When News Corp strikes out as a stripped-down publishing company in late June, its future fate will hinge on the performance of Dow Jones, a subsidiary that houses the flagship Wall Street Journal and a mish-mash of consumer and business products.
Dow Jones will enter the transition under Lex Fenwick, a data-driven former Bloomberg executive who has been actively remaking the company in the image of his former employer. Fenwick has been spending heavily on technology in the hopes of tying Dow Jones’ disparate pieces into a unified platform.
To get a better look at how this will unfold — and whether it will work from a business standpoint — I spoke with several current and former Dow Jones executives. Here’s some takeaways:
Developers to the rescue
“I honestly believe there are few problems that can’t be solved with a developer,” says Stephen Orban, who joined Dow Jones as Head of Technology in February.
Orban’s primary task is to meld Dow Jones’ sprawling suite of discrete business products — which include Factiva, Newswires, Companies and Executives, Insights, and Risk and Compliance — into a single bundle with unified functions like search and messaging. At the same time, he has to figure out how to better wrap together consumer-facing titles like the Journal, Barrons and All Things D — and then tack them onto the business bundle.
To make it work, Orban, who says he is on a “hiring tear,” must not only stitch together an ungainly combination of legacy products, but also do so in a company historically focused more on news than technology. “I have every understanding that, while I want to be a tech company, we’re still a news and content company,” said Orban. “We’re trying to create a more technology-friendly, fast-moving, agile place to have your career.”
He added that the plan is to create “a whole bunch of start-ups.” These groups will work within resources pools dedicated to groups like editorial and DJX, which is the name for the integrated suite of Dow Jones business products. To ensure the whole thing doesn’t devolve into unaccountable fiefdoms, the company will rely on quarterly meetings where teams will explain what they’re up to.
If all goes well, Dow Jones will be able to acquire new customers and upsell existing ones with the promise of a news and data bundle that is cheaper than Bloomberg (whose annual licenses start north of $20K). Meanwhile, the company will urge consumers to adopt new platforms tools like “WSJ Secure” — a future Dropbox-like product to store financial or personal documents and “WSJ Profile.” Here’s how Fenwick described the grand scheme of things this week:
“If you build applications and you become a platform, it does lots of magical things that help us. It increases the customer’s stickiness.”
Far-sighted or folly? Former execs are skeptical
Fenwick’s arrival last February triggered a change-of-guard exodus at Dow Jones, one that was likely accelerated by his pugnaciousness and foul-mouth (“This is not what I wanted! Are you a fucking idiot?” is just one sample quote in a recent Reuters profile).
As for the actual state of Dow Jones’ business, two former executives portrayed it in a similar light but offered different assessments of Fenwick’s prescription.
The executives, who did not want to be named, both said that Dow Jones’ enterprise revenue — particularly that from its newswire service — has been in dramatic decline even as the Journal has held steady (the paper has weathered a rocky ad market thanks to digital subscription revenues).
The plan to be more Bloomberg-like, however, drew a snort of derision from one of the former executives, who believes that Dow Jones’ product suite — even when lashed together — is too weak and disparate to be useful to enterprise clients. He added that using the combined suite as a reason to increase prices will lead existing customers to bolt altogether.
The other former executive, however, said the product consolidations that Fenwick is envisioning is exactly the right strategy and that it should have happened a long time ago. The source was less sure that investors would let Dow Jones execute it.
“It’s a long-term project and they have a short- or at best a medium-term period to carry it out.”
A short time to sink or swim
Dow Jones and the rest of News Corp’s publishing assets, which also include Harper Collins and UK newspapers, are expected to start life as a separate corporation on June 28 while the old company’s rich cable and broadcasting assets go their own way as 21st Century Fox Corp.
The new News Corp (the name is the same) will start out with a healthy pile of cash and protection from raiders, which means it will fare better than Time Life — whose parent company, Time Warner, plans to toss it from the corporate nest with a rock around its neck. But the overall weakness of many News Corp assets, including the money-bleeding New York Post, means Dow Jones will have to deliver as a profit center sooner than later.
As of 2011, Dow Jones pulled in only 1.5% of the $25 billion spent globally for data and market analysis. This figure, which comes from a study cited by the Economist, compares to more than 30% market share for Bloomberg and Thomson Reuters.
The good news, then, is that Dow Jones has a potentially enormous market in which to grow. The more sobering news is that, if the company can’t execute, it will be using tech not to consolidate its products but to sell them off instead.