By Adam Lashinsky
May 1, 2007

I interviewed Rupert Murdoch a couple years ago in his expansive West Coast office on the historic Fox lot in Los Angeles for an article about his Internet ambitions. This was after the MySpace acquisition but before the rest of the world realized that Murdoch has gotten it right this time. As we wrapped up the interview — Murdoch graciously apologized for cutting things off, but he had to scoot for his regular physical at UCLA’s hospital — he stood to shake my hand and said, “Hope you got some good copy.”

Right there I was reminded why journalists are so smitten with Murdoch, even the ones who disagree passionately with his politics. The guy loves journalism. I mean, he really loves the give and take, the analysis, the insight, the nasty fights and so on. The same stuff journalists love. He’s also passionate about business, which is why he never has made a secret about coveting The Wall Street Journal, in his — and everyone else’s view — the class act of daily business journalism in the English language. He has watched the Journal maintain its greatness, even as it demeans itself with a smaller size and endless lifestyle stories. Not that Murdoch judges. His papers publish the lowest of the low and the highest of the high. The Journal would find its place at the top of the News Corp. (NWS) heap. (My bias should be noted. I write day and night for Fortune Magazine, but I’m also a regular commentator on the Fox News Channel, a News Corp. property.)

Will the Bancroft family sell? The market has an opinion on the answer to that question. It bid up shares of Dow Jones (DJ) by 57% moments after Dow Jones disclosed Murdoch’s offer. Who else might jump in? When one of the greatest properties around is up for grabs, everyone needs to look. That will include the Washington Post Company (WPO), Gannett (GCI) and Pearson (PSO). Goldman Sachs (GS) just raised a new $20 billion investment fund. Who knows? Maybe Goldman dreams of better coverage in the Wall Street Journal.

A final note. Shares of News Corp. have been on fire for a while now. Since the acquisition of MySpace parent Intermix, actually. And the market approves of its bold move today, initially sending the shares down less than 3%. People forget, however, that for years Wall Street punished News Corp. with a “Murdoch discount.” Investors worried about the downside of a long-term-focused chief executive who periodically makes giant bets that don’t always pay off. An example: The Wall Street Journal recently highlighted the bizarre story (subscription required) of Gemstar (GMST) CEO Henry Yuen, in which News Corp. invested and ended up taking $6 billion in writedowns. The Journal called that move “a low point in Mr. Murdoch’s career as an investor.”

I’m guessing the Journal’s reporters and editors — and investors — won’t view Murdoch’s latest gambit as a low point of any kind.

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