News Corp. – The New Owner of Dow Jones – What a Deal!!!

Implications: I think this is good for Dow Jones. Yes, I know for some purists this is a nightmare. Given the condition of the company, the condition of The Wall Street Journal, and mounting competition from Reuters Group PLC and Thomson Corp., the merger is necessary. Some are appalled at the thought of Rupert Murdoch taking control of Dow Jones owns The Wall Street Journal, Barron's and Dow Jones Newswires. From my perspective that is simply politics speaking. You may not like the guy (Murdoch) but a least he is offering an alternative view than the traditional pandering holier-than-thou-media outlets. I prefer choice and I prefer not to be told what to think by anyone; and that includes the major television news anchors as well. Give me choices. I am not a newsman. I am a consumer. I have been in the mobile media business and content creation business. I see a need for change.

Analysis:

The great thing about the Murdoch acquisition is that he is thinking not only about digital/online news but also about shoring up the actual physical paper as well. Quite a switch and I am sure quite a brain teaser for analysts. Murdoch has stated publicly that he still values reading a real honest to goodness newspaper. Despite all of the hoopla Wall Street analysts have made of online news media, here is a guy who actually thinks he can make a go of a physical newspaper. Obviously, Murdoch understands the people who read newspapers and magazines (all made from paper) are my generation and older. Good for him. As for his online vision; just look at Fox News online; they are a creative and controversial bunch.

I may not agree with all of his politics but bully for him to think I am a market that ought to be served and catered to.

In regard to his vision of online media, he has voiced a dual path vision for news distribution. One is online and one is not. He has recently stated, on his own news program, that he is considering different formats for the newspapers. The new formats would be in the form of articles broken down in such a way that there would be summaries then followed by detailed analyses. The summaries would appear on one page and in another section the stories would be written with greater detail. Frankly I like the idea. I am so sick of having to start a story on page ONE and then be forced to sift through an entire newspaper having to suffer through pages and pages of other stories and worse; advertisements that pop up at the most inconvenient locations. The idea, if I understand it correctly, would be akin to how newspapers currently breakdown news in sections; for example – Nation, Local, Lifestyle, Vacations, Travel, etc.. Now Murdoch could have a section on major news summaries and one on news details. The paper may be easier to handle now; I can take the section I want to read and leave the rest at home. Of course this idea may never be implemented.

I still think, Dow Jones had no choice but to merge. The company is not at all well positioned to take on Reuters Group or Thompson Corp. Dow Jones needs a fresh perspective. News Corp. will bring additional distribution capabilities to Dow Jones. Note that today, Dow Jones Newswires does not distribute its own product directly to its customers, but rather uses other companies, that are controlled by Reuters Group and Thomson Corporation. Talk about the “fox-guarding-the-hen house”. With competition intensifying you can guarantee this relationship won’t last.

Dow Jones needs to control its own news distribution. Combine all of this with News Corp.’s announced business-only news television channel and you have a business news powerhouse.

The deal is about the growth of shareholder value via greater flexibility and distribution.