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The power of the Journal

The paper's reputation is the reason people -- including Murdoch -- buy it, and that's unlikely to change.

August 02, 2007

Foes of media consolidation are wringing their hands over Rupert Murdoch's $5-billion acquisition of Dow Jones & Co., publisher of the Wall Street Journal. The purchase gives News Corp., Murdoch's global media conglomerate, control over the country's second-most popular newspaper -- a nice addition to such assets as Fox Broadcasting Co., the FX cable network, the 20th Century Fox movie studio, 35 local TV stations, MySpace.com, book publisher HarperCollins, TV Guide, the New York Post and a controlling stake in DirecTV. And that's just its U.S. investments.

Michael J. Copps, one of two Democrats on the Federal Communications Commission, called for an immediate inquiry into the transaction. "What's good for shareholders of huge media conglomerates isn't always what's good for the public interest or our civic dialogue," Copps warned. Other critics predicted that Murdoch would sacrifice quality at the Journal for the sake of profits, politics or other corporate interests. Such worries are understandable, given what Murdoch has done with other properties. Yet the doomsayers overlook the force that made the Journal what it is today: investors' hunger for reliable information.

The value of Dow Jones' products lies in the company's reputation as an honest broker amid a sea of self-interested financial hucksters. If Murdoch tampers with that reputation, Dow Jones' audience will notice. So will the blogosphere. The Internet has driven media criticism to new peaks of intensity, and there's no shortage of skeptical bloggers ready to blow the whistle on conflicts of interest, real or imagined.

Nor is there any shortage of alternative sources of business news on cable TV, in magazines and online. The Journal may be a leader today, but it is increasingly challenged by raw data sources and personalized news aggregators online, as well as companies that take their pitches directly to investors without journalistic filters.

The deal with News Corp. also includes a provision guaranteeing the independence of top editors at the Journal and Dow Jones, but that's not likely to prevent Murdoch from putting his stamp on his acquisitions. Instead, those who want the Journal to remain a beacon of tough-minded business journalism will have to hope that Murdoch understands what makes Dow Jones worth the premium he paid for it.

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