While it's not an offer from Yahoo, Dow Jones (publisher of The Wall Street Journal and other financial news outlets), has received an unsolicited takeover bid from News Corp. Rupert Murdoch and Co. are offering $5 billion for the company -- a premium of 65 percent over Dow Jones' closing share price Monday. Some of that premium has disappeared, though, as shares have shot up more than 50 percent today. The company says management and the Bancroft family, its controlling shareholder, are considering the offer, but it's hard to see how they could refuse it, though there's speculation it could set off a bidding war. A News Corp.-DJ tie-up could make a lot of sense, once you get over the disconnect between MySpace and the WSJ. News Corp.'s roots are in newspaper publishing, and its recent push to beef up its online offerings would be bolstered by the content Dow Jones generates, in addition to DJ's strong existing online properties. Another interesting issue the offer raises is how many newspaper companies' ownership structure may be holding them back. The Bancroft family essentially owns all of Dow Jones' class B shares, which carry ten times the voting power of ordinary share, giving them control of the company. The New York Times Company and The Washington Post Co. also have similar ownership structures, which are coming under fire from investors. Backers of such ownership schemes say they're necessary to ensure the companies' commitment to quality journalism, though at this point they seem more crucial to ensure the owners' healthy egos than anything else. The contention that "quality journalism" is at automatically at odds with traditional public ownership or profit-driven private ownership isn't true. In fact, it seems more likely that many newspapers' idea of what they should be doing is an anachronism that's fallen out of step with the market, hence their general lack of success in the internet age -- and a change in their old-style ownership and control structures may be necessary to change their fortunes. Update: Rather unsurprisingly, the Bancroft family says it won't support the offer. However, in after-hours trading, Dow Jones shares haven't pulled back too much, so the market must believe some sort of deal will still happen.
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