The Gold Rush for Financial Information

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Is all the personal and political coverage of the Rupert Murdoch story missing the point? To wit: financial information is the prize in Murdoch’s bid for The Wall Street Journal. “Let’s do the numbers” is the lead-in line on public radio’s Marketplace. “Let’s own the numbers” is the theme of Rupert Murdoch’s ambition, which is not just to own The Journal and join the top ring of the American publishers’s club, but to combine the lustre and electronics of the Dow Jones wire with the TV reach of the Fox network and be more than competitive with General Electric’s business cable channel, CNBC. This is the same realm of brilliantly digitized global market information that has made Michael Bloomberg rich and famous; the same lode of precious business information that prompted the Thompson Group to make a play for Reuters. Our conversation this hour starts on the premise that the consolidation of ownership of the best (in this case: billable) information in our society is more interesting really than Murdoch’s very well known personal lust to own The Wall Street Journal and his contrary political history over the years.

Why the interest now? Is it driving a revaluation of media and newspapers, or is the real story here about digital properties?

Steven R. Pearlstein

Business Columnist, The Washington Post

John Cassidy

Staff Writer, The New Yorker

Extra Credit Reading

Sarah Ellison, A New Test for Dow Jones, The Wall Street Journal, May 10, 2007: “The proposed tie-up between Reuters and Thomson surfaced just days after Mr. Murdoch’s bid became public. Such a deal promises to change the landscape for financial news and data. In particular, it presents a challenge and an opportunity to Dow Jones Newswires, which is part of the company’s most-profitable unit, the Enterprise Media Group.”

Rupert Murdoch, Mixed Media, Forbes.com, May 7, 2007: “Companies that take advantage of this new meaning of network and adapt to the expectations of the networked consumer can look forward to a new golden age of media. Far be it from me to suggest that either I or my company have all the answers.”

John Cassidy, Murdoch’s Game, The New Yorker, October 16, 2006: “Murdoch likes to keep people guessing about his intentions. On September 14th, the Post published a front-page story encouraging New York’s mayor, Michael Bloomberg, to launch a Presidential bid. ‘RUN, MIKE, RUN,’ the headline read. ‘Americans like him for prez: poll.'”

Henry Blodget, Why Murdoch Wants Dow Jones (and Why CNBC Should Sweat), Internet Outsider, May 1, 2007: “If Rupert is successful in his Dow Jones bid, however, CNBC will look comparatively like business-lite. The sharp, telegenic Wall Street Journal reporters who now provide CNBC with some of its pith will provide it to FOX’s business channel instead. “

Emily Bell, Is this a blast of Murdoch from the past?, The Guardian, May 7, 2007: “Murdoch is positioning the company where he thinks, for the next generation, it needs to have its powerbase. This is in the powerful market and advertising vehicle of content and scaleable social media (all those MySpace eyeballs), and influential and relatively valuable real-time financial information.”

Steve Hannaford, Dominating financial information, Oligopoly Watch, May 9, 2007: “It’s no coincidence that the two major filters of financial companies are being wrested away from independent holders to major information oligopolies. Meanwhile other bidders are said to be lining up for their chance at Dow Jones.”

Justin Fox, That other big media merger and what it means, The Curious Capitalist, May 9, 2007: “But consider these two numbers: $5 billion and $18 billion. The first is what Murdoch’s News Corp. has offered to pay for Dow Jones; the second is what Thomson is paying for Reuters. The venerable wire service and market-data provider that spent the past 26 years losing ground to upstart rival Bloomberg is still worth more than three times as much as the parent company of the Wall Street Journal.”

Weboy, How Now, Dow Jones?, NYCweboy, May 9, 2007: “Make no mistake, Murdoch’s overvalued offer – an absurd premium over the $33 stock price that had been out there – was largely a play to give legitimacy to his goal of launching Fox Business News as a cable channel. In one swoop, Murdoch would control the market’s major indicator (the Dow Jones Industrial Average) and it’s most legitimate arm of business reportage in the Wall Street Journal.”

Brian Dunbar, in a comment to Open Source, May 10, 2007: “My only thought pre-show is that all of this is a really good thing for me at least; if you’re going to store, manage and make sense of all that data you’ll need a lot of intelligent highly paid guys who understand who to manage all of those 1s and 0s.”

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  • I’m looking forward to hearing this.

    My only thought pre-show is that all of this is a really good thing for me at least; if you’re going to store, manage and make sense of all that data you’ll need a lot of intelligent highly paid guys who understand who to manage all of those 1s and 0s.

    Which isn’t to say that I am so very smart but I do know my way around complicated enterprise systems.

  • Murdock scares me. If he was trying to buy Mad Magazine it would scare me, this scares me that much more.

