Posts about newscorp

Why The Daily is counting its days

The Guardian asked for my take on the death of The Daily. Here it is (with links that fell out on the way to London):

On Twitter, I’ve already been accused of schadenfreude over the death of News Corp.’s soon-to-die, pay-walled, tablet-only, once-a-day news venture called The Daily.

Not so. I’d have loved to have seen an online-only news service make it. But The Daily was, in my view, doomed from the start because of all the adjectival modifiers listed above.

First, the pay wall: News Corp. proprietor Rupert Murdoch has elevated charging for content to a religion. He says people should pay for his products (though I’ve never seen a successful business plan in a competitive market built on the verb “should”). He turned his Times from an internet presence of note into a footnote because he insisted upon putting it behind a wall.

With The Daily, Murdoch wanted to prove that he could start and we would buy a news product online. But he forgot a key lesson of selling subscriptions, one he surely learned when he owned magazines: that it takes a lot of marketing expense to acquire customers. It costs money to charge money.

When it started, I calculated that The Daily would need to net at least 750,000 subscriptions — 1 million when accounting for cancellations (aka “churn”) — to break even on an operating basis, what with a share of sales going to Apple on the iPad. Murdoch promised he would sell “millions.” In the end, it reached 100,000 subscribers, not nearly enough to compensate for a reported $30 million in development cost and $500,000 per week burn rate.

Mind you, I am not against charging for content. I will happily sell you my books. But The Daily wasn’t much worth paying for. Though it looked quite nice and its content was competent, that content was all-in-all just news and news is a commodity available for free in many other places. Larry Kramer, publisher of the much-larger USA Today, just said with admirable candor that he can’t put up a pay wall online because his product “isn’t unique enough.” Ditto The Daily.

Next, The Daily started as an iPad-only offering. Eventually, it branched out to the iPhone and to Android tablets (but only for Verizon telephone customers) and the Kindle. I hope that other publishers learn from this misguided “mobile” strategy. Too many have dreamed that the tablet would return to them the control over brand, experience, and business model that the web and its links took from them. Too many think they need to create new products just for so-called mobile devices (though we actually often use them when stationary, at desk or on couch).

No, a news organization should have a strategy built around relationships with individuals, serving them wherever, whenever, and on whatever platform they like. My needs don’t change just because the device in my hands does.

Finally, there was the absolutely befuddling decision to make The Daily daily. News was only ever daily because it was forced into that limitation by the means of production and distribution of print. The internet freed us from those shackles of time. Why put them on again? Nostalgia?

In the breakup of News Corp. that is the real outcome of the London news scandals and the Leveson inquiry, the new company had to start cleaning up its books, getting rid of money-losing ventures. The Daily was the first to go. But there are more in that stable, starting with the New York Post, which loses, by one account, $110 million a year just to give Murdoch what he has long called his “bully pulpit.” Now he has a bully pulpit with almost four times more subscribers for free on Twitter. Can The Post’s obit be far behind?

What’s next for News Corp. and its worlds

There’s no telling how the News Corp. saga will turn out, but I’ll try. Here’s a scenario that leads to the breakup of News Corp., the Murdochs out of power, the deflation of institutional journalism, a break in the too-cozy media-government complex, an unfortunate rise in regulation of media, and a fortunate opening for newcomers. This story of legality and morality will quickly shift to one driven by business.

A week ago in HuffPo, I speculated that News Corp. would need to get out of the news business. Not so crazy. Since then, the FT’s John Gapper speculated similarly, as did John Cassidy at The New Yorker.

And since then, News International head Rebekah Brooks resigned and was arrested; Dow Jones head Les Hinton resigned; Murdoch gave up on BSkyB; the Murdochs agreed to testify before Parliament; and the revelations of corruption between News Corp. and police and government get only worse, leading to the resignation of the head of the police. What looked so far out doesn’t look so far out now. So how could this progress?

* Start with the end of a Murdoch succession plan. Rupert’s defense aside, James Murdoch’s handling of the scandal has been irresponsible, short-sighted, cocky, and dangerous. The trail of scandal is lapping at James’ feet. Whether or not he is investigated or arrested for crimes, there can be no confidence in his leadership. None of his siblings is in any better position and they are feuding anyway. Rupert Murdoch is looking more lost and his testimony Tuesday at what will appear (to Americans, at least) like an impeachment hearing will only implode his stature yet further.

