Behind Murdoch's Journal Bid
Buying the Wall Street Journal would allow Rupert Murdoch to establish a Web business presence.
(By Richard Drew -- Associated Press)
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Friday, May 4, 2007
Tabloid king Rupert Murdoch's bold bid to take over Dow Jones & Co. and grab the Wall Street Journal is Topic A in the media world this week. You have burning questions! We have answers to shock and amaze!
Q Why now?
A The timing is right -- if not for Dow Jones, then for Murdoch. Conventional wisdom says Dow Jones is vulnerable, having lost more than half of its share value over the past seven years. News Corp. insiders say this is about Murdoch and his Web vision. Murdoch is hosting a California conference on News Corp.'s digital future in coming days. News Corp. and NBC are launching an ambitious plan to show TV programs on Yahoo, AOL and other Web platforms this summer. Murdoch already has a dino-sized Web footprint in social-networking (MySpace.com), TV (AmericanIdol.com) and sports (FoxSports.com). What does he lack? A Web business-news presence, which Murdoch sees as a big moneymaker.
What happens next?
Analysts agree on one thing: Dow Jones is in play. After that, who knows? The Bancroft family -- they control Dow Jones' stock -- may think: "If Murdoch will pay $60 per share, maybe he'll pay $65." Rival bidders may emerge, though none has poked up his head yet. If the Dow Jones board tells all suitors to go pound sand, it could face a wave of lawsuits from shareholders who've watched their Dow Jones stock idle at $35 per share for the past two years, not to mention the new investors who jumped into the Tuesday buying frenzy.
Wait -- who are the Bancrofts?
Descendants of Clarence W. Barron, father of the modern Journal and, until now, the only Dow Jones shareholders who matter. They are a geographically and ideologically disparate family; so far, most say they oppose the sale to Murdoch. But not all. Murdoch will attempt to woo family members on the fence and persuade others to accept his offer.
Is Dow Jones a good company? Is the Wall Street Journal a good business?
For years, analysts have said that Dow Jones is a "C-class" company with an "A-class" newspaper. The company goofed when it bought business data provider Telerate in the 1980s, which lost money. Advertising in the Journal has never fully recovered from the dot-com bubble burst and the ad slump caused by the Sept. 11, 2001, attacks. However, unlike nearly every other daily newspaper, the Journal charges for its online content -- Journal Online subscriptions grew 20 percent in the first quarter of this year.
Is Murdoch good for journalism, or not?
To many, Murdoch is nothing less than Citizen Kane, using his media properties to advance his interests. But editors at the Times of London, which Murdoch bought in 1981, report that the paper has doubled its number of foreign correspondents in recent years, even as U.S. papers are shedding costly overseas bureaus.
Can anything stop Murdoch from getting Dow Jones?
