Dow Jones journals MarketWatch win

Acquisition ends bidding war for the Netco

Dow Jones is paying $519 million to acquire financial news Web site MarketWatch and plans to end its licensing agreement with CBS.

Acquisition ends a heated bidding war for the Netco that included other high-profile suitors such as Yahoo!, the New York Times, and Viacom, which has a 22% minority stake in the company.

It also means that CBS will soon see the end of its partnership with the site, branded as CBS MarketWatch. Dow Jones plans to end MarketWatch’s licensing agreement with CBS when it expires next year.

Expiration will end a $3 million annual payment MarketWatch made to the Eye net for use of its name.

Dow Jones hopes to continue syndicated TV and radio skeins that MarketWatch and CBS co-produce.

Agreement calls for Dow Jones to pay $18 per fully diluted share for MarketWatch. Total costs for the Netco’s assets is $463 million, plus an additional $56 million for its cash on hand.

That’s on the high end of what many analysts expected and reflects Dow Jones’ confidence in the booming online advertising market.

Media conglom, whose primary asset is the Wall Street Journal, makes the bulk of its Internet revenue through subscriptions to the Journal’s Web site. With its free content, MarketWatch reaches a significantly larger and less-affluent audience, letting Dow Jones appeal to a broader base of advertisers.

“We see this acquisition as allowing us to continue to reap the benefits associated with a paid business model while also reaching the broadest possible audience with a network of free and paid sites,” said Gordon Crovitz, prexy of Dow Jones’ online publishing division.

MarketWatch has a monthly audience of 7.6 million users, while the Wall Street Journal online attracts 2.8 million individuals. Company estimates 1.1 million users overlap between both sites. Combined, the Dow Jones/WSJ network will be the third-largest financial news resource on the Web after Yahoo and MSN’s finance sections.

MarketWatch stock closed up 8% at $18.12, while Dow Jones shares rose slightly to $45.10.

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