WSJ's fall due to Bloomberg's rise

David Warsh of Economic Principals writes that the reason Dow Jones & Co., the parent of The Wall Street Journal, is so vulnerable to being sold to bidders like News Corp. CEO Rupert Murdoch is due to Bloomberg’s rise.

Warsh wrote, “In many ways, the rise of the traders who rely on Bloomberg boxes — and on similar information services from Reuters, Thomson Financial and Dow Jones — resembles the parallel rise of the army of MBAs who today form a preponderance of those who manage corporations around the world. That is to say the Bloomberg legion is a language community, requiring its own special tools and status symbols, and quite able to pay for them. No wonder, then, that Bloomberg gives four free months of home service to any subscriber who loses his job — with the result that most habitu…s quickly find employment elsewhere and promptly renew their subscriptions. To this day, most people have no sense of Bloomberg’s journalism, because so few people read it. It definitely is not a mass medium.

“In recent years, The Wall Street Journal has struggled to reinvent itself. The paper added a Friday ‘weekend’ section, then launched a Saturday edition, and worked with considerable success on its online edition. The re-design earlier this year of the iconic front page of its newsprint edition was emblematic of its general un-success in creating the kind of excitement that commands a high multiple.  The situation is not quite ‘between two worlds, one dead, the other powerless to be born,’ for the WSJ remains the gold standard by which other newspapers’ intelligence, clarity and fairness is judged.  But that is the general idea.

“In these circumstances, Rupert Murdoch’s pre-emptive bid of $60 a share for Dow Jones — nearly twice the value the market placed on the company previously — seems nearly certain to succeed.”

Read more here.