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New York Times to end paid Internet service

By Robert MacMillan

NEW YORK (Reuters) - The New York Times Co said on Monday it will end its paid TimesSelect Web service and make most of its Web site available for free in the hopes of attracting more readers and higher advertising revenue.

TimesSelect will shut down on Wednesday, two years after the Times launched it, which charges subscribers $7.95 a month or $49.95 a year to read articles by columnists such as Maureen Dowd and Thomas Friedman.

The trademark orange "T's" marking premium articles will begin disappearing Tuesday night, said the Web site's Vice President and General Manager Vivian Schiller.

The move is an acknowledgment by The Times that making Web site visitors pay for content would not bring in as much money as making it available for free and supporting it with advertising.

"We now believe by opening up all our content and unleashing what will be millions and millions of new documents, combined with phenomenal growth, that that will create a revenue stream that will more than exceed the subscription revenue," Schiller said.

Figuring out how to increase online revenue is crucial to the Times and other U.S. newspaper publishers, which are struggling with a drop in advertising sales and paying subscribers as more readers move online.

"Of course, everything on the Web is free, so it's understandable why they would want to do that," said Alan Mutter a former editor at the San Francisco Chronicle and proprietor of a blog about the Internet and the news business called Reflections of a Newsosaur.

"The more page views you have, the more you can sell," he said. "In the immediate moment it's a perfectly good idea."

The longer-term problem for publishers like the Times is that they must find ways to present content online rather than just transferring stories and pictures from the newspaper.

Most U.S. news Web sites offer their contents for free, supporting themselves by selling advertising. One exception is The Wall Street Journal which runs a subscription-based Web site.

TimesSelect generated about $10 million in revenue a year. Schiller declined to project how much higher the online growth rate would be without charging visitors.

The company expects to record a "substantially increased number of unique users referred to and accessing the site" once TimesSelect disappears, it said in a statement.

TimesSelect includes online access to 23 news and opinion columnists as well as several tools to customize the Web site. It also offers access to the Times archives back to 1851.

Starting on Wednesday, access to the archives will be available for free back to 1987, and as well as stories before 1923, which are in the public domain, Schiller said.

Users can buy articles between 1923 and 1986 on their own or in 10-article packages, the company said. Some stories, such as film reviews, will be free, she said.

American Express will be the first sponsor of the opened areas on the site, and will have a "significant advertising presence" on the homepage and in the opinion and archives sections, the company said.

Schiller declined to say what the financial impact would be on the Times. No employees would lose their jobs, she said.

TimesSelect had about 227,000 paying subscribers as of August. People who receive the paper at home get access to it for free, as do students. In total, about 787,400 people have access to TimesSelect now, the company said.

The number of subscribers met the paper's expectations, Schiller said. "We consider TimesSelect very successful," she said.

Paying TimesSelect subscribers will receive a pro-rated refund on their credit cards, she added.