Meanwhile, more importantly, News Corp. lost more than $7 billion in market cap over four scandal-filled days. That number may go up or down but it’s ominous in any case. Shareholders are suing. There will be a call for professional and independent management of the corporation, sooner than later. If I were an “independent” director of News Corp., I’d be scared to death right now.

Buh-bye Murdochs? As unthinkable as that may have been only two weeks ago, it’s now quite conceivable.

* Off with the headlines! That professional management will quickly conclude that the news divisions of News Corp. are a costly drag and will try to divest them, starting with the UK properties and then spreading elsewhere. News Corp. is an entertainment company. Professional management will focus on that and get rid of Rupert’s bully pulpits. If they previously did bring clout and regulatory convenience to the Murdoch’s business strategies, now all they bring is grief and the attention of lawmakers, prosecutors, competitors, and detractors. News is clearly not a growth business; it is, as a friend in the trade said, profit-challenged. So stop the presses already.

I said in my post last Monday it may be difficult to find a market for the properties. But they become costlier to News Corp. by the day, so the desire to unload them will only grow as their value declines. In the UK, the Sun has been eclipsed online by the Daily Mail. Murdoch gave up on strategies of growth and advertising when he put The Times behind a paywall, its audience shrinking from millions to a reported 100,000. An egotistical oligarch might buy either.

* In the U.S., the right-wing depends on Fox News and is surely getting nervous about its fate. It is becoming — if one can imagine this — even more of a laughingstock than it already was as it ignores or defends Murdoch in the scandal. I could imagine Roger Ailes assembling rich Republicans to engineer a leveraged buyout and keep it safe for them in time for the election. Then there could be no doubt of its role as a propaganda arm of the right.

The New York Post loses tens of millions a year and lives only to give Murdoch his toy and pulpit. Professional management cannot justify that. It will die or find its egotistical oligarch (its Conrad Black or Robert Maxwell … I cannot imagine even the Murdoch heirs allowing their patriarch to hold onto it and eat into their fortune yet further).

The Wall Street Journal is in quite the pickle. Again, professional management will want to get rid of it because it is not a good business; its ROI, if any, is worse than The Simpson’s. But who would buy it? Recall that no one else but Murdoch would buy it for the price he offered, an overeager amount he soon had to write-down. Last week, I suggested that if Murdoch wants to rescue the last shred of his legacy, he should put the Journal into a trust, a la the Guardian and its Scott Trust. Past that, it’s hard to imagine its fate. Would Bloomberg or Reuters buy its financial data businesses? Is there a fire-sale buyer for the paper and its web site? They’d better hurry before it is ruined by delusional editorial such as this one defending Murdoch.

News Corp. is also in the business of coupons and circulars distributed in newspapers. That business, too, will shrink as those transactions go digital and mobile. I’ve been told by major marketers that their need for FSIs (free-standing inserts) will disappear within two years — another blow to newspapers’ kidneys. Someone will buy that business to consolidate the trade. Though it, too, has News Corp. cooties. David Carr says this division has paid out $655 million to get rid of charges of espionage and anticompetitive behavior.

In publishing, that leaves HarperCollins. Murdoch tried to sell it sometime ago; no such luck. Who’d buy it now? I couldn’t imagine. (Disclosure: My last book, What Would Google Do?, was published by HarperCollins. My next book, Public Parts, was set to be but I pulled it when I found myself being highly critical of News Corp. as the antithesis to a company that operates openly.)

There’s been much speculation that illegalities abroad — or, if they are found, in the U.S. — could lead to News Corp losing its domestic TV licenses. I don’t think that would happen. If professional management replaces the Murdochs and the scandal-ridden news divisions are ejected, then it’s hard to imagine the FCC — which basically never revokes licenses and would take a decade to try — pushing News Corp. out of the local TV business. Besides that, there is nothing I’d call news on Fox stations. They are entertainment distribution outlets.

* The only thing left in the publishing arm is Australia. Various politicians of lesser or greater power are calling for reconsideration of the incredible newspaper holdings Murdoch has there. I could see the company holding onto this for old time’s sake if there isn’t too much political pressure. Or I could see it being spun off to family, again for old time’s sake.

* So then News Corp. would be an entertainment company and a successful one.

