Yahoo! should buy Dow Jones & Co.

Barry Ritholtz writes on the Seeking Alpha web site that Internet search company Yahoo! would be a better fit as an acquirer for Dow Jones & Co. than News Corp., which made an unsolicited $5 billion offer for the publisher of The Wall Street Journal last week.

Ritholtz wrote, “Yahoo! could match Murdoch’s $5B offer, and essentially be a White Knight to BOTH family shareholder groups. It should be acceptable to the Bancrofts, who have been rather equivocal in responding to Murdoch’s offer, as well as the the Ottaway family, a minority partner in Dow Jones who ‘released scathing statements yesterday saying that a takeover by Rupert Murdoch’s News Corporation would ruin Dow Jones and its crown jewel, The Wall Street Journal.’

“All things considered, a combination of Yahoo!/DJ makes much more sense than either a NEWS CORP/DJ or even the recently rumored MICROSOFT/YHOO!

“Yahoo would grab a primo media property, one with a growing web presence that fits into its already existing business model. And, it captures a strong way to cross advertise to a highly sought after, high-income demographic. It also adds some bulk to an entity increasingly falling behind Google in the online advertising space. It would add another $1.783B per year in revenues (a near 30% bump up for Yahoo, which did $6.4B last year). It also adds another $386 million in profits (FY 2006), almost doubling Yahoo!’s profitability.”

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