The acquisition, which brought an end to the Bancroft’s 105-year custodianship of Dow Jones, didn’t come cheap, costing News Corp US$5.6 billion to seal the deal.
Industry observers — many of whom are calling it the media deal of the year — are asking what it will mean for Dow Jones in Asia-Pacific and, conversely, News Corp.
For News Corp comes improved access into China through the Wall Street Journal Asia’s Chinese-language site, while pairing News Corp with its print title across the region — Murdoch’s first real print presence in Asia-Pacific since selling out of Hong Kong’s South China Morning Post two decades ago. But while viewed as a shrewd move, media agencies suggest rivals such as the Financial Times and the International Herald Tribune should not panic. “They should feel a little threatened, but not a great deal more than before,” says Mike Cooper, Omnicom Media Group Asia-Pacific CEO.
Amid concerns about editorial integrity, it appears Dow Jones’ online properties are likely to benefit the most. While the WSJ’s US version is the largest paid news-site globally, its Asia-Pacific product — which is bundled with the print edition — is comparatively small when placed against its US sibling.
According to Ogilvy PR regional president Chris Graves, who spent 18 years with Dow Jones, while company chiefs realise the importance of expanding the brand’s online presence, much of it comes down to timing. “Here’s the difficulty: they’re standing in two boats,” says Graves. “The old boat, or traditional media, is leaking, but the new boat, or new media and online, isn’t big enough to support them yet. The disparity between revenue is still simply too great.”
Editorial integrity has attracted the lion’s share of the media focus on the deal, given the contrast between the WSJ’s sober style, and Murdoch’s populist leanings.
To allay fears, Murdoch has agreed to establish an oversight committee to ensure Dow Jones’ integrity and quality of product is maintained. “Dow Jones manages the separation of church and state extremely well. Murdoch won’t interfere with that, but you can expect him to introduce a greater flexibility in a business sense,” says Cooper.
Few expect the same immunity to be granted to Dow Jones’ mid- and senior-level managers in Asia-Pacific. “Some changes would be well advised, because the company has not generally been well managed at all,” says a source who requested anonymity.
Another talking point is Dow Jones’ financial performance across the region, and whether Murdoch and his fiscally-prudent practices will accept less than stellar numbers indefinitely. “Dow Jones has made difficult decisions in the past and Murdoch the businessman has shown he can make tough decisions as well. If there’s anywhere that he’s prepared to take a longer-term strategy, it’s Asia-Pacific,” predicts Cooper.