Management shakeup at Dow Jones as News Corp. prepares to take charge

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There were two high-profile resignations late last week at Dow Jones & Co., as News Corp. prepares to close its $5.6 billion acquisition of the company. The deal is expected to be wrapped up this week following a special meeting of Dow Jones stockholders on Thursday.

Last Thursday, Dow Jones announced that CEO Richard Zannino would leave the company following the completion of the deal. News International Executive Chairman Les Hinton is expected to succeed Zannino as Dow Jones CEO.

The following day, Dow Jones said L. Gordon Crovitz, publisher of The Wall Street Journal, exec VP-Dow Jones and president of its Consumer Media Group, will step down at the close of the sale. Crovitz, who will write a column for the Journal after departing management, will be succeeded by Times of London Editor Robert Thomson.

Crovitz, who started at Dow Jones in 1980 as an intern, played a key role the past two years in helping to transform Dow Jones from a largely newspaper company to a more multimedia operation. Among the key moves on his watch were the $520 million acquisition of MarketWatch in 2005 and the comprehensive redesign of the Journal, unveiled this past January, to provide better alignment with

“For my part, I’m pleased with what we managed to accomplish in terms of integrating our brands and putting the Journal in a stronger position in terms of integrating advertising, marketing and news across print and online,” he said.

Crovitz, who has been publisher of the Journal since early 2006, would not comment on his plans for the future or what’s ahead for the new crew at Dow Jones.

Lauren Rich Fine, who covered Dow Jones for nearly 20 years before resigning in April as managing director of Merrill Lynch’s equity research department, said Crovitz would be “very attractive” to any traditional media company, large or small.

“Gordon has figured out the relay between the wires, online and print,” said Fine, who is now practitioner in residence at Kent State University’s College of Communication and Information. “He understands the distinct qualities of each audience and how the mediums can build on, and not distract from, one another.”

An article in The Wall Street Journal on Friday said that Thomson isn’t expected to have purview over the business side of the Journal, as Crovitz did. The article went on to say that Murdoch himself is likely to play a crucial role in devising business strategy for Dow Jones’ media properties.

Dow Jones declined to comment on those characterizations.

One of the first decisions of the new management regime at Dow Jones will be a tough one: whether to drop The Wall Street Journal’s paid subscription model, which reportedly brings in at least $50 million a year in revenue.

“If News Corp. pulls the plug on the paid model, the ability to produce better and better results for advertisers is going to become much more important,” said Ken Doctor, media analyst at research and advisory company Outsell Inc.

He added that eliminating the firewall, “may get you five to 10 times more viewers [than the current 1 million subscribers] but the demographics will go down, making it a less efficient buy” for marketers.

Another question for the new management team: If the Journal cuts back on long-form articles in exchange for more spot coverage—as News Corp. Chairman-CEO Rupert Murdoch has stated is his desire—will that give enterprise advertisers pause about the amount of ad dollars they want to devote to Dow Jones’ brands?

“They need to keep quality business coverage because that’s what business readers care about,” Doctor said. “It’s a matter of finding additional ad revenue as b-to-b and b-to-c marketing start to blend together.”

Dow Jones also announced that Joseph Stern, exec VP-general counsel, corporate secretary and amember of Dow Jones’ board, will be leaving these positions following the close of the acquisition but will remain with the company through March 31 to assist in the transition.

News Corp. last week also promoted James Murdoch to run News Corp.’s operations in Europe and Asia, putting him in line to succeed his father, Rupert Murdoch.

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