Dow Jones family clears way for sale

NEW YORK - The family that controls Dow Jones & Co. says it is warming to the idea of selling the company to Rupert Murdoch or someone else, citing the ''evolving competitive environment'' in which the publisher of The Wall Street Journal operates.

To get an idea of just how fast that world is evolving, look no further than a blockbuster deal to combine two major financial news providers, Thomson Corp. and Reuters Group PLC, which first leaked out just two days after the Bancroft family's initial dismissal of Murdoch's bid in early May.

That deal, currently worth $17.8 billion, will create the world's largest provider of real-time financial news and information, putting Dow Jones in an even tougher spot as it tries to expand its presence in electronic media.

Dow Jones has been diversifying beyond printed newspapers for years, building up its paid subscription Web site, consolidating its ownership of the news database Factiva and acquiring an online financial news site called MarketWatch.

But with a behemoth like Thomson-Reuters about to be created, its very profitable business-focused electronic media could come under even more pressure.

Dow Jones was a pioneer in providing real-time financial news to investors, but it's a business that's been ''commoditized over the years,'' says Jamie Rizzo, a media and entertainment analyst at Fitch Ratings, a debt analysis firm. ''You have Reuters, Bloomberg and Yahoo - it's a different ball-game today.''

While the Journal remains Dow Jones' best-known property, it's also the least profitable. Dow Jones took in more than two-thirds of its profit last year - but just 23 percent of revenues - from products aimed at business customers such as Dow Jones Newswires, Factiva and licensing services.

The consumer media segment, meanwhile, consisting largely of the Journal, made up about 63 percent of Dow Jones' revenues last year but was the least profitable of its three divisions, making up less than a quarter of total operating income. Even Dow Jones' relatively small community newspaper business was more profitable than the Journal's business unit last year.

Murdoch says he can change all that, giving the Journal more resources to expand its coverage in Washington and overseas while also spending more to grow the Journal's business online. He also sees opportunities to use Dow Jones' pristine brand name and deep talent pool to launch a business-focused cable news network later this year.

The Bancroft family seems to be coming around. After initially rebuffing Murdoch, the family released a statement late Thursday saying they had agreed to Murdoch's request to meet in person to discuss his offer.

The family said it ''remains resolute in its commitment to preserve and protect the editorial independence and integrity of The Wall Street Journal,'' which has been in the family's control for more than a century.

However, after a lengthy review of Dow Jones' businesses and the marketplace in which it operates, they also determined that ''the mission of Dow Jones may be better accomplished in combination or collaboration'' with another organization, possibly News Corp., Murdoch's media conglomerate.

While the family may be warming to the idea of selling to Murdoch, others in the company remain staunchly opposed. Former board member Jim Ottaway Jr., who controls 5 percent of the company's shareholder vote, is opposed to Murdoch, as is the union representing Journal employees.