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NEW YORK - By the end of this week, the world's best-known chronicle of capitalism, the Wall Street Journal, will be owned by another company - something many thought would never happen.
For more than a century, the Journal's parent company, Dow Jones & Co, was controlled by
the Bancroft family. The family was long seen as unified in opposition to selling and at first rebuffed the extremely rich offer from Rupert Murdoch's News Corp, which valued the company at more than US$5 billion, well above where Dow Jones stock was trading.
In the end, Murdoch won over enough family members to acquire Dow Jones and its flagship paper.
News Corp formally seals the deal with a vote by Dow Jones shareholders on Thursday, but the outcome is assured since enough Bancrofts have made binding commitments.
Guessing how the sale will affect the paper has been the main topic in the publishing industry since August 1, when the deal was announced.
The first hints came late last week, when News Corp appointed a new management team for Dow Jones, including longtime News Corp publishing executive Les Hinton as CEO and Robert Thomson, editor of the Murdoch-owned Times of London, as publisher.
News Corp declined to make its executives available for interviews, but outgoing Dow Jones CEO Richard Zannino said Murdoch and his News Corp team were sure to bring a healthy appetite for risk to Dow Jones.
Murdoch's record of successful risk-taking is clear. His Fox News Channel eventually took over CNN in the ratings war among all-news cable networks, he has just launched a Fox-branded business news network, and the US$580 million News Corp paid in 2005 for the online hangout MySpace turned out to be a bargain.
One of the world's most respected publications, the Journal is also part of a company that many saw as having made key missteps, including ceding ground to Reuters and Bloomberg in the electronic delivery of news and financial data.
The Journal has gone through many changes in recent years, adding colour and lifestyle coverage, moving to a narrower format, launching a Saturday edition and building its website into the most successful paid destination of any newspaper. But more change is sure to come.
At the London Times, Murdoch and his lieutenants took another risk in moving to a "compact" or tabloid format, which many readers say they find easier to hold and read.
Thomson took over as editor of the Times in 2002, and the paper has outsold its competitors on the newsstand consistently over the past three years. Before that, he edited the US edition of the Financial Times, where he went up against the Journal.
British journalist John Andrews, who worked at the Economist for 24 years and now is a consulting editor there, said Thomson had "tightened" the Times and its smaller format was a success.
"The Times was in danger of losing a lot of its authority" at the time Thomson took over, he said. "It hasn't regained the authority it had in its glory days, but it's been a better paper under Robert Thomson's leadership."
As Murdoch announced the new Dow Jones leadership, he also clarified the line of succession at News Corp, naming his 34-year-old son James to a new senior role overseeing the media conglomerate's operations in Asia and Europe, putting him clearly in line to succeed his father, who is 76.
The younger Murdoch will also rejoin News Corp's board and relinquish his post as CEO of British Sky Broadcasting Group PLC, a satellite TV company in which News Corp owns a 39 per cent stake.
Even before the official handover to News Corp, Dow Jones has been moving to further transform itself and lessen its reliance on traditional newspaper advertising, which is widely seen as a threatened revenue source as ad dollars move to the internet.
Last month, Dow said it would expand the launch of a glossy lifestyle magazine called Pursuits to make it a global publication.
It also said it would complete its exit from the community newspaper business. Jim Ottaway jnr, whose family founded that business and sold it to Dow Jones, opposed selling to Murdoch and still plans to vote his family's 7 per cent stake against the deal.
Murdoch has given some general indications about his plans for the Journal but has declined to go into detail. He has said he wants to greatly expand Washington and national coverage to compete more aggressively against the New York Times and that he wants to expand the Journal's operations online. Murdoch also plans to expand overseas, particularly in Asia and Europe, where the Journal can go up against Pearson PLC's Financial Times.
Murdoch's investments in Dow Jones comes at a time of general contraction in the newspaper business. Lou Ureneck, of the journalism department at Boston University, said depressed newspaper stock prices and general malaise about the industry's future gave Murdoch an opening.
"I don't think this sale would have occurred 10 years ago. This is a window between a prosperous past and a likely prosperous future, and in that window Murdoch was able to gain this prize."
SHAKE-UP STARTS
* Rupert Murdoch's new Dow Jones executives:
* Robert Thomson: Editor of London's Times newspaper. Takes over as publisher of Dow Jones.
* Les Hinton: Executive chairman of News International, publisher of the Sun and the Times. Replaces Rich Zannino as Dow Jones chief executive.
- AP