* The next big impact will be regulating journalism in the UK. As I said here, I would lament that. The regulators didn’t bring Murdoch to the bar; journalists did — namely Nick Davies of the Guardian. We don’t need more controls on journalism. We need more journalism.

In the US, you can bet we’ll hear more about regulating media consolidation. But that’s not the issue. Morality is.

* I believe the biggest long-term impact of l’affaire Murdoch will be the diminution of institutional journalism and its cozy relationship with institutional government. That is good news. It opens opportunities for independents: for us.

* None of this could happen. Murdoch will hold on as long as he can — witness Murdoch’s “interview” with the Wall Street Journal claiming that the company has handled all this well and also the denial in the Wall Street Journal editorial just published, which tries to shift the blame for shoddy journalism to Murdoch’s competitors and critics. The longer Murdoch holds on, the less his empire will be worth. Just how stubborn is he?

: LATER: Bloomberg says News Corp is worth 50% more without Murdoch.

By valuing each of News Corp.’s businesses separately, the New York-based media conglomerate would be worth $62 billion to $79 billion, estimates from Barclays Plc and Gabelli & Co. show, indicating News Corp. trades at an almost 50 percent discount to its units. . . .

“There’s just sort of this generic Murdoch discount, which encompasses the concern that he will make decisions that are not consistent with other shareholder interests,” said Michael Morris, an analyst at Davenport & Co. in Richmond, Virginia. “The sum of the parts on News Corp. is huge compared with where the stock trades.”

A true threat to privacy

Among the most deliberate and abhorrent mass violations of privacy committed in recent memory did not come as a result of technology, social services, databases, hackers, thieves, leakers, or governments. It was an act of a news organization, News Corp., which hacked into the phones of a reported 4,000 people, including not just celebrities but dead children and the families of the victims of terrorism and war.

Power corrupts.

The oh-so-rich irony is that this comes from the same company that, through its Wall Street Journal, fancies itself the protector of our privacy. The Journal would have us believe that web sites, technology companies, advertisers, and retailers are the enemies of privacy. No, it was their own corporate colleagues, their fellow journalists.

The solution to this threat to privacy is not to change technology or even the law. It is to enforce the laws, norms, and mores that already exist and hold to account the criminals and those responsible for their actions. That is, the managers of News Corp. That is, the Murdoch family.

This is not a matter of technology but of corruption.

Killing the offending News of the World is — I agree with the Guardian — a deeply cynical act. Some relatively small number of the paper’s employees was responsible for these acts — they’re presumed to be gone already. Now all of them are out of a job. Now a 168-year-old newspaper is dead — and it’s not as if we have any to spare. But the bosses responsible for the coverup remain.

The Murdochs apparently believe that they have amputated the offending limb and that’s that. But the toxin still flows in the bloodstream.

Mind you, I’m not your stock Murdoch basher. I worked for News Corp. in the ’90s, when I was TV critic at TV Guide, when the company owned it. I launched a magazine there and then went to work briefly at Delphi Internet when the company bought it (escaping in the nick of time before the first of many News Corp. internet disasters ensued). When News Corp. bought Dow Jones, I told reporters that I had not seen interference from Murdoch the way I had at revered Time Inc. That is to say, I defended Murdoch.

A further disclosure: My next book, Public Parts, was to be published, like my last one, by News Corp.’s HarperCollins. But I pulled the book because in it, I am very critical of the parent company for being so closed. It’s now being published by Simon and Schuster.

One more disclosure: I write for and have consulted for the Guardian, which has dogged this story brilliantly and triumphally.

Now having said all that, I’ll say this: News Corp. and its culture are simply corrupt. I’ll ask you this: Could you imagine such crimes occurring at Google? Wouldn’t these crimes mortally damage its brand? Could you imagine News Corp. taking Google’s pledge to do no evil? Those are rhetorical questions. The answers are obvious.

I’m most appalled that News Corp.’s crimes occur under the banner of journalism. Ah, professional journalism, which holds itself up above the supposedly nonexistent standards of bloggers and mere citizens and witnesses. Journalism, here to protect, educate, inform, and represent us.

I doubt we’ll end up with a Nixonian moment: What did Rupert know and when did he know it? But we can’t say the same for his son, James. See the Guardian’s annotation of James’ statement today (a new form of journalism, by the way), which only raises more questions. He is in charge of News International, the offending division. He is set to take over the company. The company is almost set to take over Sky.

