Tag Archives: Wall Street Journal

Upheaval in financial news

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Steve Lohr of the New York Times writes Saturday that News Corp.’s office to buy Dow Jones & Co. for $5 billion plus Thomson’s overtures to Reuters Group Plc signal massive upheaval in the financial news business.

ThomsonLohr wrote, “Financial news and information, they say, has a growing worldwide audience, and that affluent community is a lucrative market for advertisers and subscription services. And the opportunity, they add, is multimedia, with financial news and data delivered over the Web, on television, in print and to specialized computer terminals on trading desks.

“‘This is all about exploiting these financial news, information and data sources globally as never before,’ said Harold Vogel, an independent media industry analyst. ‘And no matter who ends up owning these companies, that is the way of the future.’

“For both companies, the proposed mergers confront current problems. For Thomson, one of the most aggressive and innovative media companies but one with very little public profile, acquiring Reuters would greatly increase its competitive position against the current leader in the market, Bloomberg. Reuters would lift Thomson’s share of that market to 34 percent from 11 percent, compared with Bloomberg’s 33 percent, according to Inside Market Data, a research firm.

“Currently, Reuters is No. 2 in financial data, after Bloomberg, and Thomson Financial is No. 3. They are competitors, but they tend to cater to different customers, analysts said. Thomson customers tend to be institutional investors, while Reuters customers are more often brokers and bankers who sell securities.”

Read more here.

Regulators probing Dow Jones insider trading

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The New York attornety general’s office and the Securities and Exchange Commission are investigating possible illegal insider trading in Dow Jones & Co. stock before it was revealed that the owner of The Wall Street Journal, Barron’s and Marketwatch had received a $5 billion offer from News Corp.

Insider trading cartoonKaren Scannell of the Journal wrote, “A Dow Jones spokesman said the company had received a subpoena from the attorney general and an inquiry from the SEC. ‘We will cooperate fully with the authorities investigating the matter,’ the spokesman said. A News Corp. spokesman said that company too had received a subpoena from the attorney general and an SEC inquiry. ‘We are cooperating fully,’ the spokesman said.

“Eric Corngold, New York state’s executive deputy attorney general for economic justice, declined to comment, as did an SEC spokesman.

“Several investment banks are advising News Corp. and Dow Jones. It isn’t clear if any have been contacted yet by authorities.”

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Critique of deal coverage overblown

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TheDeal.com executive editor Yvette Kantrow writes that a recent critique of merger and acquisition coverage by The Audit used examples to make its point that were weak.

Kantrow wrote, “Indeed, The Audit’s evidence that ‘the business press loves the deal’ amounts to excerpts from three recent first-day stories in The Wall Street Journal, The New York Times and the Financial Times. Though rather anodyne to us, The Audit contends they use ‘overheated language.’ A WSJ piece on Barclays plc’s play for ABN Amro Holding NV, for example, credits the deal with ‘unleashing’ a ‘long-awaited’ wave of bank mergers in Europe that will ‘reshape the industry as the continent’s financial giants yield to the lure of size and global scale.’

“Feverish yet? Neither are we. Especially since the WSJ’s Heard on the Street column warned the next day that investors who have been bidding up European bank shares in anticipation of consolidation ‘would do well to be skeptical.’ So much for blindly loving deals.

“A few years ago — say 1999 or 2000 — we might have agreed with The Audit. The media adored deals then, best exemplified by all those big merger ‘scoops’ that were strategically leaked to the WSJ in exchange for good placement and generally positive stories. The Audit hints that this is still going on — it lists the ‘business press infrastructure’ and the ‘public-relations infrastructure that manages major deal announcements’ as factor behind ‘the unproductive deal churn.’ But we haven’t seen a rash of really egregious placements for years.”

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WSJ union to Murdoch: You just don't get it

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The union that represents the business journalists at The Wall Street Journal, Barron’s and Marketwatch responded Friday in an e-mail to its members that comments made by News Corp. CEO Rupert Murdoch in a story in Friday’s New York Times show that he doesn’t understand the Journal.

IAPENews Corp. offered to buy Dow Jones & Co., the parent of the business papers and web site, for $5 billion earlier this week.

