Murdoch's crown jewel

Rupert Murdoch's acquisition of Dow Jones, which (among other things) publishes The Wall Street Journal, the world's largest financial newspaper, is primarily a consequence of the company's under-performance over many years""revenue has not budged much in the last five years, and newspaper sales as well as advertising have been falling. This is in part because of the sustained shrinking of the American newspaper market. Shareholders, who had no effective say in the running of the company, could do little other than watch or protest from the sidelines as the company's share price slid down the charts; a take-over bid became almost inevitable. Mr Murdoch offered a substantial premium to the prevailing market price and, after attempts to bring in rival bids got nowhere, shareholders had no real reason for turning him down, other than saying that they did not like the way he runs his newspapers. This has been resolved, it is said, through agreement on setting up a committee that will oversee the hiring and firing of senior editors""in effect, creating a wall between Mr Murdoch and the Journal's editorial operations, which must surely be at least mildly insulting to Mr Murdoch. Such stratagems have been tried before, including in India, and their history is not very encouraging. It would be a fair bet that, eventually, Mr Murdoch will run the company exactly as he wants to.

The acquisition, therefore, is a ringing endorsement of the future of newspapers in an American market where copy sales have been falling by about 5 per cent annually for all of this decade. Mr Murdoch is an old-style newspaperman in the age of the Internet, still very much in love with what ink on newsprint can do; but it helps that the Journal has had a successful web strategy, since Mr Murdoch is also a self-professed believer in the proposition that the future belongs to the Internet. The new owner, it is additionally clear, sees value in how the Journal's content could be integrated with a business television channel, which he is readying to launch. What might result, therefore, is a very new-age, integrated, multi-media operation""and one that is run more purposefully than it has been for some time.

A newspaper can suffer in important ways even as the company that publishes it prospers, and one question is whether the Journal in Mr Murdoch's hands will change""for the worse. Mr Murdoch has a history of pushing his agenda through his publications and doing deals that have involved pursuing his business interests by sacrificing independent editorial decisions. His HarperCollins book company cancelled a book deal with the former governor of Hong Kong, Chris Patten, in order to curry favour with the authorities in Beijing; earlier, BBC was omitted from a Star TV bouquet, for the same reason. His Fox News in the US is not known for its impartiality. And an inquiry into the complex, non-transparent structure of Mr Murdoch's holdings and the use of tax shelters, published some years ago, revealed precisely the kind of corporate conduct that the Journal's editors might disapprove of. On the other hand, no sensible investor would want to destroy what he has bought, and Mr Murdoch is more into long-term vision than quick returns. So what the new owner might do is introduce greater business dynamism in a company that has not been known for it""and, for all one knows, one of the world's great newspapers might even benefit from having a new owner who will not be an absentee landlord.