Insider Chatter by Donna Bogatin

A Rupert Murdoch led News Corp. acquisition of Dow Jones represents an “exciting chapter” for Dow Jones itself and the entire field of business news, so believes Norman Pearlstine.

The former editor-in-chief of Time Inc. and twenty year plus veteran of The Wall Street Journal shared his excitement for Rupert Murdoch and the future of Dow Jones during his keynote yesterday at the ASBPE’s conference in New York City.

Why is Murdcoch spurring excitement for Pearlstine? First off, “he is the one executive these days that wants to invest in print” Pearlstine observed.

Why will a Murdoch led Dow Jones and Wall Street Journal bring excitement to journalism in general and business news in particular? It will be “fascinating” to watch Murdoch bet his own money on “expanding the model,” Pearlstine indicated.

Pearlstine underscored that the traditional media Murdoch has had the digital foresight to not only bet big on MySpace, but to foster a platform agnostic media delivery strategy as well.

Pearlstine looks to News Corp. to reinvigorate Dow Jones’ international efforts and for leadership in the FOX Business Channel in the works (which has already garnered 30 million subscribers, Pearlstine said).

Pearlstine speculated that News Corp. may launch a national edition of the New York Post by leveraging the excess printing capacity of the Wall Street Journal.

Pearlstine also noted, however, that Murdoch has “used his publications to advance the interests of news Copr. and himself.” The News Corp. litmus test going forward will be “how agressively he lets The Wall Street Journal cover Murdoch and Dow Jones,” Pearlstine said.

While Pearlstine sees prospects for a reinvigorated Wall Street Journal, he is less certain about the future of print media in general:

We are at the dawn of a new age of extraordinary transformation. No one can predict what will happen. Models that have been enormously successful are collapsing all around us.

Pearlstine now serves as Senior Advisor for Telecom & Media at The Carlyle Group private equity firm. The “turbulence” in the sector makes for a treacherous investment horizon.

James Attwood, Group Head:

The exhiliration of the tech/telecom boom became a false reality but we have now been seized by an equally false pessimism that is causing people to overlook real value in these markets.

Pearlstine is optimistic, however, because at least one person sees real value in print: Rupert Murdoch.

ALSO READ MY EXCLUSIVE INTERVIEW: How Pegasus News Fuels Local Media Business Model for Fisher Communications

PLUS: Ning, NowPublic: Web 2.0 Bubble or Bad VC Bets? and John Battelle vs. AOL Weblogs? Federated Media Wants Video Link Blogging Empire

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Rupert Murdoch, Chairman & CEO of News Corporation pledges to be a “strong custodian” of the “world-class journalism” of Dow Jones, to the tune of approximately $5.6 billion.

The two companies have signed a definitive merger agreement, and an editorial agreement:

“The establishment of a five-member, special committee with the objective of assuring the continued journalistic and editorial integrity and independence of Dow Jones’ publications and services. The initial members of the special committee will be Louis Boccardi, Thomas Bray, Jennifer Dunn, Jack Fuller and Nicholas Negroponte.”

What does Richard Zannino, CEO of Dow Jones, like about Murdoch? His money and his salesmanship:

The transaction will deliver significant returns to our shareholders. It will also build on our recent, industry-leading earnings growth and make our company and journalism even stronger as our strengths are leveraged across News Corporation’s powerful global distribution and marketing platforms,

Murdoch is eager to build out ”one of the world’s greatest media franchises”:

With a portfolio of brands that has no equal in financial information and business journalism, in combination with News Corporation’s assets, The Wall Street Journal and the other Dow Jones operations will be even more formidable competitors as we profitably extend their invaluable information across our print, broadcast and digital platforms around the world.

L. Gordon Crovitz, Dow Jones’ Wall Street Journal publisher is on board:

I hope that as part of a larger company we can extend our journalism more broadly, to serve more readers better.

Crovitz can count on one guaranteed extension: Welcome Tom Anderson, Dow Jones’ newest friend!

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PLUS: Google Smackdown: Susan Wojcicki vs. Eric Schmidt Boomerangs

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Why did Rho Ventures lead a $10.6 million funding round on behalf of NowPublic? To “change the media landscape,” is the PR explanation.

The reality of NowPublic though is that it is exploiting the existing media landscape to its own advantage.

In touting the deal today, NowPublic founder and CEO Leonard Brody went out of his way to assert that not only is he not a proponent of “citizen journalism,” NowPublic itself is no citizen journalism effort.

