Take one look at the pages of The Wall Street Journal, and it's clear that the Rupert Murdoch era is under way. The day after General Motors (GM) announced a stunning $15.5 billion quarterly loss, the Journal, which Murdoch has controlled for a year, led instead with the more tantalizing story of a federal scientist's suicide while under investigation in the anthrax case. On another recent day, the newspaper led off with a story about Iraqi clerics, pushing farther down the page a more traditional Journal piece on the rancorous dispute between oil giant BP and its partners in a Russian oil field.
O.K., so these aren't the Page Three beauties who transformed Murdoch's London paper, The Sun, into a populist moneymaker. But months after it formally came under Murdoch's sharp eye and equally pointy editor's pencil, the Journal is clearly aiming at The New York Times in both business and nonbusiness news.
That may not turn the Journal into a big moneymaker anytime soon, but Murdoch is already claiming victories on his way to a turnaround. On Aug. 5, Murdoch's News Corp. (NWS) beat analyst estimates by announcing a 27% hike in net income, to $1.13 billion, for the fourth quarter that ended June 30. The company highlighted a 21% gain in operating profits that it said included $24 million in operating income from Dow Jones. The acquisition, which closed in December, has added $45 million of operating income since then, even after accounting for $47 million in acquisition costs, the company said.
News Corp.'s big growth engines were Italian satellite company Sky Italia, the American Idol show on its Fox network, and its studio, where operating income more than doubled on the strength of DVD sales of hit films like Alvin and the Chipmunks and Juno. "Other companies may be suffering," Murdoch said in a telephone hookup with analysts from Beijing. "But our confidence and ambition is buttressed by a very healthy balance sheet."
Building That National Newspaper
There's no mistaking, though, that turning around the Journal—and making it a major competitor to the Times—is what is driving Murdoch right now. He says the newspaper and businesses such as its Factiva article-search service "are the best brand names in business news" and will be big winners on the Internet. Murdoch says he is also planning to use the Journal's content on the company's Star and Sky news services in Asia and Europe, as well as on social networking site MySpace.
News Corp. has taken steps to beef up the Journal, too. In July the paper raised its newsstand price to $2 from $1.50—which Murdoch had hinted he would do in a March conference call with analysts after having noted that the paper was spending $6 million annually to "add new features to its news and editorial pages." At the time, Murdoch also noted that the Journal was one of just two newspapers among the nation's 10 largest to increase circulation, and was the only one to hike its number of paid subscribers. "There are significant opportunities to raise advertising revenues, increase circulation volume and revenues, and to reduce subscriber churn in several markets around the world," Murdoch said then. At that time, Murdoch said the Journal's paid subscriptions had increased by 1.6%, to nearly 1.5 million.
Where does Murdoch intend to take the Journal next? He's already expanded pages for U.S. and world news and added a weekly sports page and a new Currents page, which highlights trends in religion, science, and education. Murdoch's aim, which he scarcely disguises, is to create a truly national newspaper, much as he's done in Australia and Great Britain.