KEY POINTS:
Rupert Murdoch's Sun newspaper in Britain has its sexy page three girls.
His US tabloid, the New York Post, is filled with sensational headlines and Page Six, the paper's infamous daily dose of gossip about Paris Hilton, Lindsay Lohan, Britney Spears and other troubled celebrities of the day.
Murdoch's Australian tabloids have carved out dominant footholds in their cities with their own brand of sensationalism.
That's why Murdoch's US$5 billion ($NZ6.9 billion) play for Dow Jones, the owner of America's most respected newspaper, the Wall Street Journal, last week was such a surprise.
Times may change, but it seems Murdoch's ability to sniff out a moneymaker has not. The News Corp chairman gave little away yesterday about his US$60 a share tilt at Dow Jones, but he revealed some of the reasoning behind the ambitious takeover play.
He called News Corp's offer "generous".
"We made the offer at what we believe is a full and more than fair price because our two companies are a perfect fit," Murdoch told analysts and reporters yesterday after News Corp announced a record third quarter profit. "Each could benefit greatly."
Regular newspapers, Murdoch said, "are under a lot of pressure", while financial news has plenty of potential.
"Financial publishing is totally different," he said. "It's something you can charge highly for.
"It's something you can customise.
"You can take that journalism and information and sell all over the world.
"It's a quite different market."
News Corp is cashed up and after decades in racy tabloids, is building a financial news business.
The company's long-awaited Fox business TV channel is due to launch in the US later this year, Murdoch confirmed.
Toss in the Wall Street Journal brand and the Fox business TV channel has instant credibility.
"It's unique," Murdoch said. "It's a huge opportunity."
Murdoch identified Poland and India as newspaper growth areas, but said the company was not interested in pursuing opportunities there.
News Corp would, apart from its bid for Dow Jones, concentrate on its current portfolio of newspapers, he said.
"We're busy at defending our turf and trying to expand it," Murdoch said.
"We're learning a great deal about readership and what people will read.
"We're looking at the growth of these free newspapers which frankly, none of them that I know of, are profitable, but they are extremely disruptive to established papers."
Murdoch had hoped to keep his bid for Dow Jones a secret, but ironically the story was broken by rival business TV channel, CNBC.
For News Corp to clinch Dow Jones, he must convince the company's controlling shareholder, the Bancroft family, to sell their holding.
"First let me state it would have been our strong preference to negotiate our offer in a private setting," Murdoch said. "Indeed, that was the manner in which we submitted it.
"Unfortunately, news of the offer leaked last week forcing all of us to deal with this publicly.
"I admire the Bancroft family and the new Dow Jones management.
"They have a great collection of assets including a great newspaper."
News Corp yesterday announced a record third quarter operating income of US$1.2 billion, a 23 per cent rise on last year's third quarter.
The company also stuck to its forecast of 14 to 16 per cent growth in operating income for the 2007 fiscal year.
Six of News Corp's eight operating segments achieved double digit growth in the third quarter, with its filmed entertainment division contributing US$410 million, a rise of 82 per cent, from the box office success of the Ben Stiller comedy, Night at the Museum, and DVD sales of Borat, the Devil Wears Prada and Little Miss Sunshine.
The third quarter result gave News Corp its "strongest balance sheet in the company's history with over US$7 billion in cash".
Murdoch said the takeover bid for Dow Jones would not halt News Corp's share buyback plan.
"We intend to complete the re-purchase of the remaining US$2.7 billion in News Corp shares authorised by our board," he said.
Murdoch added his company had the financial capacity to buy Dow Jones and complete the buyback.
"We can absolutely afford to reactivate our buyback and we intend to do so," Murdoch said.
One blight for News Corp in the third quarter was the World Cup cricket tournament held in the Caribbean. News Corp, which had the broadcast rights, took a $US50 million hit from the World Cup, largely due to the early exit of two countries with the biggest following - India and Pakistan. It led to reduced advertising and sponsorship.
"It is pretty unprecedented when Pakistan gets beat by Ireland," News Corp chief financial office David DeVoe said.
-AAP
