Murdoch Wins Bid for Dow Jones

Washington Post staff writer Frank Ahrens was online today at 12:30 p.m. to answer questions about Rupert Murdoch's purchase of Dow Jones.

A transcript follows.

Read Frank's coverage of the deal and watch a video timeline about the publishing mogul.

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Frank Ahrens: Greetings, everyone, and thanks for joining me.

At the top of today's story, I wrote: "Rupert Murdoch has won the Wall Street Journal."

I could have easily followed that sentence with: "And the world continued to turn on its axis."

Deals come and go on Wall Street and Main Street. At the end of the day, Murdoch buying Dow Jones and the Wall Street Journal is a business deal -- he saw an opportunity, he assigned a value to it and he chased it down until it ran aground.

Anything Rupert Murdoch is involved in, though, instantly becomes sexy. He is a convenient bogeyman for those who fear Big Media, those who see bias in his news properties and so forth.

Others see him and his news properties -- Fox News, the New York Post -- as antidotes to the liberal MSM (mainstream media). Lots of folks would include this very publication in that latter group.

And Rupert buying the Wall Street Journal is as mixed a media marriage as I can think of.

So it's fun and interesting to mix it up when it comes to Things Rupert. Let's have at it -- I'll take your questions, comments and opinions

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Arlington, Va.: Isn't a bit strange that people are worried that Rupert Murdoch might "Republicanize" the Wall Street Journal? Is it possible that the paper could be any more conservative than it is today?

Frank Ahrens: Ha! Good question.

The WSJ like most papers has a firewall between its news and opinion pages, and I'm guessing you're referring to the opinions of the Journal, which are indeed conservative.

I know plenty of reporters and feature writers at the Journal who cannot stand to look at their own paper's opinion pages because the views published there veer so wildly from their own.

In addition -- and I find this fascinating -- the editors on the Journal's opinion pages actually are worried about Murdoch, which might surprise you. Why? Because they view him as an political opportunist -- he has cozied up to both Maggie Thatcher and Tony Blair, Ronald Reagan and the Clintons -- and not as a true, ideological conservative, as they are.

Hey -- for a video history of Murdoch, check this out.

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Crawfordsville, Ind.: Hey, Frank. Do you expect anything to come out of the insider trading thing you noted in today's piece?

Frank Ahrens: Maybe -- the case in brief: A young Hong Kong couple with no history of a) buying Dow Jones stock and b) buying huge quantities of any stock suddenly bought like 400,000 shares of Dow Jones shortly after Murdoch approached Dow Jones with his offer but BEFORE it became public.

The couple paid for their big stock buy with a loan from the woman's Pop, who is acquaintances with...David Li, a member of the Dow Jones board of directors!

The SEC is probing whether Li leaked insider information to his Hong Kong buddy. He has maintained his innocence, saying he's broken no laws.

The SEC is sniffin' around, though.

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Massachusetts: Is there any chance that Murdoch will make the WSJ free to read online for those of us who can't simply write it off as a business expense? Is there any chance that the WSJ will ever be free to read online?

Frank Ahrens: I think there's a decent chance that the WSJ online *will* end up being free.

Murdoch has ruminated about that to reporters. Here's why:

Right now, the Journal has shown it can make a business by charging people to read top-flight financial news. WSJonline has something like 1 million subscribers. So that's good. And that's one of the things that Rupert liked about the Journal. (Don't you love the way I keep writing, "Rupert," like we're mates?.)

But Rupert(!) has said that charging for the WSJonline could be too small-bore of a business. It's a nice little business, but that's all it is. He has contemplated making it a free site and selling advertising, which he believes would bring in *much* more revenue than charging a subscription price, especially if he is spreading WSJ content globally on his many platforms.

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Montgomery Village, Md.: Frank, Currently, NBC joins with WSJ for their political polling as is the case with other network and newspaper joint polls. What happens to that relationship now if the same owner has Fox and WSJ?

Frank Ahrens: Also currently, CNBC has a contract with the Journal to share content -- CNBC gets news and personnel from the Journal -- and that contract runs through 2012. CNBC said yesterday they expect that contract to be honored.

