Which way now?
Already the victim of cutbacks in recent years, Dow Jones' Asian operations, including The Wall Street Journal Asia, face an uncertain future with Rupert Murdoch's US$5.6 billion takeover of the US media company.
Launched in 1976, the Asia edition of the Journal has struggled since the dotcom crash of 2000. After five years of losses, executives say the paper returned to profitability last year following the move from a broadsheet to a tabloid format. But the return to the black doesn't guarantee a secure future under Mr Murdoch.
Veteran Hong Kong-based columnist and businessman Stephen Vines said he suspected Mr Murdoch might take a tough line with the international editions of the journal. 'I think the first thing that you'd have to say is that these publications [the Asian and European Wall Street Journals] must be vulnerable in the sense that they're not profit-making,' he said.
The Wall Street Journal Asia employs more than 70 news staff in 14 bureaus across the region, uses printing plants in nine cities and has a circulation of 80,000 copies. The big shift to a compact format appears to have helped turn around the losses of previous years. Revenues rose more than 20 per cent last year and are up 35 per cent in the year to date, according to Christine Brendle, Dow Jones' managing director of consumer media in Asia.
'It's a tough one, what to do with the Asian Journal,' said Vivek Couto, executive director of the independent research firm Media Partners Asia. 'The pan-regional advertising market isn't as high-growth as it was 10 years ago, and its prospects are fairly limited.'
This year is turning into a watershed year for mergers and acquisitions in the media industry, and Mr Murdoch's purchase of Dow Jones is the biggest story of them all.
Analysts were taken aback by the speed with which Reuters agreed to merge with Thomson Financial in May, and many were stunned by the news that Mr Murdoch had set his sights on Dow Jones, the most respected name in business news.
In Asia, the company publishes The Wall Street Journal Asia, Dow Jones Newswires and the Far Eastern Economic Review. It also has a stake in CNBC, which has an Asian financial news channel.
With US critics questioning whether Mr Murdoch will respect his promises to maintain The Wall Street Journal's standards or drag it downmarket, observers are wondering what he could have in mind for operations in this region, especially considering the cutbacks under the present management.
In 2004, Dow Jones changed the weekly Far Eastern Economic Review into a monthly publication written largely by outside contributors, and fired 80 staff, about a 10th of its workforce in Asia. The previous year, some Journal Asia editors in Hong Kong lost their jobs after much of the newspaper's production was centralised in New York.
Philip Bowring, a former editor of the Far Eastern Economic Review and a respected media commentator in the region, said he did not think 'Asia adds up to very much in terms of Murdoch at the moment'. He said both the Review and the Journal Asia were 'shadows of their former selves', and predicted that Mr Murdoch would leave them pretty much to their own devices.
'I doubt that he'd close them down, but I doubt that he'd build them up,' said Bowring, who criticised Dow Jones' management of the Review after the US company took control of the magazine in 1987. Instead, Bowring said Mr Murdoch was likely to focus on North America, the source of 70 per cent of his revenues and an even higher percentage of Dow Jones' revenues. 'The main area of activity will be in the US, and I think will be TV and electronic media,' he said.
In the longer term, however, Bowring said Mr Murdoch might use his Dow Jones content to challenge CNBC's position in Asia through a financial channel on either Star or Fox.
But Mr Murdoch may have more dramatic changes in store. In a June interview with Time magazine, the News Corp chairman floated a series of potential game-changers.
'What if, at the Journal, we spent US$100 million a year hiring all the best business journalists in the world? Say 200 of them. And spent some money on establishing the brand but went global,' he said.
'And then you make it free, online only. No printing plants, no paper, no trucks. How long would it take for the advertising to come? It would be successful, it would work and you'd make ... a little bit of money.'
Vines said he doubted whether Mr Murdoch was impressed with the Journal outside America, partly because of his bad experiences with regional media. 'He had a very hard time with Star, and he's shown no enthusiasm in Europe, Australia or America for anything approaching a regional publication,' he said.
Mr Murdoch's dealings with Asia include News Corp's 1986 purchase of the South China Morning Post for US$300 million. The purchase from HSBC, Hutchison Whampoa and Dow Jones was his first investment in an Asian media asset.
It was considered a good if uncharacteristic buy for someone with a reputation for mainly targeting distressed media assets. At the time, the Post had a healthy circulation of 75,000 copies and profit margins of about 32 per cent.
Mr Murdoch privatised it and, in 1990, raised US$290 million by floating a 49 per cent stake on the Hong Kong stock exchange - essentially doubling the value of the paper in four years.
He wasn't finished. In two deals in October 1993 and April 1994, New Corp cashed out its remaining 51 per cent stake in the Post for US$482 million (when a unit of the Kerry Group, the current owner, purchased a controlling interest).
Rather than plough more money into the regional journals, observers think Mr Murdoch will focus on the newswires side, and use the content for his new financial channel on Fox and possibly Sky.
Mr Murdoch's newspaper savviness has not always translated well to his investments in broadcast media in the region. Months after paying US$525 million to buy Asian satellite network Star TV from Richard Li Tzar-kai in 1993, Mr Murdoch gave a speech in London where he famously proclaimed: 'Advances in the technology of telecommunications have proved an unambiguous threat to totalitarian regimes everywhere ... And satellite broadcasting makes it possible for information-hungry residents of many closed societies to bypass state-controlled television channels.'
Those comments did not air well in Beijing, and officials shortly afterwards issued a nationwide crackdown on privately owned satellite dishes.
Critics contend Mr Murdoch spent most of the following decade attempting to mend fences with Beijing. In 1994, Star TV dropped the BBC from its programming lineup - a move Mr Murdoch denies was politically motivated.
His book unit, HarperCollins, published a biography of Deng Xiaoping written by the elder statesman's daughter in 1995. In 1998, Mr Murdoch ordered HarperCollins to spike an autobiography by former Hong Kong governor Chris Patten.
'I was probably in the wrong there,' Mr Murdoch told Time. 'It's been a long career, and I've made some mistakes along the way. We're not all virgins.'
If indeed Mr Murdoch was attempting to curry favour with Beijing, the results of his efforts are questionable.
In 2005, after the mainland imposed new restrictions on foreign broadcasters and curtailed joint-venture production of television content, Mr Murdoch described the government as 'paranoid' and said his business in China had 'hit a brick wall'.
His acquisition of Dow Jones and the Journal - which has won two Pulitzer Prizes in the past five years for hard-hitting coverage of China - is unlikely to help in that department. 'News in mainland China is going to be tough anyway,' said Mr Couto. 'It's more about leveraging for other markets and platforms. I don't think Murdoch is going to lay off people, I think he's going to invest in growth. The Journal has already been through several rounds of layoffs.'
Jack Shafer, editor-at-large at the online magazine Slate, predicted that Mr Murdoch would pursue his 'maximum pragmatism' philosophy in Asia.
'He'll likely kowtow to the Singapore government in a way Dow Jones has refused,' Mr Shafer said. 'And the tough, Pulitzer-winning coverage of China by the WSJ will probably be a thing of the past.'