[by Andrew Clark] If you go by the numbers, a slim Australian with a sharp tongue and a penchant for ultra-skinny ties has become the most powerful newspaper editor in America. The Wall Street Journal has claimed top spot in circulation rankings and its boss seems intent on marshalling a print industry war against online “thievery”.

A loyal lieutenant and friend of Rupert Murdoch, the WSJ’s Robert Thomson rarely minces his words. A former editor of the Times, he dismissed the Guardian as a paper catering for a north London ghetto, and on arrival at the WSJ he upset veteran writers by saying that certain elaborately researched stories seemed to have the “gestation of a llama”.

He was at it again last week with a full-throated assault on the internet powerhouse Google (NSDQ: GOOG). At a Silicon Valley conference, Thomson startled a gathering of technology chiefs by accusing Google’s search chief, Marissa Mayer, of being an unwitting online pimp: “Marissa unintentionally encourages promiscuity.”

He attacked Google’s news search function for showing the sources of news articles in “tiny” fonts and aggregating quotes from newspapers with little prominence to their publishers. He continued: “The whole Google model is based on digital disloyalty. It’s about disloyalty to creators.”

The WSJ editor is fast becoming News Corporation’s attack dog in a campaign to re-engineer the news publishing industry’s failing business model. News Corp has lost patience with giving away journalism on the internet: Murdoch wants to erect pay walls, charging readers for access to all of his websites, ranging from the Times and the Sun to the New York Post and the Australian.

News Corp views search engines and online “aggregators”, such as the Huffington Post or the Drudge Report, as the biggest source of leakage of its costly, carefully tailored content. At a recent media summit in Beijing, Murdoch described them as “plagiarists” and “content kleptomaniacs”. This year, Thomson blasted them as “parasites”.

The relationship between search engines and newspapers is subtle. Sites such as Google News drive a phenomenal amount of traffic to newspaper stories. But publishers complain that these visitors are of little value; they mostly go directly to a single article, read it, and exit without visiting a newspaper’s home page or seeing much advertising.

In an e-mail to the Observer, the Huffington Post’s founder, Arianna Huffington, characterised News Corp.‘s attacks as a throwback to a bygone era and scoffed at Thomson’s assault on Google: “While promiscuity is not good in relationships, it’s great for those looking for news and information. Trying to deny news consumers as wide a range of options and viewpoints as possible seems shortsighted and ultimately self-defeating.

“This is a golden age for news consumers who can surf the net, use search engines, access the best stories from around the world, and comment, interact and form communities.”

Variety, however, is not proving to be lucrative. In the eyes of News Corp (NYSE: NWS). the paltry online advertising revenue generated by flighty visitors from search engines is simply inadequate to pay for the research, travel, staff costs and overheads that go into journalism. Murdoch believes net readers should, and will, pay to read news, and views the WSJ as a shining example of success in online charging. A subscription to its online offering costs $103 (£62) a year. The paper had 407,000 web subscribers in the six months to September which, combined with its 1.6m print sales, meant a total daily circulation of 2.02m.

Figures last week from the Audit Bureau of Circulations revealed that, for the first time, the WSJ’s combined print and digital sales surpassed America’s long-time best-selling USA Today.

But not everyone believes that the WSJ’s success can be replicated elsewhere. “The reason the Journal’s always been able to use a pay wall is that its economic model is very different from other newspapers,” says Tom Rosenstiel, director of the Pew research centre’s project for excellence in journalism. “Many of its readers pay for it out of business expenses, not out of their own funds.”

Many experts also have reservations about the WSJ under Thomson’s stewardship. Adopting a Fleet Street approach, he has reined in lengthier reads in favour of snappier reports and has ramped up mainstream news content – Afghanistan and Iraq frequently feature alongside stocks and bonds on page one. A recent incident, when a quote from the right-wing shock jock Rush Limbaugh was inserted at an editing stage into a report on Edward Kennedy’s funeral, prompted concern about conservative ideology leaking from comment into news. One US blog, The Big Money, even grumbled about British vernacular creeping in – one WSJ story talked about fashion designers “coming a cropper” in the recession, an incomprehensible phrase to many Americans.

Industry experts say the paper’s readership gains come at a cost. It has spent heavily on marketing and has offered cheap deals on print subscriptions. There are signs, albeit small, of editorial cutbacks; last week, the paper said it was shutting its Boston bureau.

“Discounting and sales pressure have clearly contributed to this circulation gain,” says Ken Doctor, a publishing analyst at California-based consultancy Outsell, who says that papers sometimes spend as much as $50 to $80 in marketing to “buy” a single new subscriber.

Critics smell hypocrisy in Thomson’s bashing of search engines. The WSJ’s pay wall is “leaky” and specifically allows visitors who arrive through sites such as Google to view articles without paying. Like any other publisher, the paper could easily, if it chose, remove itself from Google’s universe.

“If the WSJ didn’t want any of its stories in any way visible on Google, all it would need to do is write a little bit of code into its pages and they wouldn’t be found by web crawlers,” says Jack Shafer, media critic at the online news magazine Slate.

Shafer argues that Murdoch is hardly a moral arbiter of fair compensation for journalistic output, given his willingness to start price wars on Fleet Street against weaker rivals: “It’s quite funny that Murdoch talks about not paying for journalism cheapening it, when he was responsible for driving the price down of all newspapers in the UK.”

A “pay wall” to a website can mean a host of things. Murdoch might opt for a membership model of charging for premium parts of news sites or levy fees after a certain number of page views.

Some in the industry, including Guardian Media Group, which owns the Observer, are adamant they will remain free, which will pose a huge competitive threat to rivals who levy a fee. Others argue that the real money to be made in digital media will come from mobile applications or handheld readers, still at a very early stage.

“Newspapers should have charged when they started websites because they were unique offerings,” says Edward Atorino, a publishing analyst at Benchmark, a Wall Street stockbroker. “But they didn’t. And I don’t know how you get people back to that now when there’s a plethora of alternatives. It’s going to be a very tough battle.”