I’m generally a critic of regulating speech and thus media. But the UK regulates media and I can’t imagine a better time to do so. What will the government do? If it allows the Sky acquisition to go through, then it makes a lie and laugh of its authority. Meanwhile, what can the profession do to amputate this diseased arm, News Corp.?

I know I sound strident here. I know some will properly accuse me of being late to the bonfire, having just confessed that I’d defended Murdoch. But the two go together. I was willing to give the Murdochs their rope. Now they’ve hung themselves with it.

The story’s a long way away from America. But News Corp. isn’t. Now all of us who live under its influence deserve to ask what they will do to fix the company’s corrupt culture that allowed these crimes. We can ask. But I don’t expect answers.

Daily economics

I have not seen News Corp’s Daily (I was invited to the preview last night but travel, exhaustion, health, weather, and thus prudence had me take the train home and I couldn’t get in today because of the ice). So I have nothing at all to say about the product. I am trying to get my head around the economics and I hope better mathematical and business minds than mine will analyze what it will take for the Daily to succeed.

Rupert Murdoch said the Daily went through $30 million in development costs that are already written off. He said operating costs will run $500,000 a week. So in the first year, the Daily will cost roughly $55 million. That’s a lot. For comparison, Portfolio went through somewhere between $40-100 million. I said we’d never see another publication launch of that scale. I was wrong. Also for comparison, News Corp’s abortive aggregator, Project Alesia, went through a reported $30 million.

Let’s say that circulation covers the costs of the Daily — since getting consumer revenue is the real point of the exercise — and that advertising is profit. Note well that I have *no* reason to believe that’s News Corp’s strategy. It simply makes it easier to illustrate the economics and the questions I hope other reporters tackle.

The Daily is selling for $1 a week or $40 a year.

So how many subs would they have to sell to break even on the $500k/week cost? (Note that’s break-even on an operating basis, not on the total investment.) It’s a bit more than 500k subs at $1 each for the reasons below.

Figure that Apple is taking something less than its normal 30% share for the privilege of having the Daily. Murdoch said that it will be ported to all major table platforms but then he said that last year, this year, and next year “belong to Apple.” (I have no idea whether he means that metaphorically or contractually.)

Figure also that there will be churn as there has been in iPad magazine sales. That means — as it always does with sub sales — that one must sell new subscriptions to replace cancellations to reach your magic number. Let’s say the Daily loses–and I’m pulling this number out of a hat– 10% a month, which it needs to replace. So if you’re selling 100k this month, you need to sell 110k next month to get to 200k and 120k the following month to get to 300 and so on.

I’m not qualified to run these numbers; I wish someone with circ experience would. But to pick another number out of the hat, let’s say that the Daily needs 750k net subs to hit cash-flow break-even because around 25% of circ revenue goes to Apple and half the subs are sold at the 20% discount. With churn, they’d need to sell a total of up to 1 million gross to reach that number while accounting for a subscriber acquisition (marketing) cost of, say, $10 (which is light but given Apple’s promotion, probably not unreasonable).

I picked 750k because it’s somewhere in the ballpark — Murdoch said he eventually plans to sell “millions” — and also because it leads to an easily rounded number for marketshare: The Daily would capture about 10% of the installed base of iPad owners today (though that’s a worldwide number, so the U.S. figure would be higher). That’s pretty high.

For comparison, Wired sells about 22k issues a month on the iPad, down from a debut of 31k, Glamour sold 2,775 in November, losing 20% a month from the prior two months (even as iPad sales soared)–note the higher churn number than I used above. So the Daily would need to sell roughly 34 times the sales of Wired. But it is daily and not monthly.

Now switch to advertising. The market will be small for sometime. I’m told these days that major brand advertisers won’t pay attention to a site until it gets 3 million audience. Then again, the value of tablet advertising is supposed to be high and advertisers like the experience. I also wonder whether the ads will also go through Apple and it will again take a share of a quarter to a third. There are so many variables in advertising–unique users per day; time spend and pages and ads views; avails per page; measurement of ROI (is there click-through?)–that it’s nigh until impossible for me to guess at the revenue. But I throw this out, again, in hopes that someone will tackle it.