News Corp. has not said yet what it will do with the partnership -- perhaps pay to unwind it.

But if they don't imagine the scene: Murdoch paying his Journal reporters to appear on CNBC even as he is starting his own Fox Business Network -- a direct rival to CNBC -- in October.

So the answer is, I don't know what happens to all those partnerships. When it comes to media partnerships, we tend to be pretty promiscuous. For instance, the New York Times and MSNBC just announced a partnership to cover the 2008 election, even as MSNBC has a partnership with us here at The Post, putting we reporters on their show.

Speaking of MSNBC, I was watching Bush/Rupert/Rush/O'Reilly hata Keith Olberman the other night. He calls Fox News "Faux News" and was pushing for Fox News to have to label itself "Fox Opinions." The night before Rupert got the Journal, Olberman said, "It looks like the deal's not going to happen."

Oops! What would Dan Patrick say?

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D.C.: So then who wrote that he "seized" the WSJ?

Frank Ahrens: It looks like that was the headline on the Web version of my story, which means it would have been written by an editor at Washingtonpost.com. Sounds martial, doesn't it, like Grant at Vicksburg?

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Arlington, Va.: I'm interested in how the online version of the WSJ might change under Murdoch, apart from ads. Does Murdoch have any news holdings that are mostly online or have a big online presence?

Frank Ahrens: Well, he has one property that has a pretty substantial online presence -- MySpace, the world's biggest social-networking site, which he bought in 2005.

MySpace claims something like 100 million user profiles and a billion-some views per month.

Murdoch was criticized five or seven years ago for not making a big Internet buy and "missing" the Internet. And we can see how well that strategy worked out for AOL and Time Warner.

Murdoch actually came close to buying what would have been an ill-fated property, but pulled out at the last moment.

So he lay in the weeds, waiting for this whole Internets thingie to shake out and, when he saw how MySpace was blowing up, he pounced.

Now, he's crabbing about how people are leaving MySpace for Facebook, but considering those dudes have already turned down $1 billion for their site, I would be surprised if Murdoch is cutting anymore checks anytime soon.

The genius of Murdoch owning MySpace -- indeed, of anyone owning a user-generated content site -- is that YOU DON'T HAVE TO PAY TO CREATE THE CONTENT! And you get to sell ads on it, so it's almost a pure-profit play. Not bad.

As for the Internet presence of his other properties, he put a bunch of them under one roof last summer in L.A., in a division called Fox Interactive Media. That's where MySpace, AmericanIdol.com, FoxSports.com and so forth live.

At the time, the guys at FoxSports.com promised a big redesign and robust presence, but I haven't seen it yet.

For his newspapers, well, the New York Post Web site doesn't make your socks go up and down but remember, that's a straphanger demographic -- people pick up the paper copy, maybe not read the paper on the Web. The Times of London Web site, however, is quite nice.

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D.C.: Actually, the front-page headline on my print version of the Post (Md. suburbs, home delivery) stated that he "seized" control. Post.com had the much more sober verb.

Frank Ahrens: Then that was written by our apparently equally martial copy desk here in the Business section of The Post. It's a vivid verb, ain't it?

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Silver Spring, Md.: In reading many of the responses in the WSJ.com's forum it seems pretty evident that many of the subscribers are highly critical of Murdoch and believe that he will eventually compromise the integrity of the newspaper. I would estimate about 90 percent of the responses have said they will cancel or will not renew.

Do you have any sense as to what the legitimate cancellation numbers are? It would very interesting to find out just how many subscribers are protesting this deal.

Frank Ahrens: I don't know that number yet but it's something that may be included in Dow Jones's next quarterly earnings report as they report churn in subscriptions.

I'm guessing there's an instant and visceral reaction to a Murdoch ownership of the Journal by some of its readers, many of which, I'm guessing, haver never seen "American Idol," think "The Simpsons" is juvenile or believe Fox News is the unofficial propaganda arm of the White House.

Also, I bet Murdoch's tabloid sensibilities may ruffle some of the more button-down readers of the Journal.

