KEY POINTS:
A Rupert Murdoch-controlled Dow Jones will have some key advantages over competitors: scale, financial resources and a little extra time to figure out how to grapple with new media trends.
As investors heap pressure on newspaper publishers to find a way to captivate audiences that are moving to the internet, Murdoch will be able to invest in Dow Jones and its Wall Street Journal, cut costs and insulate the business within his larger media empire, analysts say.
Competitors from the New York Times to financial news providers Bloomberg and Reuters will need to form new distribution alliances to compete against the global network of Murdoch's News Corp.
"They've got to be looking at the whiteboard and saying, 'What are the content assets we have?"' said Outsell media analyst Ken Doctor. "They have got to do that analysis of where they're strong and where they're weak, and then say, 'How do we find the customers, wherever they are?"'
Since the US$60-a-share offer for Dow Jones was disclosed three months ago, News Corp stock has slipped just 5 per cent in a sign its investors think the deal will work out well.
That is despite concern among some analysts about the "irrational" 65 per cent premium Murdoch offered.
The companies announced a deal for US$5 billion last week.
"If you assume that Dow Jones was sufficiently valued by the market at, say, US$3.5 billion before the merger ... let's say maybe he can get a half-billion dollars of synergies out of itfor the Fox channel or printing orglobal news," said Alan Gould, ananalyst at Natexis Bleichroeder.
"So let's say that Rupert overpaid by US$1 billion - over three billion [News Corp] shares, that's US33c a share. It's not a big deal."
Dow Jones also publishes MarketWatch.com, a website geared to consumer audiences, the Barron's business weekly and Asian and European editions of the Wall Street Journal. But the Journal's influence wanes outside the United States.
News Corp, with newspapers and television networks stretching from Sydney to New York, has the power to amplify those publications' voices around the world through its BSkyB network, Fox and other online and television outlets.
Murdoch has said Dow Jones would also fuel a new Fox business channel he will launch this year, but a contract between Dow and dominant financial TV news provider CNBC could complicate that relationship. Their deal expires in 2012.
"News Corp is a very global company, and Dow Jones, despite a lot of effort, was not known as a global company," Journal publisher Gordon Crovitz said.
"That could be extremely helpful to Dow Jones as we try to execute on our strategy of getting our brands to people however, wherever and whenever they want it."
Business news outlets such as Pearson's Financial Times newspaper must consider new ways to work with websites like Yahoo Finance and Google Finance, particularly if the Wall Street Journal's reporting is opened up beyond its subscriber base to the wider web.
Pearson has said it is talking to CNBC and a number of potential TV distribution partners.
If Murdoch cannot find a loophole that allows him out of the Dow Jones contract with CNBC - part of General Electric-controlled media conglomerate NBC Universal - he could still do deals with business publications such as Forbes and Fortune to bolster financial news coverage.
Doctor predicts an "arms race" to sign up the top names in business journalism.
- Reuters
