Dow Jones & Company, Inc. History
200 Liberty Street
New York, New York 10281
Telephone: (212) 416-2000
Fax: (212) 416-4348
Sales: $1.77 billion (2001)
Stock Exchanges: New York
Ticker Symbol: DJ
NAIC: 511110 Newspaper Publishers; 511120 Periodical Publishers (pt); 514191 On-Line Information Services; 514110 News Syndicates
Dow Jones is in the business of gathering and distributing useful information to business, investment, consumer, and education markets in the United States and abroad. Our chief objective is to serve the public exceedingly well with quality publications and services. In this endeavor our skilled and dedicated employees are the company's greatest strength. Their successful efforts enhance respect for Dow Jones, the foundation on which our century-old business is based.
- Charles Henry Dow, Edward Jones, and Charles Bergstresser found Dow, Jones & Company.
- Charles Henry Dow becomes a member of the New York Stock Exchange.
- Charles Henry Dow and Edward Jones begin publishing the Wall Street Journal.
- Clarence Barron purchases Dow, Jones & Company.
- Barney Kilgore becomes president and CEO of Dow Jones & Company.
- William Kerby succeeds Kilgore as president and CEO.
- Warren Phillips becomes chairman, president, and CEO of Dow Jones.
- Dow Jones launches Professional Investor Report.
- Asia Business News debuts.
- European Business News is started.
- Wall Street Journal Interactive goes online.
- Dow Jones enters into television agreement with CNBC.
Dow Jones & Company, Inc. is best known for publishing the Wall Street Journal in its U.S., Asian, and European versions and for the worldwide stock market intelligence it provides. Like much of the business-journalism industry, Dow Jones has diversified from print to online newspapers and information retrieval. The company's three main product divisions are information services, business publications, and community newspapers. Although business information and journalism have been the core of Dow Jones in the past, electronic publishing that packages a range of financial information services and community newspaper segments are its future.
The popular reputation of Dow Jones & Company as one of the leading publishers of business news, information services, and community newspapers came nearly a generation after the founding fathers, Charles Henry Dow and Edward Jones, arrived in New York City from Rhode Island in 1879, with a liking for journalism and an ear for financial gossip. In their own day the two men were not especially well known outside trade circles. Dow had worked for a number of newspapers before moving to New York City, where he teamed up with Edward Jones and Charles Bergstresser to found Dow, Jones & Company in 1882. In 1885 Dow became a member of the New York Stock Exchange, where he formulated what would be called the Dow theory of stock market movements. He launched the Wall Street Journal in the summer of 1889 with Jones, a fellow journalist. Knowledge of the very earliest years of the company is sketchy.
Dow is said to have traded only infrequently on the exchange and to have taken his seat as a favor to a friend in immigration difficulties. Yet Dow's membership put him in a good position to observe the exchange and to overhear tips. Dow apparently wrote most of the copy for the early issues of the Journal, working only part-time at the newspaper, while Edward Jones edited the news-bulletin service and acted as managing editor. Reporters Thomas Woodlock and Charles M. Bergstresser covered Wall Street. Many of Dow's early articles were editorials, and information gleaned by Jones in the hotel bars formed the core of the news service.
Dow and Jones joined in a news-exchange agreement with Clarence Barron, the proprietor of the Boston News Bureau. Barron had begun to publish a financial newspaper in Boston two years before the Wall Street Journal was founded, and the two offices, the Journal's in New York and Barron's in Boston, reinforced one another's coverage, with the aggressive Barron expanding into Philadelphia with his Financial Journal in 1896.
Edward Jones left the Wall Street Journal in January 1899. The family relationship between Dow and his cousin by marriage, Charles Bergstresser, who was also a partner in the firm, might have precipitated Jones's departure. Jones continued to live a good life on Wall Street, and his eulogy of Dow three years later was respectful and even loving, calling his former partner a "tower of strength" and one of "the most honest exponents" of financial journalism.
