Rupert Murdoch's Newspaper Obsession A "Significant Drag" On News Corp Bottom Line

Mr. Murdoch, as much old-fashioned press baron as 21st century multimedia mogul, faces a depressing reality: his lifelong fondness for newspapers has become a significant drag on the fortunes of his company, the News Corporation.

The company recently took $8.4 billion in write-downs, including $3 billion on its newspaper unit, which includes The Journal's publisher, Dow Jones & Company. Meanwhile, the News Corporation's stock price has fallen by two-thirds in the last year, a sharper decline than at media conglomerate peers like Time Warner and Viacom.

In more vibrant economic times, investors and Wall Street analysts were more willing to look past Mr. Murdoch's attachment to newspapers -- the newspaper segment is now the company's biggest single source of revenue, about 19 percent in the most recent quarter. But they find that a tougher chore these days, as other media struggle and newspapers suffer through their worst slump since the Depression.

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