Union president Steve Yount said, ”I was particularly troubled by an apparent off-hand comment in the New York Times interview with Rupert Murdoch, quoting Mr. Murdoch saying, ‘I’m sometimes frustrated by the long stories,’ he said, adding that he rarely gets around to finishing some articles.

“I’m afraid Mr. Murdoch doesn’t understand why The Wall Street Journal is The Wall Street Journal.

“Not everything is five paragraphs and picture.

“Dow Jones did not become the most trusted source of business news and information in the world by serving up News Nuggets.”

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Trophy business at Dow Jones is online

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Fortune senior editor David Kirkpatrick writes that the voluminous coverage of News Corp.’s proposed $5 billion offer for Dow Jones & Co. virtually ignores what he considers the company’s trophy business. It’s not The Wall Street Journal, Barron’s or Marketwatch, but the online operations.

News Corp.Kirkpatrick wrote, “Of course, Murdoch knows how to run papers as well as anybody. And he will take control of the Journal with gusto I’m sure (and I suspect, contrary to what many say, with respect for its editorial independence and traditions). But this is also the man, more than others in his generation who run big media companies, who has shown he understands how deeply the media world is changing as the Internet’s grip grows stronger. And Murdoch’s big-picture view is the key to his success and greatness.”

Later, he added, “But I believe building an online business that way is making a pact with the devil. Information online is a world of links – a collective dialogue among numerous sources and speakers. When you close off a news site with a wall that is only crossed when a reader pays, you remove its content from that collective dialogue. Over the past few years, it has seemed to me that the relative weight and importance of the Journal’s editorial content has diminished as other voices – both institutional and individual – have emerged online. WSJ.com has not been part of the freewheeling interactive conversation of the Web.

“Furthermore, WSJ.com can’t fully participate in the big money play online, advertising revenue, because it deliberately limits traffic to its site with its subscription model. It gives up a potentially very large monetizable audience by hiding behind a pay wall. Granted, people will pay for news that helps them make money. But while it’s possible to envision a global Journal-branded news site of almost MySpace scale, it’s a mistake to imagine that very many people will pay for it.”

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Murdoch on what he likes — and doesn't like — about the Journal

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Rupert Murdoch, the CEO of News Corp. talked to the New York Times for a story published Friday about what he reads in The Wall Street Journal in the wake of his company’s $5 billion bid for Dow Jones & Co., the parent of the Journal as well as Barron’s and Marketwatch.

Rupert MurdochRichard Siklos and Andrew Ross Sorkin wrote, “‘I’m sometimes frustrated by the long stories,’ he said, adding that he rarely gets around to finishing some articles.

“The editorial pages? He likes them but would like to see more political coverage in the news pages. ‘I might put more emphasis on Washington,’ he said. He’s not a huge fan of the Saturday Journal begun in 2005, but he would continue it and look at converting its Pursuits section into a glossy weekend magazine to compete with The New York Times Sunday Magazine.

“And while he’s no technology geek, he also said he regularly reads the paper’s technology columnist, Walter Mossberg, although he added: ‘I don’t say I understand it perfectly.’”

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News Corp. to woo Bancrofts, WSJ journalists

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Dennis Berman, Matt Karnitschnig and Susan Pulliam of The Wall Street Journal wrote Friday that News Corp. plans to shmooze members of the Bancroft family as well as the journalists at The Journal in an attempt to convince both that its proposed $5 billion deal for Dow Jones & Co. would work.

The reporters wrote, “The media conglomerate run by Rupert Murdoch is considering making its case to journalists detailing the company’s plans for capital investment, people close to News Corp. say. News Corp. would address a number of issues in its discussion, such as beefing up staffing levels in international news bureaus and putting more capital behind the company’s electronic properties, said one person close to News Corp. The plans to talk to journalists are preliminary, this person said, but would be aimed at fostering ‘recognition and desire about having a dialogue with a very important constituency’ in Mr. Murdoch’s takeover attempt.

Paul Steiger“Any campaign would be structured to win over both the Bancroft family and the company’s reporters and editors, some of whom have begun agitating against the $60-a-share takeover bid from News Corp. and its chief, Mr. Murdoch. The Bancroft family, which controls 64.2% of Dow Jones’s voting power, is opposing News Corp.’s $5 billion bid. The family has said that members accounting for more than 50% of the overall voting power oppose the deal.

