Murdoch Covets Dow Jones for More Than Bottom Line

Media empire builder Rupert Murdoch may want Dow Jones for its editorial content and clout rather than any extra dollars the acquisition would add to News Corp.'s bottom line.

Murdoch has offered $60 a share for Dow Jones, about a 67% premium to the stock price before Tuesday’s run-up.

Those who say Murdoch would get just a premium national newspaper, The Wall Street Journal, and a so-so magazine, Barron’s, aren’t taking the long view and overlook the synergies the acquisition would provide.

Murdoch plans to launch a TV business channel later this year and the acquisition of Dow Jones would give the startup immediate prestige and top-notch content. The Journal’s online edition is subscription based, bucking the typical Internet model of free distribution.

General circulation newspapers face declining circulation and falling ad revenue. The Journal is different. It’s a national paper with a stable of top-of-the-line advertisers that want to reach the Journal’s two million subscribers, many of them influential Wall Street and business leaders.

The Wall Street Journal also has a conservative editorial page. It’s a good counterpoint to the liberal New York Times and Washington Post and it would fit nicely with the editorial page of Murdoch’s money-losing New York Post.

News Corp. owns major newspapers in England and Australia, but the New York Post, its only holding in the United States, loses about $70 million a year. The Post, the loudest and most outrageous of the New York tabloids, has deftly positioned itself as a goofball “second read” after upscale readers finish the Journal or Times.

On Friday, Murdoch begins a three-day meeting in California about his company’s print strategy. Someone is bound to mention the possible acquisition of Dow Jones.