Media: Wall Street shuffle

Can the top US business daily cut it in Europe?
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The Independent Culture
IT WAS one of the most comprehensive savagings to appear in Vanity Fair. Karen Elliott House, the president of Dow Jones International and also the wife of the corporation's chief executive, Peter Kann, was portrayed by the investigative journalist Robert Sam Anson as a "ferocious" and pushy striver who trod on fellow executives on her swift rise to the top.

Many thought Ms House was finished. At the time, in August 1997, Dow Jones, the parent company of The Wall Street Journal, was suffering, laden with an expensive new financial-services acquisition, Telerate, and its share price was lagging. Members of the Bancroft family, the East Coast wasps who own the company, were openly expressing their dissatisfaction with Mr Kann and the whole board.

But today, as The Wall Street Journal celebrates its 110th birthday, the gravel-voiced Texan lady is still there. Telerate has been sold off. The share price has started to rally. And The Wall Street Journal Europe posted a record sales figure of 68,000 and its first ever profit last year.

"With the single currency, The Journal's American roots are an asset," Ms House asserts in her husky drawl. "People need a publication that has a global perspective. They need to know what's happening across borders."

Ms House has a tough adversary in Marjorie Scardino, who is at the helm of Pearson, which owns the Financial Times. Two tough American women and two giant business dailies are battling it for the European market. But The WSJ Europe, founded in 1983 and edited in Brussels, is still underperforming. Its Continental sales are 55,000, compared with 103,000 and rising for the FT: in the key market of Germany it is outsold almost two to one (21,500 as against 12,000). In Britain, there's no contest, with the FT's 179,000 sale dwarfing The Journal's 13,000.

However, The WSJ Europe's editor, Frederick Kempe, is in bullish mood. "History plays into our hands now," he says. He believes that the euro and globalisation mean a newspaper with an American culture can explain developments better than any other.

But why should Europeans start buying The Journal when there is a plethora of home-grown financial publications - especially when, with its lack of photographs and colour, it looks dowdy?

However, the paper regularly carries original, and offbeat, stories, not all business-related, that are followed up by the British press. Its philosophy, carried over from its American sister, of absorbing facts and presenting forward-thinking analyses inside its news stories makes it stand alone among European newspapers.

"The Journal is in many ways the most European paper of all," says Jonathan Miller, the former managing business editor of The European. "The problem with the rest of the European business press, including the FT, is one of not thinking with a Continental perspective."

Curiously, the main obstacle facing the Continental expansion of the world's biggest business newspaper may be doubts about its own business strategy. Dow Jones officials won't confirm whether a large promotional budget will be assigned, despite a $200m investment in its American sibling. A senior editor on a rival Continental paper commented: "The more narrow- minded will always see it as an extension of US business imperialism. It'll take a lot of promotion to change that." Mr Kempe agrees that there is a problem with perception. "It's a gross misperception that we're writing for American expatriates. That needs to be changed."

However, it is a perception reinforced by criticisms that the paper is reluctant to promote non-Americans and that its coverage of the rest of the world can still look like it was written by and for Americans. And, with an average year-on-year increase of fewer than 2,000 readers, the real question is: can The WSJ win over the European business community? The problem is whether a good product priced at pounds 1.25 a day and perceived as quintessentially foreign is enough to stop the FT - the market leader - gaining a stranglehold on the market The WSJ's editors claim is theirs for the taking.

On Wall Street, the historical critique of Dow Jones has been that, as a company run by journalists (both Ms House and chief executive Mr Kann are Pulitzer Prize winners) it lacks the business edge of rivals, such as Pearson. And, as a source close to the Bancroft family said: "The product isn't the problem."

But with US sales strong (at 1.8 million) and the paper's interactive, subscription-only website widely regarded as the most successful of its kind, insiders say that the Bancrofts are happy to hold their peace for now. Ms House appears to have quieted her critics, for the moment at least, and the Battle of Euroland promises to be a long one.