Dear Rupert...

News Corp. has won the battle for Dow Jones. But that's just the start of managing a property that could clearly use the Rupert Murdoch touch

by Ron Grover

It started off as a low-key breakfast with Dow Jones (DJ) Chief Executive Richard Zannino on Mar. 29. Four months later, after facing down the resistant remnants of the founding Bancroft family and making certain concessions to ensure The Wall Street Journal's editorial independence, News Corp. (NWS) Chairman Rupert Murdoch now appears to have claimed the 124-year-old company with a $5 billion bid that proved too lofty for the likes of General Electric (GE), Pearson (PSO), and even Microsoft (MSFT).

In winning the battle, Murdoch confronted accusations—including a front page story in the Journal—that he has regularly meddled with the running of his newspapers, especially to gain business advantages elsewhere in his globe-spanning empire. And he now controls the newspaper that in 2000 famously dissected his wife's personal and professional ambitions in a front-page article that Murdoch says prompted the only time he has ever complained about the newspaper's coverage.

So what do you do if you're Rupert Murdoch, and you have just acquired one of the world's most prominent and respected newspapers? The billionaire says he has no plans to change the Journal's editorial direction and says he's been told that its current publisher, L. Gordon Crovitz, is a "brilliant man." Still, Murdoch is known for running his companies closely and aggressively. And with Dow Jones' earnings last year no higher than they were in 2003, you know that the Australian media mogul already has a preliminary game plan. Here are a few additional suggestions:

Dear Rupert:

You've just won one of the best-known brands in journalism. Congratulations. But as you know, it's a company that needs work. I mean, what a mess, where does one start? Circulation at the flagship Wall Street Journal has been slipping for ages, and is off by 3% so far this year. Ads are also in the dumps, down 4.2% from a year ago. But the company's online properties are going gangbusters, with both WSJ.com and Barron's Online usage up in double digits.

This is a company that clearly needs the Rupert Murdoch touch. So for starters, cut the easy stuff. Sell off some of the company's 16 printing plants around the country, and lease them back as the company currently does outside San Francisco. Combine some operations with your New York Post, maybe even printing at the same brand-spanking-new printing plant you built in the Bronx four years back. As for those 7,400 employees? It's painful, I know, and you promised…

And as for the Journal, well, where do we start? Ad sales haven't budged much in the past five years and are down by nearly 2% this year, even as spending has increased by $40 million annually for the weekend edition. I know you promised, Rupert, but it's time for some layoffs. And last year's 4% whack ain't gonna do it.

Separate the Wheat from the Chaff

Then there are the things you don't really need. That half interest you share in SmartMoney with Hearst? Get rid of it. With 800,000 subscribers, it will never be much of a money maker. Same for Adico, an online data service for employers and career sites. It's not big enough to do battle with the Monster.coms (MNST) of the world. Russian newspaper group Vedomosti is a dog. And find a nice home for your local newspaper group, where advertising is off by 6%. Who needs the headache of a tiny chain of 23 small-town papers in places like Nantucket and southern Oregon?