Peter Kafka

Recent Posts by Peter Kafka

News Corp: We Spent $2.8 Billion Too Much on Dow Jones

A little more detail, via a filing with the Securities and Exchange Commission, on the $8.4 billion write-down announced by News Corp. yesterday: $2.8 billion of that charge is getting assigned to the company’s $5.7 billion purchase of Dow Jones, publisher of The Wall Street Journal, a little more than a year ago.

To put a fine point on it: Rupert Murdoch is admitting that he spent twice as much as he should have for The Wall Street Journal.

This isn’t a huge shock: When Murdoch made his $60 a share offer for Dow Jones (which also owns this Web site) in the spring of 2007, he was already paying a 65 percent premium over its market value. And, of course, both the economy in general and the newspaper industry in particular have collapsed since then–just ask the New York Times Company (NYT) and Carlos Slim.

So it was only a matter of time before News Corp. (NWS) had to fess up and account for the deal on its books. But that can’t make it any less unpleasant to look at in black and white. The gory details are here if you want to see for yourself.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work