New York—In the first major move by new CEO Richard Zannino, Dow Jones & Co. Wednesday announced a major reorganization that will divide the company into three business units.
The overhaul will combine the print and Web editions of The Wall Street Journal in a new Consumer Media Group. The unit will also include the financial news Web site MarketWatch, Barron’s and SmartMoney, which is a joint venture with Hearst Corp. L. Gordon Crovitz, who had headed up the company’s electronic publishing operations, will be in charge of the unit. His titles will be exec VP of Dow Jones, president of Dow Jones Consumer Media Group and publisher of The Wall Street Journal Franchise.
The Enterprise Media Group will include Dow Jones Newswires, Dow Jones Licensing Services, Dow Jones Indexes, Dow Jones Financial Information Services, Dow Jones Reprints and Permissions; and Factiva and Stoxx. It will be led by Clare Hart, who was previously CEO of the Factiva joint venture with Reuters. She will join the company March 1 as exec VP of Dow Jones and president of Dow Jones Enterprise Media Group. She will also be chairwoman of Factiva.
The Community Media Group will include the Dow Jones’ portfolio of 15 daily and 19 weekly Ottaway community newspaper properties in nine states. It will be led by John Wilcox, who will become senior VP of Dow Jones, president of Dow Jones Community Media Group and chairman-CEO of Ottaway Newspapers.
The company said the new structure would increase efficiency and accountability by reducing the layers of management and would cut costs by about $8 million per year, largely as a result of eliminating about 20 net positions. One-time costs of approximately $14 million to cover severance and other expenses will be incurred; $2.8 million was recorded in the fourth quarter of 2005, and the remainder will be recorded as a special item in the first quarter of 2006.
“This new structure and leadership team is a major first step in transforming Dow Jones from a channel-focused publishing company to a franchise-, market- and customer-focused media company,” Zannino, who was named CEO in January, said in a statement. “It will better align Dow Jones’ organizational structure, leadership team and franchises with our strategic vision, which is to be everywhere our customers want us to be with high-quality, differentiated, indispensable and conveniently accessible news, information and insight, profitably monetizing it in all media channels, and consistently generating above-market earnings growth and total shareholder returns.”
An industry observer, who requested anonymity, said: “It sounds like they’re aligning logical content sets to create more well-rounded products for their constituents. It makes sense to integrate properties that can increase [Web] traffic and leverage the content into greater online sales.”