  • Hold on! Are you saying that Rupert Murdoch is out to get even richer by going one step beyond data mining–by owning those mining companies? That he will then be able to sell that information and viewership of that information or even use it for his own investment purposes? And I thought he was just interested in providing more accurate and timely business information for the public good.

  • katemcshane

    As I listened to these two, I thought about the 90’s when Fox cancelled TV Nation and Michael Moore said that his feelings were hurt. I was sitting in my apartment (back in the days when I made enough money to afford an apartment of my own) screaming, “Your feelings are hurt??!!! It’s Rupert Murdoch!! What the fuck is wrong with you, Michael?!!!” Listening to these guys last night, I could not have been more turned off, especially with Pearlstein. But both of them have their own interests in mind. It’s like when the press go on about what great leaders Nixon, Reagan — and yesterday on BBC, Tony Blair — are. Remember that somewhat old expression, Gag me with a spoon?

  • katemcshane

    sidewalker — I meant to thank you for the laugh.

  • After listening to the program my take is – and I’ll admit this is based on more impression than any deep thought on the matter – this; the news professionals who are again’ Rupert Murdoch are worried more about their own turf than serving their readers and the stockholders of the companies who employ them.

    If you’re just a consumer and not ‘in the biz’ .. it’s not really such a big deal. Get some perspective.

    Life is change. This is generally a good thing but railing against it .. well might as well go down to the shore and tell the waves to stop smashing against the beach.

    So Rupert buys WSJ. He’s a biz guy, not out on a crusade to change the world. In the end the consumers will be served as will the stockholders of the companies he’s dealing with.

  • hbobrien

    Listening to this last night, I was amazed to find yet another journalist who doesn’t appear to understand how newspapers make money. That is, he kept saying that he didn’t want his writing to be valued at “nothing” by having it given away for free on the internet (I believe this was Pearlstein).

    Trouble is, the pair of quarters you give these days to the honor box at your local cafe have almost nothing to do with the bottom line of a newspaper — they pay for the delivery man, at best.

    What *pays* for the newspaper are advertisers. What a newspaper sells is not the news. What it sells — its product — is its readers, to the advertisers.

    So unless the Post has decided to go without advertising, both in print and online, Pearlstein’s writing is very expensive indeed.

    Some “Business Columnist,” if he doesn’t even understand how his own employer does its business.

  • hbobrien

    Oh, and it’s Bloomberg’s *lack* of advertising that makes those machines so expensive, not the quality of the information per se.

    Well… That, and Bloomberg’s limiting of its audience by raising the price so high only businesses that can write it off as an expense can afford it.

  • hbobrien, your point is a good one about the business of media companies, but there is another way they and companies that track consumer profiles and decision make money these days. Not only do they deliver the eyes to advertisers but they deliver information about the values, beliefs, behavoural tendencies, etc. of those viewers (consumers) to whomever will buy this. Information about the consumers of investment/business products is the Rhodium in the data mine. Any sensible media mogul would want this.

    Who really cares whether Murdoch did it for strictly capitalist motivations or to show up the Yankees. I don’t know why ROS cares and why there had to be a show on this. Rather, why not a show on how we are being data mined, where this information is going, how it is being used, etc. This would be far more informative and useful. My guess is it had to do with time pressures to get a show on the air.

    Oh well, even the BoSox deliver a stinker from time to time….

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  • tbrucia

    An aside: For those who have difficulty distinguishing BILLIONS from MILLIONS from THOUSANDS… If an anthill (about an inch high) represents $100,000, and (therefore) a book (about 10 inches tall) represents one million dollars, how high would a billion be? [Pause]. It would be the height of an 84-story building. And here’s a photo of such a building http://www.arrakeen.ch/malaysiafeb02/466%20%20Petronas%20Towers.JPG . If you make $100,000 a year, don’t even try to imagine Bill Gates net worth of $53 billion as a building… in fact, flying over the Pacific to Japan next week I won’t be that high (about 44,000 feet). If it makes anyone here feel more significant than an ant, Rupert Murdoch’s net worth is about $6.7 billion. That’s only a bit more than a mile high. Everyone happier now? 🙂

  • Murdock’s conservative agenda and his ability to peddle smut on the side is what make him so scary. It shows his only allegiance is to the dollar.

    NPR’s topic du jour a month ago was how newspapers are unable to make money, and are scaling back. Now a media mogel/monster shows some serious interest in a paper, why? I think he just wants the name. I’m sure of it; it’s for branding the new network. He wants to start the #1 financial network, and why not start with the #1 name. If print media is in decline, then why buy a newspaper now, when you can buy it for less in a year or two?

    timing.

  • He wants to start the #1 financial network, and why not start with the #1 name. If print media is in decline, then why buy a newspaper now, when you can buy it for less in a year or two?

    If you wait a year the property might not be for sale; if Murdoch can make WSJ work as a business then so can someone else.