Go Rupert!

Posted by: Lauren Young on May 1, 2007

Go Rupert Murdoch.

Believe it or not, just yesterday I was musing with Tobias Levkovich, chief U.S. equity strategist at Citigroup, about potential partners for Dow Jones. We agreed that News Corp. is a great contender. Levkovich is bullish on the media sector, especially because valuations are so compelling. His favorites in the group are broadcasting and publishing names.

Now comes News Corp.’s unsolicited bid for Dow Jones, which is the best thing that has ever happened to Dow Jones. My advice to DJ shareholders? SELL! Your ship has come in.

Full disclosure: I worked at Dow Jones for 10 years, but I sold my stock after I joined BusinessWeek, which is a unit of McGraw-Hill, in 2003. During the period that I worked at the company, the stock was a flatliner at best.

This jolt by News Corp. is also terrific news for media companies because it will get more folks in the market focused on the unloved media sector.

Stay tuned…this is a great story.

Reader Comments

CrossProfit

May 5, 2007 10:15 AM

I'm not sure that this will generate more interest in the media sector.

The DJ deal is unique in several ways.

First, we are talking about a captive audience that has come to depend on the DJ, whether in print or online, for no-nonsense reporting. There are a lot of tabloids and websites out there, including the website aggregators, that publish every silly idea that anyone can think of. When they get it right for a change, it is flaunted in your face. Statistically, DJ has been the most reliable over the years.

Second, there would be far less buzz if it were the New York Times on the block. Though the New York Times is a respectable pillar of journalism, its name has been tarnished over the past four years. The combination of lower standards, or perceived lower standards, coupled with proven accuracy from blogosphere is beginning to take its toll. Reporting of daily news, whether local or national, is being done better and faster by blogosphere. As time goes on, people learn which sites are reliable news sources.

Third, until now the decline of printed news was limited to the fact that you couldn't read a blog anywhere, such as on the train or subway to work. As wireless technology improves and the proliferation of web phones takes hold, printed media will be no match for online news disseminated by news aggregators having thousands upon thousands of 'field reporters' to draw upon.

As for the DJ, a thousand more writers won't make a difference. In the stock market niche it has always been 'who you know' - not 'what you know'. DJ has the connections.

Disclosure: This is the opinion of a CrossProfit analyst and may not reflect the opinion of CrossProfit.com.
http://www.crossprofit.com

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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