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The Wall Street Journal may avoid a financial bind.
Published Aug. 2, 2007

Had it continued on its own, the Wall Street Journal would have faced a brutal slump in print advertising that is plaguing the newspaper industry as well as fierce competition in the market for delivering business news.

Now that it's part of Rupert Murdoch's media empire, Journal publisher Dow Jones & Co. will have access to several things it would have had a tougher time finding alone: capital to invest in new digital distribution channels; ready access to multiple media platforms and more muscle to compete against rivals at home and abroad.

Many had opposed the $5-billion deal, both within Dow Jones and outside. Numerous people posting on a discussion board on promised to cancel their subscriptions, and Leslie Hill, a member of Dow Jones' controlling shareholders, the Bancroft family, quit the company's board in protest.

In her resignation letter, Hill said that while the "short term financial benefit is difficult to deny," she also believed that it was "not enough to outweigh the potential ramifications of the loss of an independent global news organization with unmatched credibility and integrity."

At the same time, senior Dow Jones executives acknowledged the tough road the company would have had if it elected to remain a standalone entity and the new opportunities open for expansion under Murdoch.

Despite its tremendous clout in the business world, Dow Jones, with just $1.8-billion in revenues last year, remains a relatively small company in a media landscape increasingly dominated by far larger companies.

Dow Jones chief executive Richard Zannino told his staff Wednesday that joining with News Corp. meant greater opportunities to expand.

"With nearly $30-billion in annual revenue, News Corp. has the money - and the intention - to invest in our business on a scale we can't," Zannino said.

Even after paying the $5-billion for Dow Jones, Murdoch has said he plans to invest even more in building up the paper's Washington coverage at home - where it will compete even more fiercely with the New York Times for national readers and advertisers - as well as overseas, where it goes head-to-head with Pearson PLC's Financial Times.

Looking ahead, antitrust experts predict News Corp.'s deal for Dow Jones & Co. will glide through regulatory reviews because the global media empire is not concentrated in a particular product or region. The global reach of News Corp. also will help the Journal's news find new readers and advertisers in other media at home and abroad.

Dow Jones & Co.

Main businesses:

- The Wall Street Journal. Daily circulation of about 2-million, including qualified electronic editions, and, the largest paid newspaper subscription site on the Internet.

- Barron's. A weekly financial publication with circulation of about 300,000.

- Dow Jones Newswires. An electronic financial news service. Most of its revenue comes from the sale of its news service to real-time terminal customers of Bloomberg LP, Thomson Corp. and Reuters Group PLC who choose to pay extra for it.

- Dow Jones Indexes. Compiles thousands of stock market indicators, including the Dow Jones industrial average.

- Factiva. A news database with 1.8-million subscribers. Dow Jones bought the other half of Factiva that it didn't already own from Reuters in late 2006 for $160-million.

- Ottaway Newspapers. A group of community newspapers Dow Jones acquired in 1970. Former Dow Jones board member Jim Ottaway Jr., who controls about 5 percent of Dow Jones' shareholder vote, is a vocal opponent to ownership by Murdoch.

News Corp.

Main businesses:

- Twentieth Century Fox. Movie and TV studio.

- Fox broadcast network. Home of American Idol, 24, The Simpsons and House. News Corp. also owns 35 local TV stations, including WTVT-Ch. 13 in Tampa, but has agreed to sell nine of them, mainly in smaller markets.

- Cable television. Fox News Channel, FX, Speed and several regional sports networks.

- Satellite television. News Corp. owns Sky Italia and significant stakes in British Sky Broadcasting PLC and the DirecTV Group Inc. Liberty Media Corp. has agreed to acquire the DirecTV stake in a swap for a block of News Corp. stock, boosting the Murdoch family's voting stake in News Corp.

- Newspapers. Numerous newspapers in Australia and the United Kingdom, including the Australian; the Times of London; the Sun and News of the World. Only U.S. newspaper was the New York Post.

- Magazines. The Weekly Standard and about 40 percent of Gemstar-TV Guide International Inc.

- Books. HarperCollins, a major U.S. publishing house.

- Internet. MySpace, the online social hangout; Rotten Tomatoes, a movie review site; IGN, a gaming site; and, a sports site.

Associated Press