Dow Jones' Fortune Lies in Wall Street Journal Turnaround
Dow Jones� senior management made separate presentations at the UBS Media Week and Credit Suisse First Boston Media conferences this week. The business theme for The Wall Street Journal was one of continuing caution sprinkled with a little optimistic dust. Rich Zannino, executive vice president and chief operating officer, talking about ad linage, said, �We saw a dramatically improving trend in September (up 23% per issue), and October (up 13% per issue) continued September's momentum. But this trend abruptly reversed in November, which was down 1.2% per issue. And the bouncing continues in December, where we expect per issue linage to be back up - in the low to mid single digits. So we're clearly not out of the woods yet.� (By the way, those comparisons are with especially week year-earlier ad linage trends, but why pick nits?) Peter Kann, chairman and chief executive officer, said he needed to see three or four quarters of consecutive ad linage gains before he sees a turn. Until then, he�s �cautiously optimistic.�

From that, it looks like all the steps have been taken to position the franchise product to leverage the turn when it comes.

Electronic publishing, which is my immediate area of interest, posted a revenue gain of three percent over the first nine months of 2003. The segment is anchored by Dow Jones Newswires (67 percent of revenues in the first nine months down from 73 percent in 2002). But, Newswires revenues declined five percent due to end-market weakness in the US. That was offset by a 22 percent increase in consumer electronic publishing revenues, which includes The Wall Street Journal Online. Dow Jones Indexes revenue rose 26 percent. Operating profits for Electronic Publishing were up 14 percent and margins were 21 percent up from 19 percent in 2002.

Like The Wall Street Journal, it looks like Newswires too is leveraged for any upturn.