketing, and delivery.”

At the Fortune Brainstorm Tech conference last week, News Corp. Chief Digital Officer Jon Miller talked about the company’s efforts to put “paywalls” on more of its content. However, he did acknowledge that you do lose unique users when you put up a paywall, but mostly it’s people who were only reading a single story or video. He said advertising was holding up quite well.

Really, well the Guardian doesn’t seem to think so. “Based on the last available ABCe data for Times Online readership (from February 2010), which showed that it had 1.2 million daily unique users, and Hitwise’s figures showing it had 15% of UK online newspaper traffic, that means a total of 332,800 daily users trying to visit the Times site.

“If none of the people visiting the site have already registered, the one-on-four dropout rate means that traffic actually going from the registration site to the Times site is just 84,800, or 1.06% of total UK newspaper traffic – a 93% fall compared with May.”

According to his biographer Michael Wolff of Vanity Fair, “Murdoch has not used the internet, let alone Google (he only recently discovered email) and so he cannot possibly understand the dynamics, demands and opportunities of our post-industrial, now-digital media economy. I use the internet and teach it and write about it and I still can’t grasp the complete implication of the change. I don’t think even Google can.” That’s maybe because they’re agnostics. But I don’t believe that either as the “content-is-king” cliché is a defining feature of Google’s ethos.

And Jeff Jarvis, of the Guardian, chimed in with: “The hard truth is that news organisations will shrink or die. No longer monopolies or oligopolies, the barrier to entry to their kingdom and business reduced to an inch, they simply cannot maintain their old scale, the size and margins that the City demanded. A new ecosystem of news, made up of countless smaller players operating under varying means, motives and business models, will undercut the big, old institutions. The hard iron that once was their advantage – the presses and trucks – have now become a killing weight around their craggy necks.

“Murdoch is a stranger in a strange land. All he has left to do is build a wall around himself and shrink away, a vestige of his old, bold self. Who would have thought that we’d end up feeling pity for the man? It’s almost enough to make me want to throw him a few quid. On second thoughts…”

As witness to the futility model, Murdoch has just butted out of the newsstand on organics and has now turned to Google AdWords on searches such as “London Newspaper” with: thetimes.co.uk/Subscribe. Trial the first 30 days for £1, and experience exclusive online content.” But the Times doesn’t exclusively report on London. Are we stupid enough to pay him for it when The Evening Standard is free, and does?

Maybe it’s a little but like the music industry, where bands these days make CDs for roadshows but receive scant revenue from them. The focus of the new business model here is to sell everything else but.

Mashable, I thought, might have a take on it and I looked for a survey on the subject. The data was taken from a survey of 27,000 consumers across 52 countries: “…Nielsen also found that nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost. In other words, unless your organisation breaks lots of exclusive and important stories, charging for content will be a major uphill battle.”

The question is whether the Times is that exclusive, or is it just the case of an imprudent, anachronistic business model that relies on the vagaries of an old man?

Google said it was “very pleased” that the Chinese government has renewed its ICP licence, thereby resolving a six-month stand-off. Had it not done so, it would not have had the platform to develop and market Android on the mainland.

Google’s ICP licence now runs to 2012, subject to annual renewals. On the strength of this agreement, Google rose in Nasdaq trading as the company avoided being expelled from the world’s largest internet market. “We look forward to continuing to provide web search and local products to our users in China,” the company said on its blog last Friday.

Google’s stance has been rigid since January this year, when it announced it was no longer willing to censor results on Google.cn. The company previously announced: “We currently automatically redirect everyone using Google.cn to Google.com.hk, our Hong Kong search engine. This redirect, which offers unfiltered search in simplified Chinese, has been working well for our users and for Google.”

Now, they have changed their tune and this time it not solely because of its entry into China’s search market. This time its decisions seem more to be based on the mobile market. As Credit Suisse analyst Wallace Cheung said, he expected Android to become the most popular mobile operating system in China, beating out Apple’s popular iPhone. From evidence uncovered by Reuters, it seems mobile was its key motivation in its mission statement reversal.

While Google has struggled to build market share in online search in China, its Android device has a real opportunity to capture a significant share of the mobile market. According to a report by Chinaknowledge, there are an estimated 786.5 million mobile users in the country, and the first quarter of 2010 saw 39.12 million new mobile phone users delivered.

Google’s statement goes some way in explaining the decision: “…It is clear from conversations we have had with Chinese government officials that they find the redirect unacceptable — and that if we continue redirecting users our Internet Content Provider license will not be renewed (it’s up for renewal on June 30). Without an ICP license, we can’t operate a commercial website like Google.cn — so Google would effectively go dark in China.”

The dispute began in January this year, when Google said it was no longer willing to comply with Chinese regulations to self-censor content. But the strategic importance Google places on its involvement in China — from the candlelight vigils outside of its headquarters to the sheer number of users in China — Google is deemed important enough to the Chinese people that the government went back to the negotiating table.

Google chief executive Eric Schmidt said last Thursday that he expected China to renew the company’s revised application to deliver web services in the country after defying the government in March by ending self-censorship of the Chinese search engine and redirecting users to their Hong Kong site.

Following the announcement, Reuters chimed in with: “Google’s current search business in China accounts for a tiny slice of its $24 billion in annual revenue, with analysts putting its annual China revenue at $300-$400 million. But the long-term growth prospects are key. For one, Google is keen to provide non-search functions on the Google.cn site, such as music search and text translation.”

As China is the world’s largest internet market with nearly 400 million users, the potential is huge. But with an internet penetration rate of 25 percent, China’s online sector is still developing, compared to Japan and South Korea that have penetration rates between 70 to 80 percent.

But it wasn’t just a story about corporate intransigence, cyber attacks on the company’s infrastructure and the data mining of Gmail accounts of China-based activists, together with the attempts to further impede free speech on the web, that led Google to conclude that they would have to review the feasibility of their business operations in China.

A veteran former telecom engineer and analyst, Ed Snyder, argues that the momentum belongs to Google’s Android system, suggesting that music is the application that could provide Google’s open-source Android OS the chance to leap over Apple. He also predicts that the next-generation music platform, which is likely to be cloud-based, will be the major battlefield in the smartphone war.

Google recently revealed that it is activating about 160,000 Android devices a day — more than 14 million a quarter. This statistic demonstrates Android’s power to attract users. And with Apple’s reluctance to upgrade iTunes to a radically different concept, there is a golden opportunity for Google to undercut Apple, offering free premium features to users, like streaming services.

The license renewal allows Google to continue to operate Google.cn in the mainland market, in which the search engine can offer up products and services that do not require censorship, as well as continue to sell advertising on the site in a country with some 400 million Internet users.

It also removes a cloud over other Google business interests, in particular the licensing of its Android mobile phone operating system that in the future could be a strong source of advertising revenue in a nation of nearly 800 million mobile phone subscribers.