MySpace + Wall Street Journal = A Place for Friends (of Different Demographics, Temperaments and Clothing Choices)
So, apparently, according to statements by CEO Eric Schmidt reported last week, Google is out as a potential bidder for Dow Jones, in the wake of News Corp. Chairman Rupert Murdoch’s $5 billion offer to the owner of The Wall Street Journal, MarketWatch, Barron’s and, yes, AllThingsD.com.
So dreams of pricey, organic snacks are out for the world headquarters of our little Web site, as well as solar-powered computers to bring the news to you cleanly.
With no other apparent active bids on the horizon (no Yahoo, no Washington Post, no GE, no errant billionaire itching to own a newspaper) and the Murdoch offer wending its way through the merger dance, perhaps it is time to analyze the digital synergies of such a pairing, beyond this initial post after the deal was revealed two weeks ago.
Or perhaps in this case, as I look more closely, the lack thereof.
That’s because News Corp.’s entire success in the digital arena could be boiled down to two words squished together in that trendy Internet way (like BoomTown): MySpace. Murdoch seemed insane (yeah, yeah, crazy like a Fox, I know) when he ponied up $580 million for MySpace in mid-2005, but his bold move has been vindicated, as the social-networking site has become even more popular and profitable.
That got a big boost when News Corp. soon struck a deal with Google to pay MySpace $900 million in guaranteed ad revenue. He has got some other interesting sites, but all the glory centers on MySpace, which would be an uncomfortable partner for Dow Jones.
As far as I can strategize, it is hard to find any real help MySpace (Murdoch’s profile on the site is pictured here) could be to the Journal online or offline or to any other Dow Jones digital property. With very different demographics (older and less hip, versus younger and quite trendy, no matter what either company says), little chance for cross-marketing (can you just imagine a “Heard on the Street” page on MySpace?) and even very different advertising prospects, it is not the most useful of links.
While it is possible there are untapped social-networking opportunities among the Journal’s high-income audience, it is not its first and best use of its many assets. The only really promising property that could benefit from a MySpace link is an as-yet unnamed personal-finance site aimed at young people that Dow Jones is creating with IAC/InterActiveCorp.
News Corp.’s other sites are even less helpful to Dow Jones. IGN Entertainment is focused on young men who play video games and FOXSports.com, WhatIfSports.com and Scout.com are aimed at the same demographic for sports. FOX.com has very nice entertainment offerings, like Americanidol.com and kSolo.com, a Web-based karaoke site, while RottenTomatoes.com is a very useful site for collating movie reviews. None has anything in common with Dow Jones’s sites.
The only possibly amusing synergy might be with AskMen.com, a “popular lifestyle destination for men on the Internet designed to provide this audience with daily features on subject matter that interests the general male population. Its mission is to offer men candid advice that is useful, practical and entertaining.” The CEOs who read The Wall Street Journal might love that (not).
And what of Murdoch’s recent compliments over Dow Jones’s ability to charge for its content on its flagship WSJ.com site? The record for the site is certainly impressive in a content-needs-to-be-free paradigm now gripping the Web media world. In the first quarter, its paid subscribers grew to 931,000, up 20%.
But how long would Murdoch, who is launching a business cable channel and doubtless has aspirations of owning a global financial media network delivered over a variety of distribution platforms, really keep such a site shuttered and out of the rough-and-tumble mix?
It would be, I think, one of his very first moves to unleash the power of the Journal brand from behind its paid wall and sell it hard to the higher-class advertisers he doubtlessly covets.
What that would do to the brand–one built around high quality and, yes, worth charging for–is the great unknown. While I have always favored free over paid, I think Murdoch would have to move with great delicacy that so far seems not his best characteristic, especially judging from his other properties.
Not that a shot in the arm is not a good thing. Heavy-duty support from the top is a good thing, especially additional financial support, and Murdoch has shown that he does that a lot. But he is also know for more unwelcome meddling, often in the political arena, which would be bad for the Journal’s sterling brand, online or offline.
But persistence is also needed in the online space, and Murdoch has a history of stubborn persistence in spite of much failure over the years in in the digital arena, as I wrote in this column in 2001 about News Corp. That kind of fortitude does go a long way, and that is the great plus of the digital part of this deal.
I am honestly not sure what to think of Murdoch’s bid right now, but it is nice to hear him talk the talk, as he did in a recent essay in Forbes called “Mixed Media.” His lead paragraph says it all:
Traditional companies are feeling threatened. I say, bring on the changes.”
By all means, bring on changes. Let’s just be clear on which changes really make sense.
Later development: Murdoch wrote a letter to the Bancroft family, published tonight here in the Wall Street Journal online edition, outlining a lot of things, including a promise to fund the online assets more (we will begin researching pricing on the 30-inch Apple Cinema display immediately). “Dow Jones is already a leader in content and digital media with three of the world’s leading paid-subscriber financial news sites,” wrote Murdoch. We would enthusiastically build upon this success by leveraging the scale we have built in digital media.”
Please see this disclosure related to me and Google.