I have a weird little scenario for the Journal under the first year of Murdoch's ownership: He pours a gazillion dollars into the thing, increases the news hole, hires more reporters -- paying top dollar to lure away stars from other publications -- and the paper launches on some massive, important and world-changing public service series, for which it wins the Pulitzer. Rupert then holds up the paper and says, in his Aussie accent, "Told ya!"

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Lansdale, Pa.: Does this deal put News Corp in charge of determining the Dow Jones Industrial Average? If so, are there any concerns that Fox-type spin may be used in determining the number on critical occasions? I don't know how this may be done, but I suspect that such things as the mix or weighting of stocks could be massaged to produce better or worse numbers if the index could be seen as affecting an imminent event, such as an election. Do media outlets which quote the DJIA (which seems to be every media source) pay any sort of fee to Dow Jones for its use?

Frank Ahrens: See? It's possible to imagine anything about Rupert, isn't it?

"The Dow Jones Industrial, Transportation and Utility Averages are maintained and reviewed by editors of The Wall Street Journal," writes the Web site of the Dow Indexes.

That means editors that will be working for Rupert.

I'm not sure what you mean by "Fox-type spin" -- I'm not playing dumb or ingenuous, it's just that that phrase means a lot of things to a lot of people -- but I suppose anything is possible.

However -- Rupert's deal to buy Dow Jones includes the creation of an editorial board meant to act as a buffer between Rupert and the Journal newsroom. I know, I know, some people will doubt the efficacy of such a board, but I'm just saying it will exist.

And I have not read any stories yet, even in the Journal, raising alarms about Rupert having his hands on the levers of the economy.

At the bottom of this deal, I think, is Rupert buying the credibility the Journal. He is a smart businessman and he knows the difference between his products and his markets. There is a market for his lurid tabs in London that show topless women and there is a market for the more-sober Times of London and WSJ. And it makes no sense to turn one product into the other, I'm guessing.

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NY, NY: Why aren't WSJ staffers happier about this? They can finally compete with the New York Times on a global level.

Frank Ahrens: Heck of a good question.

The WSJ already has something of a global footprint, with editions in Asia and Europe. And they clearly are the superior business publication to the New York Times, which is nobody's slob.

However, Rupert will, I believe, be able to explode the value of WSJ content around the world thanks to his many media platforms -- people will see WSJ content who have never seen it before.

And think about it this way: How many people do you know who say they're going to put money INTO a newspaper in 2007?

I'll tell you someone who is not keen to compete against the new, more muscular Journal: former Dow Jones director Dieter von Holtzbrinck, who quit the board a couple of weeks ago in -- he said -- protest to Murdoch's bid and what he would do to the company.

What the Vonster *didn't* say in his letter to the Dow Jones board, which became an SEC filing and therefore public, was that his publishing house in Germany owns a business daily newspaper, sort of the WSJ of Germany. And his company owned part of the WSJ Europe and Dow owned part of his paper.

Now, that cozy little American-Teutonic partnership is blown to Aussie heck and Herr Von will have to compete against a WSJ Europe that will be gunning for schnitzel. Or something.

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Washington, D.C. 20071: Hi, Frank. When will we start seeing Page Three Girls in the Journal? It could really use some spicing up.

Frank Ahrens: If only. Perhaps so, but I bet they will be in that Pointillist woodcarving style of theirs.

Some of my media colleagues have been having fun with the concept of Rupert owning the Journal, imagining headlines like "Headless Hedge Fund in Stop-Loss Market," a play on the classic NY Post headline, "Headless Body In Topless Bar," and so forth. And maybe a list of the hottest fund managers on the Street. Good fun.

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Lansdale, Pa.: Of course you do not know what I mean by Fox-like spin. I just made up the concept. Your whole chat sounds like a job application to the Murdoch WSJ. Are there fees paid to be able to quote the DJIA as is done in almost every newscast?

Frank Ahrens: Olberman? Is that you?

I do not know if if The Post pays a fee to Dow Jones Indexes to be able to use the figures that I write into every market story, as we pay fees to Bloomberg, for instance, for using their terminals to provide data

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Frank Ahrens: That's all the time I have for today, folks. Thanks for your time and questions and comments.

Murdoch remains a Rashomon or Rorschach figure -- you see what you want to see.

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