View from City Road: Another battle in the Murdoch-Black war

What is Rupert Murdoch up to this time? By purchasing a 1.7 per cent stake in the Fairfax newspaper group he has both opened up a new drama in the Australian newspaper industry and cocked another snoot at his rival Conrad Black in the process.

Mr Black is already in the driving seat at Fairfax, having won control in late 1991 after a fierce bidding war against Tony O'Reilly, the Irish businessman. Mr Murdoch's motives are as inscrutable as ever but there seems not much doubt the move is in some way linked to his to-the-death battle with Mr Black in the British newspaper market.

Through the Telegraph, Mr Black controls 25 per cent of Fairfax. The second-largest shareholder, with 15 per cent, is Kerry Packer, the Australian television and magazine tycoon. Mr Black and Mr Packer are prevented by regulatory obstacles from raising their stakes much further. With so many Australian titles already in his locker, Mr Murdoch would face equally insurmountable difficulties in bidding for outright control.

But together, Mr Packer and Mr Murdoch - who have joined forces on several media ventures before - might be able to squeeze Mr Black out. If Mr Black ever had any doubt that Mr Murdoch's ultimate game plan is to wipe him clean off the face of the earth, the events of the past few weeks must have removed it.

As one Sydney newspaper executive said yesterday: 'Murdoch doesn't do anything this expensive just to have a dig at a rival. He's serious'.