Dow Jones enters News Corp. fold By SETH SUTEL, AP Business Writer

Dow Jones enters News Corp. fold By SETH SUTEL, AP Business Writer
1 hour, 26 minutes ago



NEW YORK - Had it continued on its own, The Wall Street Journal would have faced a brutal slump in print advertising that is plaguing the newspaper industry as well as fierce competition in the market for delivering business news.

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Now that it's part of Rupert Murdoch's media empire, Journal publisher Dow Jones & Co. will have access to several things it would have had a tougher time finding alone: capital to invest in new digital distribution channels; ready access to multiple media platforms and more muscle to compete against rivals at home and abroad.

Many had opposed the deal, both within Dow Jones and outside. Numerous people posting on a discussion board on http://www.WSJ.com promised to cancel their subscriptions, and Leslie Hill, a member of Dow Jones' controlling shareholder group, the Bancroft family, quit the company's board in protest.

In her resignation letter, Hill said that while the "short term financial benefit is difficult to deny," she also believed that it was "not enough to outweigh the potential ramifications of the loss of an independent global news organization with unmatched credibility and integrity."

At the same time, senior Dow Jones executives acknowledged the tough road the company would have had to slog had it elected to remain a standalone entity and the new opportunities the company has for expansion under Murdoch.

Despite its tremendous clout in the business world, Dow Jones remains a relatively small company in a media landscape that is increasingly dominated by far larger companies, with just $1.8 billion in revenues last year.

Dow Jones CEO Richard Zannino told his staff in an all-points memo Wednesday that joining up with News Corp. meant greater opportunities to expand.

"With nearly $30 billion in annual revenue, News Corp. has the money — and the intention — to invest in our business on a scale we can't," Zannino said.

Even after paying the $5 billion for Dow Jones, Murdoch has said he plans to invest even more in building up the paper's Washington coverage at home — where it will compete even more fiercely with The New York Times for national readers and advertisers — as well as overseas, where it goes head-to-head with Pearson PLC's Financial Times.

The global reach of News Corp. will also help the Journal's news find new readers and advertisers in other media at home and abroad.

Murdoch is already planning to launch a business-themed cable news channel in the fall, but the opportunities for using the powerful Dow Jones and Wall Street Journal brand names go far beyond that.

Dow Jones is currently in an exclusive deal to share news and content with General Electric Co.'s CNBC cable news channel through 2012, but clearly Murdoch is already thinking well past that point, and is sure to try to end that contract early.

At home, news from the Journal as well as other Dow Jones properties including Dow Jones Newswires, the financial weekly Barron's, and SmartMoney magazine — co-owned with Hearst Corp. — could easily find new outlets for viewers and advertisers on a variety of properties in the News Corp. media family, including the Fox broadcast network or Fox News Channel.

Murdoch also is a major proponent of delivering news and entertainment online, as seen by his acquisition of social-networking site MySpace, which has already paid major financial rewards.

The Journal, for its part, has proved to be an adept player online itself, and has built the largest paying subscriber base of any U.S. newspaper, close to a million people.

Murdoch hasn't laid out specific plans for what changes he might make to Dow Jones' online strategy, but it's clearly going to be a key area of focus as the Journal continues to remake itself from delivering financial news on paper to a variety of electronic distribution methods, including the Internet, mobile devices and broadcast media such as television.

"We have done well as part of a modest-sized company to make the transition to the Digital Age," Journal publisher Gordon Crovitz wrote in a memo to his staff Wednesday. "... But as part of News Corp., we can grow faster and serve more readers and more advertisers."

Dow Jones' absorption by a larger company also comes as two of its rivals in delivering real-time financial news are combining.

Just days after the Bancroft family initially rejected Murdoch's offer in early May, word began to leak out that Thomson Corp. would buy Reuters Group PLC, both of whom rival Dow Jones Newswires in delivering financial news and information to investors.

Murdoch, who has kept a low profile during the three months since his campaign to acquire Dow Jones became public, declined to be interviewed about his latest acquisition.

But in brief remarks to Associated Press Television News early Wednesday as he entered News Corp.'s global headquarters in midtown Manhattan, Murdoch summed up the weeks of wrangling that preceded the final announcement to buy Dow Jones, which came in the wee hours of Wednesday morning: "It's done."