24/7 Wall St.

Dow Jones & Co. (NYSE:DJ) has announced it is exploring strategic alternatives for its Ottoway group of community newspapers and media franchises. The options under consideration include a possible sale of some or all of those papers and associated media properties.

Ottaway, the local media group of Dow Jones, operates 8 daily and 15 (14 on its own site) weekly community media franchises in many resort communities.  Its own site statistics mention combined daily print circulation of 281,000, Sunday print circulation of 303,000 and online average daily unique visitors of 119,000.

The group’s newspaper assets include:

• The Times Herald-Record, in Middletown, N.Y.;
• Cape Cod Times in Hyannis, Mass.;
• The Inquirer and Mirror in Nantucket, Mass.,
• The Standard-Times in New Bedford, Mass.;
• The Pocono Record in Stroudsburg, Pa.;
• The Record in Stockton, Calif.;
• The Portsmouth Herald in Portsmouth, N.H.;
• Medford Mail Tribune in Medford, Ore.;
• Ashland Daily Tidings in Ashland, Ore.

It hasn’t really been a secret that Rupert Murdoch & Co., a.k.a. News Corp. (NYSE:NWS) was going to begin paring down some of the Dow Jones assets that were either overlapping or too small to make a dent.  When you own (or are soon to own) The New York Post, The WSJ, Fox and much larger online properties, this doesn’t even make a dent.

The company that immediately comes to mind as a buyer for this is GateHouse Media Inc. (NYSE:GHS) due to its ownership of 87 community daily newspapers and it owns many other media properties.

We produce a subscriber letter called the "Old Media/New Media" letter, which gives a weekly outlook and opinion forecast on the convergence (and divergence) of developments in old media and new media alike.  There is a reason that radio companies hate satellite, there’s a reason newspapers lag Internet content, there’s a reason telecom and cable companies fight for your eyeballs and telecom alike, and there’s a reason that old media is trying to become new media.

Jon C. Ogg
November 27, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.