Once more: I have NO figures other than the two Murdoch gave. I have ONLY questions. I hope the Daily is profitable; I hope any new news venture is profitable. I’d simply like to have a better idea of what it will take to get there. Anyone want to help? Please DO tell me where I and my assumptions are full of crap and please DO add experience and data. I just want to understand the dynamics of the business.

: Folks on Twitter are saying that I say the economics of the Daily don’t add up. I am not saying that. I simply want to see the addition.

My dinner with Rupert

The note slipped under my hotel room door read: “You have been invited to join Rupert Murdoch at his table tonight.”

What a hoot, huh? I was in Monterey this weekend moderating a panel for a worldwide meeting of Murdoch’s newspaper and online execs, plus folks from Fox News and Sky News, about 60 in all. As one of Murdoch’s own papers reported, this confab was called for the various divisions to get together to share best practices and plans in digital strategy. There’s nothing earth-shattering in that; any company should be doing this and I suspect what I heard at this gathering would be much like what I’d hear at other such meetings. But as one other outside attendee — a journalist who, oddly, wanted to keep his presence on the QT — said to me: If this were a meeting in his own company, he’d growl about having to go. But going to somebody else’s meeting is kinda fun: corporate voyeurism without the fear of saying something wrong and getting fired. Of course, the meeting was essentially off the record; I wouldn’t share any business details just because I was a guest, any more than I’d share a consulting client’s private plans. So if it was just a company meeting and I’m revealing no secrets, why blog about it at all? Because various of you, in comments and emails, wanted me to. It’s Murdoch, after all. Moguls are fascinating. And he’s all the more fascinating having just bid to buy Dow Jones. So here are a very few atmospherics and observations from my weekend with Rupert.

Murdoch began the meeting exhorting his executives to make a huge leap in a completely different world. I do believe he means it. As in any media company today, it’s not clear how much the rest of the culture yet means it. That’s why companies hold meetings like this, to make them understand that, indeed, the boss really does mean it.

My role was to wrangle Gawker’s Nick Denton and Facebook’s Mark Zuckerberg in a panel that was meant to show these guys how we renegades look at the new world. Claiming moderator’s prerogative, I began with my commandments for the new world — basically, a four-minute distillation of all my blatherings about the strategic imperatives for newspapers in this blog and my Guardian column (lucky them, they didn’t have to read any of it). As I talked about the ability to grow through collaboration and links and the need to find new efficiency and to turn the newsroom inside out, I saw scattered head-nodding and brow-furrowing in equal proportion around the room. Murdoch himself was nodding a lot. As I ended my uncharacteristically brief spiel, he held his hands out to applaud, cocked and ready. Then he saw that no one else was going to do likewise, so he dropped them. I took that as an ovation.

Denton and I got into a few theatrical squabbles — show, mainly — over how new this new stuff really is; I’ll spare you. Zuckerberg impressed the room with his thoughtful focus, just as he did in a similar roomful of media executives at Davos. He’s clear and direct and that’s refreshing. I heard from many of the execs how impressed they were with him. Said one: ‘I told him that I think he’s one of the few who really understands just what he did.’ But Denton and I were also standing nearby as a newspaper editor asked Mark what Facebook is and then asked him whether anybody had tried to buy him. Denton practically spewed a spit take. Naw, nobody‘s interested.

At that dinner that night, I might as well have been the waiter. Murdoch sat next to Zuckerberg and he was clearly enchanted; they stayed head-to-head all through the meal. Mark left to get back up north and in a flash, MySpace founder and now Murdochian Chris DeWolfe came dashing over, as if he were jealous of the attention Dad had given that other kid. Murdoch then moved down the table and I asked, only half-joking, whether he’d just bought Facebook, too. No, in Zuckerberg, I think Murdoch sees a fellow mogul in the making.

The next morning at breakfast, one of the execs leaned over to me and pointed to Murdoch at a table across the room. ‘I’d love to have a picture of that,’ he said as Murdoch pored over the weekend edition of the Wall Street Journal. Oh, I, too, was tempted: that craggly brow peeking out over that staid masthead might have been the media picture of the year. But I resisted. If I didn’t, I’d never get invited back to dinner.

