Dow Jones Indexes for Sale: What's News Corp's Strategy?
Dow Jones is reportedly shopping around its stock market indexes, working with Goldman Sachs to investigate finding a joint venture or a flat-out buyer. This is surprising because the indexes are stable and profitable, in sharp contrast to many other newspaper properties News Corp owns, which are struggling with declining ad revenues. In 2007, the year before New Corp acquired Dow Jones the indexes reported $101 million in revenue. It's notable that the company would look to sell such a unique asset when it's not underperforming.
What's the official word? Dow Jones Indexes would neither confirm nor deny the WSJ's report to CNBC. However, a spokesperson says this wouldn't be the first time that rumors of a possible DJ Indexes sale have been floated - they even came up prior to CEO Rupert Murdoch's acquisition of Dow Jones.
Back when Rupert Murdoch bought Dow Jones in 2007 it was the peak of the market, he paid some $5.7 billion dollars. Wall Street rumbled about the value of newspapers moving forward if ad revenue continued to decline. Those concerns were borne out this year when News Corp wrote down the value of Dow Jones by $2.8 billion this year.
This news comes at a time when Murdoch and his recently-appointed Chief Digital Officer Jon Miller are talking more and more about monetizing their news properties. Earlier this week the company announced it's shutting down its free London paper, which lost some $20 million in the past year. The ad-supported model didn't hold up and it seems like Murdoch is determined to minimize reliance on newspapers across the board. Murdoch believes consumers will pay for content and on News Corp's most recent earnings call talked about rolling out the a subscription model beyond the Wall Street Journal. Now there's talk that News Corp is reaching out to the New York Times, Washington Post, and the Tribune Company to form a consortium that will charge for content, which will obviously will raise plenty of scrutiny.
But if News Corp believes in the value of unique content and sustainable businesses, why sell the Dow Jones Indexes?
Questions? Comments? MediaMoney@cnbc.com