“News Corp.’s strategic efforts came as a group of Journal reporters yesterday urged the newspaper’s journalists to write individual letters opposing Mr. Murdoch’s offer to the three Bancroft family members on the Dow Jones board. Paul E. Steiger, the Journal’s managing editor, said that any journalists who wrote letters advocating opposition to the offer wouldn’t be involved in the coverage of News Corp.’s bid.”

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The problems with buying Dow Jones

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Joseph Lazzaro writes on BloggingStocks.com that one of the problems with News Corp.’s proposed $5 billion purchase of Dow Jones & Co., the parent of The Wall Srreet Journal, Barron’s and Marketwatch, is that how business journalism will be delivered to consumers in the future has not been decided.

Wall Street JournalLazzaro wrote, “Murdoch, his multimedia prowess and financial success undisputed, nevertheless represents a different kind of publishing and news operation. Putting aside the ideological nuances, Murdoch represents staff cuts, and a generally less-in-depth / more-breezy presentation of news, among other changes. Whether this approach to news can live in the same house with The WSJ’s public trust dimensions remains an open question.

“Finally, there is the 800-lb. gorilla in the room: there is this reality called the digital age. The digital age is still in its infancy, but it’s already propelled changes in business news, and journalism. At this juncture no one can say with any certainty exactly what role print journalism will play in the years ahead. Hence, forwarding an above-average bid for a print asset before the new business journalism rules (and publishing rules) of the digital age are clarified is risk-filled, to say the least.”

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WSJ reporters begin letter writing campaign to Bancrofts

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According to an e-mail obtained by Dealbreaker.com’s John Carney, the reporters at the Wall Street Journal are beginning a letter writing campaign to the three board members of Dow Jones & Co. who are members of the Bancroft family that controls a majority of the voting stock.

The journalists want the family members to resist selling the company.

Jesse DruckerReporter Jesse Drucker wrote, “As some of you know, there is a movement afoot to appeal directly, via letter, to each of the Bancroft family members that sit on our board. I am urging you to take part in this. The Bancrofts are under tremendous pressure to accept News Corp’s offer, and that pressure will only become greater in the likely event that Murdoch raises his bid. The fact they have opposed it so far indicates that they are committed to maintaining the quality of The Wall Street Journal and all of Dow Jones’ publications and products – despite their opportunity to profit tremendously from accepting the offer.

“A short letter addressed to each of the three – make a separate copy for each – urging them to stand firm can only help our cause. The board members are Leslie Hill, Christopher Bancroft and Elizabeth Steele. If you feel strongly enough to write such a letter, please try to get it to me by tomorrow (Thursday) and I will overnight a package of letters to each of them. If this is not feasible, I willl aim to get it to them by Monday. Our colleagues across the country are planning on taking part.”

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Cramer: Dow Jones board should take bid or resign

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TheStreet.com’s Jim Cramer writes Thursday morning that the Dow Jones & Co. outside board members are all current or former executives of other companies who know something about creating shareholder value and thus should take the $5 billion offer from News Corp. to sell the owner of The Wall Street Journal, Barron’s and Marketwatch.

Jim CramerCramer wrote, “The business people on this board were not brought on to rubber-stamp the Bancroft family’s wishes. The old board, the one I confronted 10 years ago about Dow Jones’ profitability when I had amassed 4% of the company, was a sinecure board. Don’t believe me? Go ask MFP Investors’ Michael Price, the legendary creator of value who was given the back of the hand by the old board.

“This board is going to be very worried about being sued. These members are going to be very worried about why they are even on the board if they can’t think about bringing out shareholder value. They are not on the board to protect the newsroom. They are on the board to assess whether Dow Jones can get to $60 on its own at some time in the future without the Murdoch bid. If they can’t opine on the bid, they know they are a sham board, and these are not sham people.

“I believe that these board members are going to have to support this bid. I think they are going to pressure the Bancroft family — which is no longer intransigent — to take a higher deal or they will have to resign en masse and reveal the charade that is dual classes of stock. I also believe that they will be able to convince a couple of Bancrofts, and that will be enough to do the job.”

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