Is This Synergy?: The WSJ Sandbox in Rupert's Digital Playground

Let's not be confused between the tattered paper sandbox -- the Wall Street Journal -- Rupert bought and the digital playground he's building. The sandbox occupies a nice, prestigious place in the playground, but it's the playground -- all things digital, including TV (Fox News Channel, Fox Business Channel), video and the Internet -- that makes a growth business of the deal. It's the sandbox that's gotten all of the attention, now going forward with its own fancy editorial review board. But it's the fit of the sandbox into the playground that may pose the rub, and the drama, in the years ahead.

The sandbox has its own storied rules. Do your homework. When there's a fight, listen to all sides. Don't throw sand in somebody's face unless you've got the goods on them. Certainly those rules will be tested under Rupert. But the sandbox has sturdy walls.

I'm not one who thinks the editorial board will be much protection. Really, it's Rupert's new Tea Club. If you think you're going to hear any rancorous announcements out of Rupert's Tea Club, forget it.

Editorial board member Nick Negroponte turns out to be a Friend of Rupert, who has contributed more than $2 million toward Negroponte's "One Laptop per Child" campaign.
Of course, if you think that Lou Boccardi, Jack Fuller, Tom Bray, Patty Dunn --- or shall we call them The Defenders of the Old Order -- are going to being blowing any whistles, forget about it. The meetings should be a good time, accompanied by smoked salmon and fine bottles of Aussie Sauvignon Blanc.

The Negroponte brouhaha does force "the explanations" to begin early, even before ink is applied to the contract. Astounding sight to see WSJ managing editor Marcus Brauchli begin the interim with a vigorous defense of Negroponte's association with Murdoch in his own paper -- ""We did not envision that members of the committee, News Corp. and Dow Jones would have no associations among or with each other, only that they would be people of integrity who are committed to ensuring our editorial independence."

Of course, that is the way the business world works, and not a bad thing about. Making connections, taking care of friends, supporting their good causes, passing them a lead here and there, giving them a break -- that's the way it's done.

But this is an editorial board. The whole idea of it -- can we forget this quickly -- is to insulate the Journal from Murdoch's well-demonstrated political influence and interference. It needs to have an arms-length relationship to News Corp, otherwise why spend the money of the salmon and Sauvignon. To see a Journal editor defending it, with this rationale at this point, is amazing. But it's just the perfect coda to last week's drama.

But, I digress.

No I don't think we'll see a lot of turmoil within the sandbox. Brauchli and team are outstanding journalists, and Murdoch knows many eyes will be upon the paper for the next year.

We'll see the sparks flying when Rupert starts applying the s-y-n-e-r-g-y that is the heart of the business deal. Synergy with the Fox Business Channel, which launches in October, is key. Put aside the CNBC/WSJ exclusivity agreement for a moment and consider that Murdoch has already plotted out the channel's market position -- "pro-business." Let's see, that's roughly analogous to Fox News being "pro-American." And we can see how that has worked out journalistically, as the network has made an Orwellian mockery out of "fair and balanced journalism".

Imagine the crawls. Replace the omnipresent orange alert levels with colors representing how pro- or anti-business Congress is as it contemplates tax laws, regulation and what went wrong with the mortgage industry. Imagine the kinds of anchors Fox News has used, to steer news coverage in favor of whichever politicians are in favor.

Now imagine, the Wall Street Journal reporter entering this arena. You think Dennis Berman, Kate Kelly or Greg Ip is going to fit comfortably on that set, offering a nuanced journalistic view of what's going on. Think again.

From a corporate synergy view, we could call it execution risk. Or, more colloquially, it could be a match made in hell, and one that could blow up as Journal reporters bridle.

But there is a solution, and I'd be surprised if Murdoch's people aren't already working on it. They've already got a problem on their hands as WSJ reporters are committed exclusively (we believe) to appear on CNBC -- Fox Business Channel's rival -- into 2012. CNBC, of course, is going to see this as double-edged sword. Yes, it may fun to deprive Murdoch of a value he just gained, but then again, why promote your main competitor?

And let's remember what Murdoch bought. Not just the Wall Street Journal, but Dow Jones.

As far as we know, the CNBC deal applies only to Wall Street Journal reporters. So think Marketwatch. Think Barron's. Think, in some nested branding, The Journal's Marketwatch, as just one example.

Murdoch may well be able to get away with Journal Lite, as he uses the brand across cable, satellite and the Web. Why endlessly negotiate with those whiny professionals at WSJ, when you can hire younger, less experienced, cheaper-by-the-dozen, more-willing-to-bend-to-the-party-line Journal-branded journalists?

In fact, if legal problems get in the way, Murdoch can even sidestep the Journal brand for now. There are those two other magic branding words: Dow Jones. You know, the words that get repeated tens of thousands of times daily -- for free -- as stock indexes are reported. Good reputable names -- a billion plus dollars of goodwill in that? -- and ones that can be be stamped across the foreheads of those newly branded, telegenic reporters and commentators.

So as the action starts in News Corp's rapidly expanding digital playground, let's watch all parts of it and not just the sandbox that's gotten all the attention so far.

Bad Rupert, Good Rupert, here.

Complete Content Bridges' Dow Jones Coverage, here