Mogul buys Dow, but where's Wall Street?

Rupert Murdoch is poised to land one of the biggest catches of his empire-building career.

But now that the question of whether he can acquire Dow Jones is near resolution, the next issue becomes pressing: What will he do with it?

The strategic reasons behind News Corp.’s acquisition are, depending on who you ask, either subtly brilliant or simply invisible.

With Dow Jones landing squarely outside the News Corp.’s U.S. entertainment business, the acquisition certainly goes against the prevailing logic of many congloms.

Forget the bleak prospects for the news biz; other congloms have been exiting any businesses that don’t fit well with their largest revenue-generators, no matter the category.

But a sale of its minority stake in DirecTV notwithstanding, News Corp. has spent several billion dollars on non-content properties like Web tools and platforms.

Now it looks to spend even more on a financial-news site — one that trails leaders like Bloomberg in market penetration. In a career marked by iconoclasm, Murdoch is again cutting against the grain.

Deal watchers have focused on how he may use Dow Jones and the Wall Street Journal to boost the Fox Business Channel, slated for an October launch. (Dow Jones has a deal with CNBC through 2012; though the net expects it to be honored, the agreement could be bought out.)

While Murdoch certainly would be helped by a financial-news source, how much he will accomplish with an acquisition that he couldn’t have achieved with a licensing deal remains unclear. On a panel earlier this month, media consultant Norman Pearlstine memorably noted that “just because you want a drink doesn’t mean you have to buy the bar.”

Murdoch is thought to be considering ways to move the chess pieces so that Dow fits with News Corp.’s other assets.

Observers say they expect the website of the Journal to change markedly under Murdoch.

While the site has been one of the few great success stories of a print-to-Web transition for a daily newspaper, its functional layout suggests to many experts that it — and maybe even the layout of the paper itself — could be in for an overhaul.

At the very least, observers say, look for a better combination with Dow Jones Newswires, which now shares almost no public presence with WSJ.com.

Murdoch, of course, must still convince a hardened group of Bancrofts to sell the company. The family is skedded to meet at the offices of its attorneys on Monday.

Opponents of the sale have said they don’t expect Murdoch to wait long before shaking up the Wall Street Journal, possibly with newsroom cuts.

But Murdoch has vowed he will increase, not lower, investment in editorial; in a letter to the Bancrofts, he used phrases like “continue to promote journalistic integrity at Dow Jones and in the world” and “maintain the heritage of independence and journalistic integrity.”

And supporters have said News Corp.’s cash-rich coffers ensure that the company could avoid the cost-cutting another owner might find inevitable.

Murdoch devoted no fewer than five items in his letter to the Bancrofts to international expansion, saying he would “expand, where appropriate, Dow Jones’ editorial presence in emerging Asian markets” and utilize News Corp.’s distribution platforms in Asia and Europe to better promote and market Dow Jones’ products and services.”

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