Murdoch's Dow Jones will have money, scale, time

NEW YORK, Aug 2 (Reuters) A Rupert Murdoch-controlled Dow Jones&Co Inc will have some key advantages over competitors: scale, financial resources and a little extra time to figure out how to grapple with new media trends.

As investors heap pressure on newspaper publishers to find a way to captivate audiences that are moving to the Internet, Murdoch will be able to invest in Dow Jones and its Wall Street Journal newspaper, cut costs and insulate the business within his larger media empire, media executives and analysts said.

Competitors from New York Times Co to financial news providers Bloomberg and Reuters Group Plc will need to form new distribution alliances and compete against the global network of Murdoch's News Corp, they said.

''They've got to be looking at the whiteboard and saying, 'what are the content assets we have?''' said Outsell media analyst Ken Doctor. ''They have got to do that analysis of where they're strong (and) where they're weak, and then say 'how do we find the customers, wherever they are?''' Since the 60 dollar-per-share offer for Dow Jones was disclosed three months ago, News Corp stock has slipped just 5 percent in a sign its investors think the deal will work out well. That is despite concern among some analysts about the ''irrational'' 65 percent premium Murdoch offered for Dow Jones.

The companies announced a deal for 5.6 billion dollar, including debt, yesterday.

''If you assume that Dow Jones was sufficiently valued by the market at say 3.5 billion dollar before the merger ... let's say maybe he can get a half-billion dollars of synergies out of it for the Fox channel or printing or global news,'' said Alan Gould, an analyst at Natexis Bleichroeder.

''So let's say that Rupert overpaid by 1 billion dollar-- over 3 billion (News Corp) shares, that's 33 cents a share. It's not a big deal,'' he said.

Dow Jones also publishes MarketWatch.com, a Web site geared toward consumer audiences, the Barron's business weekly and Asian and European editions of The Wall Street Journal. But the Journal's influence wanes outside the United States.

News Corp, with newspapers and television networks stretching from Sydney to New York, has the power to amplify those publications' voices around the world through its BSkyB network, Fox and other online and television outlets.

Murdoch has said Dow Jones would also fuel a new Fox business channel he will launch this year, but a contract between Dow and dominant financial TV news provider CNBC could complicate that relationship. Their deal expires in 2012.

''News Corp is a very global company, and Dow Jones, despite a lot of effort, was not known as a global company,'' Journal Publisher Gordon Crovitz told Reuters in an interview.

''That could be extremely helpful to Dow Jones as we try to execute on our strategy of getting our brands to people however, wherever and whenever they want it,'' he added.

Business news outlets such as Pearson Plc's Financial Times newspaper must consider new ways to work with Web sites like Yahoo Finance and Google Finance, particularly if The Wall Street Journal's reporting is opened up beyond its subscriber base to the wider Web.

Pearson said this week it was in talks with CNBC and a number of potential TV distribution partners.

''It makes a lot of sense if you're Dow Jones that you're going to try to use those sites much better to get new audiences,'' said Outsell's Doctor.

If Murdoch can't find a loophole that allows him out of the Dow Jones contract with CNBC -- part of General Electric-controlled media conglomerate NBC Universal -- he could still do deals with business publications such as Forbes and Fortune to bolster financial news coverage.

But hiring the top names in business journalism will get more expensive as News Corp tries to lure them from rivals.

''I think what we'll see is an arms race between CNBC and the Fox Business Channel to sign up the top corporate players in business news, and the top commentators,'' Doctor said.

REUTERS SAM BST0711