While we were there, newspapers — piled up outside the meeting room door each morning — were filled with stories about Murdoch and the Journal, each trying to guess what he’d do with Dow Jones and how the companies would combine. Which leads me to the only real point of this post: The News Corp. culture. It doesn’t seem to have changed much since I was there, at TV Guide, in the mid-90s. One senses the Australian roots. They’re direct, friendly, unpretentious. I don’t sense the same foreboding of death by dagger or high-heel I’ve seen at the other media companies where I’ve worked: the torture by task force of Time Warner, the palace intrigues of Conde Nast, the woodshed sternness of Tribune. The good and the bad of News Corp., I’ve long said, is that they fly by the seat of their pants: They make decisions quickly and decisively and some are brilliant and some are not but at least you can get a decision and move on. Now, of course, you can disagree with those decisions. But I would reassure the people at Dow Jones that this is not the News Corp. of fable. Murdoch is not an ogre. He’s a gracious and charming mogul. And the reason his people like working there is that he leaves them to operate more independently than I’ve seen in other companies — so long as they succeed, of course. Lots of them become lifers.

So I’m in league with Andrew Ross Sorkin in The Times today as he tries to allay the fears of DJ employees about their potential new boss. Is’s a rather remarkable endorsement of Murdoch’s bid:

With some hesitation, given Dow Jones’s storied place in American journalism, let me explore a contrarian view: Mr. Murdoch may be the perfect publisher of The Wall Street Journal. . . .

But an uncomfortable truth remains. The current state of financial affairs — caused by the continuing withering of print advertising revenues, shifting reader demographics and the seismic upheaval of the Internet — has made it extremely hard to continue “maintaining the quality” of The Journal (despite its clutch of Pulitzers) because sources of fresh investment funds are drying up. Dow Jones’s cash reserves have been further strained by the hefty dividends the Bancrofts have pushed for over the years. (Big dividends are in vogue in some newspaper quarters; The New York Times Company, for example, recently raised its dividend.)

So along comes Mr. Murdoch, who says he plans to invest more money in Dow Jones than anyone else imaginable. . . .

As they confront their continuing financial challenges, the Bancrofts can sit around and pray that a deep-pocketed white knight emerges — Warren E. Buffett, Bill Gates or The Washington Post are said by insiders to be favored choices — but it’s hard to think that even if such potential suitors did buy it they would seriously invest in the business the way Mr. Murdoch claims he would. It could result in just another holding pattern. . . .

If the family cares about preserving the Dow Jones legacy and seeing the company continue to flourish, it’s time to be financially creative. Rupert Murdoch is knocking on their door.

Yes, that’s what this meeting and the last week were all about: investing in the digital future of journalism. Someone has to do it.

: LATER: Media Bistro FishBowl went about 10 miles too far with this headline. I thought I couldn’t have been clearer that I was joking with my question.

Girls of the Fortune 500!

The home-page headline for a fine Richard Siklos story wondering what kind of proprietor Rupert Murdoch would be over the Wall Street Journal doesn’t reflect the article underneath but does reflect the Times’ attitude toward Murdoch:

Wall Street Journal Weighs Life Under Rupert Murdoch
The media baron is known to take a hands-on approach to his politically barbed and sometimes racy properties.

Yes, I can’t wait to see how he makes the Journal racy. Something to do with glass ceilings, I’ll bet.

: By the way, I’ve shocked a few reporters this week when I told them that I got far more editorial interference due to business interests while at Time Inc., as a critic for People and the founder of Entertainment Weekly, than I ever got as TV critic for TV Guide in News Corp. At People, the head of HBO would regularly trying to behead me, back in the early days before HBO became the best network in TV, when it reveled in cable’s freedom to show bare breasts. A business exec also made a point of telling me that my bad review for a treacly Hallmark Hall of Fame show cost the magazine its advertising. My editor, Pat Ryan, protected me from that corporate pressure; other executives did not. At Entertainment Weekly, as I’ve recounted here before, top editors at Time Inc. — all gone now — complained, just as the company was merging with Warner Brothers to become an entertainment conglomerate, that we were being too mean to entertainment; they actually sat down and calculated the grade point average of our reviews. But as the TV critic at TV Guide, I never received pressure to be nice to any Fox shows.

(Disclosure: I’m headed to Monterey to run a panel at a Murdoch meeting of newspaper execs.)