REALLY? Then why does Brody extol the citizen journalism he says is taking place at NowPublic in his own press release!:

Brody: On a daily basis, NowPublic’s model of citizen journalism is increasingly being embraced by major media.

Not only does Brody contradict himself in spinning the NowPublic VC investment, NowPublic’s publicy stated ”news values” are not being upheld, as I analyzed earlier this morning in FLASH! NowPublic Digg Clone Preps Global ‘News’ Domination.

NowPublic’s interpretaion of “crowd powered media” is strikingly similar to Digg’s “user powered content” philosophy. NowPublic is actually functioning as a Digg like site, aggregating crowd-pleasing soft news stories taken from other Websites.

NowPublic is not being “embraced by major media,” it is iteself embracing the original content of major media, by piggybacking on the professional work done by professional news organizations, amazingly cost free to NowPublic!

If “smart money” is backing the regurgitation of the content of others as a smart media play, who will pay for the production of the news that is being poached?

I asked the same question at the beginning of the year, when Time magazine announced its online news “made simple,” The Ag; A recylcing of the news produced by others:

Now you can start your day by checking our news blog, The Ag, which smartly aggregates and summarizes the most important stories from daily newspapers and blogs around the world.

Time says  “The Ag is the work of Time’s Matthew Yeomans, an early-rising journalist based in Cardiff, Wales”:

Yeomans scours his bookmarks and RSS feeds every weekday morning and writes a digested version of the best stories from hundreds of the world’s great newspapers and blogs, giving you all the news you need to read without reading all the news.

Yeomans’ scouring at dawn conveniently provides the Times’ audience with the breaking news produced by the world’s great newspapers, without the inconvenience of having to visit the producing news organizations to read their original content, or view the ads that support such competitors’ news production.

In the “democratic” news tradition of the Web, Yeomans’ better versions of the best stories of others are sprinkled with new media’s online currency: links.

Typically, Yeomans’ “breaking news” stories are standalone “reports” created from the content of various (competing) news organizations. Yeoman attributes his source content, including links, while Time nevertheless underscores to its readers that there is no need to be “reading all the news” appropriated from those that paid to produce it.:

The BBC says,
Reuters quotes,
AP quoting,
CBS news reports,
According to CNN Asia,
According to the WSJ…

Time may be making shrewd Time-centric business decisions, but what if the producing news organizations Yeomans scours for his “news” follow suit? Ditto for the business model of not quite citizen journalism site NowPublic.

At the end of the new media, citizen journalism day, who will pay to produce the news that everyone seeks to aggregate without paying for? Will there continue to be news to aggregate? News may be a commodity, but valuable commodities cost dearly. 

ALSO: How Pegasus News Fuels Local Media Business Model for Fisher Communications: INTERVIEW

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Google’s big, bad coopetition problem is rearing its ugly head once again.

CEO Eric Schmidt rises to the defense of “planning and buying traditional newspaper media in both national and local newspapers”:

Newspapers are an important source of information and a powerful communication tool. With Google Print Ads we will bring more advertisers to newspapers which will ultimately benefit readers, publishers and advertisers.

Why is direct online competitor Google promoting newspapers?:

You probably already know that Google can help you connect with your customers online. Now, with Google Print Ads, we can help you reach customers offline as well.

The program is not new, and it has not met with Googley success, as I analyzed earlier today in Google AdSense NOT Powering Newspapers, or Radio

What’s more, Google acknoweldges “newspaper publishers will continue to work directly with their loyal base of advertising customers.”

What’s the Google deal then?

Why is Google concsecrating time, effort and money to resell ad inventory owned by competing media at fixed, below market prices yielding small Google commissions, if any: Because Google wants to make all the advertising in the world, and all the world’s advertisers, Google centric, PLUS sell more AdWords.

Schmidt routinely predicts that more and more of marketers’ offline ad budgets will shift online, to Google in particular, as advertisers seek the higher ROI and greater trackability Web based advertising offers. Moreover, Google regualrly touts the superiority of the Google advertising philosophy and ad platform over all others.

In other Google words, “you can make money without doing evil” and “our users trust Google’s objectivity.”

As a proud reseller of advertising in the media of others, however, Google is not pitching itself as the ultimate in advertising trustworthiness.

