For Dow Jones, A Ticket to Take On the World
Thursday, August 2, 2007
Now that Dow Jones & Co. has agreed to Rupert Murdoch's $5.6 billion takeover bid, what changes might be in store for the Wall Street Journal, and how will the influential chronicler of the American economy fit into the media and entertainment empire that is Murdoch's News Corp.?
One word: distribution.
Dow Jones believes it has tapped into a fast-moving, worldwide information network that has a footprint on every continent except Africa and Antarctica and businesses in every communications medium.
"News Corp. is much more of a global corporation than Dow Jones or the Wall Street Journal, though over the years we have tried to be as global as we can be," Journal publisher L. Gordon Crovitz said in an interview yesterday. "If we can have access to News Corp.'s much larger global operations, that could make us a more successful and more effective corporation globally."
Crovitz said recent research in Europe and Asia, where the Journal publishes thin, tabloid-sized editions, showed that the newspaper's brand and reputation are known far beyond its ability to reach potential customers. The Journal needs News Corp.'s deep pockets to expand.
Crovitz also mentioned MySpace, the world's most popular social-networking Web site, owned by News Corp., as well as the company's Fox Sports properties.
"We believe that social networking is a very important part of our online future; News Corp. obviously has the same point of view," Crovitz said. He added: "There should be opportunities between sports and business, as well, given that the demographics of the audiences are quite similar."
Whether such synergies lead to new revenue is debatable. The New York Times Co. paid Discovery Communications $100 million in 2002 to help launch the Discovery Times Channel, as a way of showcasing Times talent, such as columnist Thomas Friedman. After four years, the Times Co. did not see the sizzle it wanted and sold its half of the channel back to Discovery, taking a loss of $8 million.
In a letter May 14 letter to the Bancroft family, which controlled Dow Jones, Murdoch wrote that News Corp. would provide "the additional capital and scale that will preserve Dow Jones's leadership and growth for generations to come."
Specifically, Murdoch mentioned that he would spend money to expand the Journal's Washington bureau, improve the Journal's New York headquarters and amp up the Journal's clout in Europe and Asia.
"In Europe," Murdoch wrote, "News Corporation has such a large presence that anything less than a leading market share for The Journal would be a disappointment."
News Corp. would not comment publicly on its plans for the Journal beyond Murdoch's letter, but hints can be gleaned from interviews with company sources, who spoke on condition of anonymity because the deal has not closed.