Murdoch makes the move

He has been known to be lusting after Dow Jones for years and now Rupert Murdoch has struck: a $60 per share, $5 billion, 67-percent-premium bid for the company. Whether the price is smart, I have no idea. But if you’re going to go after an old newspaper company, I’d say this is the one because it’s really more of a data than a newspaper company and it’s national. It’ll be interesting hearing the chatter over drinks here (where I’m headed later this week). Says the Journal itself:

The bid comes at a critical time in the newspaper industry, when defections of readers and advertisers to the Internet has sharply eroded newspaper profits and raised doubts about the industry’s long term future. In the past year two newspaper empires, Knight Ridder Inc. and Tribune Co., have put themselves on the market after pressure from restive shareholders. Knight Ridder ended up being bought by McClatchy Co. while Tribune decided to go private in an $8.2 billion transaction backed by real estate magnate Sam Zell.

The mere possibility that News Corp. owner Rupert Murdoch could get control of The Wall Street Journal is almost certain to spark a firestorm of controversy. Critics are likely to see his potential acquisition of one of the nation’s most influential newspapers as an unacceptable extension of his already formidable media sway.

That last bit certainly seems to be the wishful thinking of the reporter. Hooey, in other words. Unacceptable to whom? There are no crossownership rules on cable channels, movie studios, and national newspapers. Nice try, Martin Peers.

The Times reports:

The news had a ripple effect across the media industry today. Shares of media companies rose broadly in trading today, with stock of Reuters, Gannett and The New York Times Company all posting unusually high gains.

I know some will say that the newspaper industry has been down for so long it finally looks like up. See the current cover of Worth witih coverboy Mark Cuban: “New Money Rediscovers Old Media.”

But I still think these properties are a difficult long-term play. There are lots and lots of short-term efficiencies to be found. But what then? If you don’t have an aggressive strategy and investment in turning these businesses completely inside-out, then what’s your aftermarket?

So what can Murdoch do with Dow Jones? He can start one helluva financial news channel now. He can build out an online powerhouse from a solid base. He can make it yet more international.

: Bloomberg recalls:

Murdoch has coveted Dow Jones in the past, though at a February conference organized by McGraw-Hill Cos. in New York, he said he was “cooling on it.”

“I worried about it,” Murdoch said. He said he would have done “something different” with the Wall Street Journal online version.

“The Journal’s opportunity — it’s got a wonderful brand — is to go after the New York Times nationally,” Murdoch said.

It was at that same conference that Murdoch first said he planned on launching the financial news channel this fall.

: CNNFN says there won’t be a rash of newspaper buying:

Benchmark’s Atorino said Tuesday’s rise in other newspaper stocks may be an example of short sellers, investors who bet a stock will go down, covering their positions in order to avoid losses since newspaper stocks are rallying on the takeover speculation. He is not predicting a wave of deals though.

Grimes agreed. He said a News Corp. purchase of Dow Jones is a unique situation since he thinks Murdoch is mainly interested in The Wall Street Journal – especially since News Corp. has already announced plans to launch a business news channel to rival CNBC.

“For Murdoch, this is an opportunity to develop an even greater worldwide brand. It just makes perfect sense,” Grimes said.

: From CNBC (which ought to be very nervous about this):

CNBC’s Jim Cramer said Murdoch has been interested in Dow Jones for at least a decade and believes he has a better chance of securing a deal now. Murdoch called Cramer in 1996 when Dow Jones was trading in the 40’s — higher than it’s trading now — and asked him whether he should make a $73 a share offer for the company, Cramer said on CNBC.

“I suggested at the time that the family would reject it,” Cramer said. But “ten years have passed and the stock is down substantially from when he wanted to make the bid…It’s clear to me that the pressure on newspaper is so great that this time, so much better than 1996, he has a shot of pulling it off.”

Cramer also said there has always been a sense that some of the Dow Jones board members are tired of the low stock price.

Mort Zuckerman, chairman of Boston Properties and publisher of the New York Daily News, called the News Corp.’s offer a “brilliant move.”

“He’s starting a business channel and he’ll be able marry this (proposed acquisition) to the business channel,” Zuckerman told CNBC. “And he offered a price, recognizing what capital gains rates are now, that’s hugely attractive for a lot of members of the Bancroft family who have been unhappy with the way the stock has performed.”

: Yes, The New York Times is vulnerable to attack and Murdoch would love to do the attacking.

: I forgot until an NPR producer reminded me that the Journal and CNBC have a long-term deal. But there’s still plenty of other assets in Dow Jones that could work with the Fox news channel. And there are always escape clauses.