Google affirms: “Newspaper ads are considered trustworthy, more than any other medium.” What’s more: “85% of readers say they have bought something advertised in the newspaper, and readers are highly engaged when reading the newspape.” according to Google.

Who needs AdWords then? Hardly. Google is looking for a one-two ad punch, big time, with AdWords taking the lead:

Newspaper advertising is a great complement to AdWords, allowing you to expand the reach of your marketing campaigns.

The sole advertiser testimonial in Google’s press release on its Print Ads program today is actually a testimony for AdWords! Simon McIver, director of marketing acquisition at Covad:

Our website is an effective way to acquire new customers. By adding newspaper advertising to our online initiatives, overall impressions on purchased keywords increased 20% over the five day period immediately following the print run.

McIver apparently still finds the Google ad platform trustworthy. SEE: Google’s Big, Bad Risk: Coopetition

ALSO: TechCrunch: Hot, or Not, for Silicon Valley?

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The Google Print Ads guys are a tenacious lot! Never mind that “newspapers’ ad sales show accelerating drop,” Google to the rescue.

Don’t stop the presses though, Google has been trying to piggyback on “dead tree” media for years: First magazines, then newspapers. Despite Google’s determination to spread the Googley gospel to the offline world, however, success has not been forthcoming.

Google today proudly announces that any and every AdWords customer can avail themsleves of “newspaper advertising made easy,” thanks to Google assuming the role of broker in the resale of non-premium newspaper ad inventory. Last month, Google made the same offer re non-premium radio spots.

Google has made no meaningful traction in either of the offline media though. Why would it?

Google touts that its years long efforts to diversify into print and radio advertising are finally nearing market turning points. They are not, however, despite the willingness of high-powered old media partners to offer up not so glowing testimonials on Google’s behalf.

Google has floundered in all its offline diversification efforts to date: Radio, print, TV…because its new media online value proposition is NOT transferrable to offline old media. Advertising is shifting online from off, for just that reason.

Despite the great Google mystique and the power of the Google brand, even the mighty Google can not simply stamp a ”revolutionary” label on an old school ad product like radio advertising and hope to make it new again in the eyes of advertisers.

In a Q & A with USA Today in May, Schmidt himself was unable to show how the magic that is AdWords will be matched by Google on the radio:

Q: The beauty of the online advertising model is that advertisers know whether or not an ad has been effective. They only have to pay if someone clicks on the ad. How can you bring relevancy to radio?

A: Advertisers can target the listener by driving them to a toll-free number or website address, and that should produce an uptick in the product demands.

Where is the touted accountabiltiy? What about pay only for performance? How about reaching buyers that are actively looking for the product?

NO, NO, NO. Google Audio Ads are NOT Google AdWords! Ditto Google Print Ads.

The Google AdWords targeting and performance assurance; concise, accurate and new media effective:

• Advertise to people searching on Google and our advertising network
• Reach people actively looking for information about your products and services online
• Easily control costs - pay only when people click on your ad

The Google Radio & Newspaper advertising targeting and performance assurances? NONE.

“Differentiate between sales driven by your radio campaign and sales driven by your existing keyword campaigns,” Google suggests. HOW? Via very old media, old world “soft” tracking style:

• Track visits to your website: Use a vanity URL as part of your call-to-action (such as www.yoursite.com/uniqueword). Make sure you don’t publicize the address anywhere else — this way, you can be certain the traffic you receive to the site is from people who heard your ad on the radio.
• Track the number of calls to a toll-free or vanity number: Make sure you don’t publicize the phone number anywhere else — this way, you can be certain the calls you receive are from people who heard your ad on the radio. Many vendors who can provide this service.
• Track visits or foot traffic to your store: Monitor changes in traffic levels . Informal or formal surveys of shoppers can help determine if their visit was influenced by your radio ad campaign.
• Track conversions using a unique offer or coupon code: Implement a unique offer code for users to enter when visiting your site, and offer a small incentive in return. Coupons and special offers can motivate customers to notice your ad, and purchase your services or products.

Who needs Google on the radio or in print if it does NOT replicate the ease of Google AdWords and AdSense reliability and trackability that has fueled Google’s $172 billion market cap.

Google may garner a small amount of existing AdWords customers that want to try out radio or newspapers, but Google is NOT on track to become the master of radio or print advertising.

Google remains very much a one-trick (rich) pony. SEE Google: Newspaper Ads More Trustworthy Than AdWords

ALSO: Google Facebook Hookup: Social Graph Privacy Minefield

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