Exclusive: Rupert Murdoch Speaks

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The owner-in-waiting will eventually want to see some, starting on Page One. He has little taste for the quirky "A-head" stories that run in the center columns. "To have these esoteric, well-written stories on Page One every day is great," he says, in a tone of voice that implies it's not so great. "But I still think you want some hard news. I'd try to keep many more of them for the weekend. I'm sick of putting the Journal aside because I don't have time to get through these stories." He might also relaunch the Saturday edition with a glossy magazine section.

When Murdoch talks about the future of newspapers, you get a sense of how contemporary he really is. Circulation and advertising revenues are ebbing away everywhere, he notes, proportional to broadband penetration. "You've really got to worry," he says. "Tribune Co.'s revenues [in May] dropped 11% across broadcasting and newspapers. That's huge. The Times dropped 8.5%. Half of men under 30 aren't reading print newspapers, and there's no sign that they come back as they age."

How does he respond to this bleak picture? By musing about investing even more in newspapers. "What if, at the Journal, we spent $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 — a great, great newspaper with big, iconic names, outstanding writers, reporters, experts. 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. Then again, the Journal and the Times make very little money now."

In other words, he hasn't decided what to do with the Journal, beyond investing in a beefed-up Washington bureau and more foreign bureaus, the better to challenge the Times and the Washington Post. He notes that the Journal leadership has tried to maintain the print circulation by not giving everything away online, but the percentage of heavily discounted print subscriptions is rising rapidly, a sign of ill health. WSJ.com has more than 900,000 subscribers, making it the largest paid-subscription site on the Web, but less profitable, Murdoch suspects, than it might be with a hybrid model — with free users driving ad sales and premium users willing to pay for high-end content. "But it needs to be studied carefully," he says.

Murdoch sensed the power of the Web not so much as a user but as a businessman who watched the bottom line. In late 2004, he says, he "began to feel the erosion of advertising in print and even the stalling-out of ads on television. So I said, Better pay attention to this." He set up Fox Interactive Media in Los Angeles and started looking for something to buy. Peter Chernin and Ross Levinsohn, then the head of FIM, brought him a games company called IGN, a sports site called Scout and MySpace. He snatched MySpace from archrival Redstone, which made his victory all the sweeter. (Redstone called Murdoch's victory a "humiliation" and later fired Viacom CEO Tom Freston.) Murdoch was surprised by what happened next. "It was an education for me, the way it took off. It was the cool young site. Now the average age is climbing."

MySpace's much smaller archrival, Facebook, is surging: what started as a narrower college site is broadening and accelerating, inviting everyone to join and offering new software tools so people can, for instance, start microbusinesses on their Facebook page. But as MySpace showed signs of reaching saturation, Murdoch began very preliminary, exploratory talks about trading the site for 25% or more of Yahoo! "Terry Semel was enthusiastic about it," he says of the then Yahoo! CEO. "We were looking to see if it was a good idea. I wasn't sure." Now Semel is gone, and Murdoch needs to see what Yahoo! will become under its new boss, co-founder Jerry Yang.

As younger media executives fall by the wayside (Semel is 64), Murdoch keeps fighting on all media fronts. "A media company is basically anything that communicates with people — news, ideas, entertainment, advertising — and allows them to communicate with each other," he says. "But the Internet is teaching people every day to expect everything for free. So it has to be advertising supported."

Murdoch is both the latest and the last of the outsize media moguls like Henry Luce, William Randolph Hearst and William Paley, men who loved their properties and used them to make fortunes and influence politics and society. But unlike many of his contemporaries, Murdoch has consistently been able to see around the corner. Love him or hate him, he moves into the 21st century as a new kind of media titan. Much as he'd like a legacy, he knows that worrying about it isn't good for business in the ever-morphing media environment. The Bancrofts relished their role as guardian of the Journal's independence, but they did not pay close attention to the business at hand. Murdoch is way too rich to care about money and way too involved to let the Journal's garden go unweeded. But he's still going to be Rupert, a man who buys ink by the barrel and isn't afraid to apply it.