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Thursday, June 28, 2007
Former Fortune managing editor Eric Pooley caught with Rupert Murdoch while the negotiations with the Dow Jones board over editorial independence for the Wall Street Journal were being conducted
The $5 billion price tag is easily absorbed by a company that earned $2.3 billion on sales of $25.3 billion last year and has little debt. But if the financials are simple, everything else about the deal is complicated. "The price of the Journal," says Murdoch, "is $60 plus vitriol."
He also notes that the Journal leadership has tried to maintain the print circulation by not giving everything away online, but the percentage of heavily discounted print subscriptions is rising rapidly, a sign of ill health. WSJ.com has more than 900,000 subscribers, making it the largest paid-subscription site on the Web, but less profitable, Murdoch suspects, than it might be with a hybrid model — with free users driving ad sales and premium users willing to pay for high-end content. "But it needs to be studied carefully," he says. Murdoch sensed the power of the Web not so much as a user but as a businessman who watched the bottom line. In late 2004, he says, he "began to feel the erosion of advertising in print and even the stalling-out of ads on television and decided to pay better attention to this. He confirms having discussed with Terry Semel for a stake in Yahoo but with Terry gone, he may have to start discussions all over again, but in the tradition of Newscorp style, an undeterred MySpace goes ahead to launch MySpace TV to take on the likes of YouTube.|
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