Under NewsCorp, WSJ Stumbles into 2008

Implications: Despite its unique status -- and the backing of Rupert Murdoch -- The Wall Street Journal is not immune to the pressures facing the newspaper industry.

Analysis: Here’s the good news at the Murdoch-owned Wall Street Journal:  According to new CEO Les Hinton, online is doing well – and prospects are good in Asia.

From that we can extrapolate: The US print Journal is hurting.  And in Europe, with stronger competition from Pearson’s FT and the Economist, the paper is lagging too.

NewsCorp had previously announced it would no longer report WSJ US print lineage – a clear sign that it didn’t expect to have a steady drumbeat of good news to promote to advertisers.

In an interview with the Murdoch-owned Australian, Hinton mentions gains in consumer advertising at the US Journal, which leads to an obvious conclusion: there’s little or no good news to talk about in the core B2B, Financial or Classified advertising categories on which the Journal relies.

Under Murdoch, content at The Journal continues to evolve (more politics, more sports) and the launch of WSJ magazine in September will give The Journal a new way to compete with the The New York Times Magazine and its successful spinoffs, like T.  NewsCorp and The Journal will no doubt do all they can to make the premiere issues of WSJ look good.  But at what cost?  How much of the new magazine advertising will come out of the newspaper itself and how much will be new to the brand?  And with potential cuts to luxury advertising budgets throughout the year, how many advertisers are going to want to switch out of proven Conde Nast and New York Times schedules?

Virtually every newspaper is suffering in the current advertising climate, and the Journal seems to be no exception.  It continues to hedge its bets with wsj.com, keeping it "paid" while evolving to a "hybrid" formula (which makes its least valuable content free).  The "value" of the website also offers NewsCorp a way to stem declines in print circulation, with bundled subscriptions that make the 6-day print Journal available to subscribers for less than $1 a week.