Why the Wall Street Journal is worth more than other papers

David von Drehle has a great analysis on Time magazine’s web site about why Rupert Murdoch’s $5 billion offer for Dow Jones & Co., the parent of The Wall Street Journal, values the newspaper at a much higher price than other papers.

Von Drehle wrote, “The Journal is not like other newspapers. About the only thing it has in common with your metro daily is the paper they’re printed on. Where most newspapers make their money by aggregating mass audiences to read grocery, automobile and classified ads, the Journal’s business is built on an elite audience that highly values the information the paper provides. This audience in turns attracts advertising for luxury goods and financial services unavailable to most other dailies.

“The evidence is growing that this is exactly the right place for a newspaper to be. As circulation for most papers continues to fall, the Journal’s is growing. Last month’s figures from the Audit Bureau of Circulation showed that the Journal posted another increase on top of its robust 2006 gains, to 1,721,694 subscribers.

“Perhaps most important of all, the Journal is light years ahead of other newspapers in training its readers to value information on the Internet. The Wall Street Journal Online was the first major news site to charge for access, and it remains by far the most successful pay-for-news operation, with nearly 800,000 subscribers.

“And because the Journal has an elite, well-trained audience, it is able to target its coverage more efficiently than the many newspapers that find themselves chasing an ever-more atomized audience into far-flung suburbs.”

Read more here. Von Drehle’s number for the Journal’s online subscribers is low. Earlier this week, the company put the number at above 930,000.