Seven Questions: Rupert Murdoch Strikes Again

HECTOR MATA/AFP/Getty ImagesDoes this man look nervous? Rupert Murdoch is embracing the newspaper industry at a time when other media players are running scared.

FOREIGN POLICY: Why is Rupert Murdoch moving for Dow Jones and the Wall Street Journal now?

Devin Leonard: The Wall Street Journal is a property hes always wanted. Along with the New York Times and the Washington Post, its one of the best, most influential papers in the United States and its franchise extends to Europe and to Asia. For the longest time, the paper wouldnt have been for sale, but now theres a lot of uncertainty about newspapers. Its not circulation. Circulation is flat or its declining slightly. The problem for newspapers is the exodus of advertisers fleeing to the Web. You might say Murdoch is a shark who smells blood in the waterits the time to bite.

FP: Does Murdoch have the solution to these problems?

DL: He certainly has a bigger vision for the Wall Street Journal. Its not just the newspaper thats important to him; hes using the Wall Street Journal to brand the financial cable channel hes launching. Hes also a lot more Web-savvy than a lot of other media company CEOs. His purchase of MySpace.com raised a lot of questions at the time, but now it seems like a home run. Murdoch sees the bigger picture, and he certainly sees the bigger picture internationally.

FP: So does this takeover show the way the new industry is going?

DL: I dont know if its something everyone can replicate. Its more a matter of Murdochs vision for his company, News Corp. Think about News Corp: They have a Hollywood studio, satellite TV distribution, and newspapers around the world. The Washington Post Company and New York Times Company are largely organized around one newspaper each. News Corp has tentacles all over.

FP: How do you think the average Wall Street Journal reader feels about Murdoch taking over?

DL: I cant see how theyd really care all that much. In liberal circles in the United States, people are saying Oh my God, hes going to take it over, hes going make the paper more conservative! Have any of these people read the editorial page of the Wall Street Journal lately, or at any time in the last couple of decades? Arguably, the editors are more conservative than Murdoch!

FP: A lot of people say that he took The Times of London down marketisnt that a danger here?

DL: When I look at The Times of London, it seems as good as the quality papers in the United States. Its all in the eye of the beholder. Plus, I think its harder to manipulate business news than political news. Business coverage is much more numbers driven. You have an audience thats counting on making business decisions based on the information in the Wall Street Journal. If youre giving them twisted or inaccurate information, theyll cancel their subscriptions. So it would be bad for business.

FP: In 10 years time, will people look back on this as a watershed in the news industry?

DL: Its possible that in 10 years people will be saying Wow, Murdoch was so smart. When everybody else was fleeing the newspaper industry, he made big investments and they paid off. But one of the things you have to give Dow Jones/Wall Street Journal credit for is their Web site. The Washington Post gives their content away for free; the New York Times gives most of theirs away for free, too. The Wall Street Journal has a lot of subscribers, and theyve managed to make people pay for the product. That suggests theres an after-print future for the publication, and Im sure that appeals to Murdoch.

FP: So what does he bring to the equation?

DL: I think if you can combine Murdochs upcoming financial cable franchise with that Internet franchise, there could be a way of doing business that nobody else has thought of. Others have tried it, but Murdoch has more distribution. He has a lot more pieces to play with than his competitors. And he has a big vision. That puts him in a different league.

Devin Leonard is a senior writer for Fortune magazine. He covers the business of entertainment and media and writes the Media Bubble column.

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