In 1900 the stockholders of Dow Jones, members of the Dow and Bergstresser families, and a few company employees received $7,500 each in addition to $1.20 a share in annual dividends. In March 1902 Clarence Barron purchased Dow, Jones & Company--including the news agencies in Boston and New York and the Wall Street Journal--for $130,000. Dow and Bergstresser resigned their directorships. There was no public announcement, only the appearance of names for the first time on the Journal's masthead. Although Barron had bought the company, he listed Dow, Bergstresser, Woodlock, and J.W. Barney, not himself. In December of the same year, Charles Dow died of a heart attack at age 51 in his Brooklyn home.
In 1905 Charles Otis was elected president, and F.A. Russell was named to the board of directors. Both Jessie Barron, Barron's wife, and Sereno Pratt were reelected directors of the company, and John Lane and Hugh Bancroft were added to the board.
Bancroft and the Barrons' daughter, Jane, married in 1907, and when Clarence Barron became ill, his son-in-law assumed increasing responsibilities in the New York offices. By 1911 the elder Barron's health had improved, but newspaper circulation, advertising, and profits were down, which precipitated a bitter quarrel between Barron and Charles Otis. Barron also fought with Bancroft and soon drove out President Otis and Director Sereno Pratt. On March 12, 1912, he reinstated himself in their places.
When Clarence Barron stormed into the editorial office of the Journal in March 1912 following his election to the presidency, the staff was terrified. Although lore has it that Barron harassed some employees into quitting, he is said never to have fired anyone. According to his contemporaries, Barron was a flamboyant and eccentric figure whose genius for journalism, along with his tough-mindedness, drove the ensuing prosperity of the publication.
The Great Depression and the Wartime Years
In 1921 Barron hired Kenneth Craven (Casey) Hogate, a second generation newspaperman. Later in 1921 Clarence Barron died, leaving an estate of $1.5 million to his daughter Jane Bancroft, who in 1918, at her mother's death, had inherited the majority shares. Hugh Bancroft was elected president and Casey Hogate, vice-president. Bancroft and Hogate managed a steadily prospering company until the stock market crash of 1929, when the paper began to sustain severe losses in circulation and advertising.
By 1932 the company had dropped the comma in its name. Despite the Great Depression, on June 27, 1932, Dow Jones & Company published an 80-page edition of the paper celebrating its 50th anniversary and its new building on Broad Street. Although Hugh Bancroft's name continued to be listed as president, Casey Hogate was chiefly responsible for running the company in the Depression era, as Bancroft's health deteriorated.
In 1938 Richard Whitney--former president of the New York Stock Exchange, whose name was synonymous with the careless profiteering accused of causing the stock market crash--provided the Journal with a significant scoop when he telephoned the newsroom and confessed fraud before turning himself in to authorities. In the post-crash years, Journal editorials defended the financial community and free enterprise and supported the formation of the Securities and Exchange Commission (SEC) and regulatory legislation while condemning Whitney's behavior and Wall Street fraud. Hogate, meanwhile, struggled with a low in circulation in 1938 of 28,000.
About this time, with Barney Kilgore as president and William Kerby and Buren McCormack as directors in the company, Hogate took a risk with the Journal in order to revive the paper. He moved from strictly financial reports to include general news as well. Although Hogate fell into ill health, his formula worked, and his policy was carried out by the others. Kilgore, meantime, made the decision to produce the Monday morning paper on Sunday instead of Saturday so that the news would be fresh.
Throughout the war years the Journal became increasingly news oriented, as political and economic news became inextricably mixed with the fate of the markets. Although at the beginning the editorials were staunchly antiwar, even isolationist, the editorial policy became supportive in due course. After the armistice the trend toward news orientation, developed during the war years, remained with the paper.
Developments in the 1950s, 1960s, and 1970s
On December 21, 1949, Jane Bancroft, the last of the original Barron family, died in Boston. Throughout her life Jane Bancroft had been involved deeply in the growth of the paper, and her last acts had been to create an employee profit-sharing pension plan and to approve the postwar reorganization of Dow Jones.
Bancroft's daughter, Jane Cook, assumed her mother's place on the board, and before the end of 1949 Treasurer William Kerby drafted the new Dow Jones management chart, with Kilgore as president and chief executive officer. At this time the company portfolio included the Dow Jones News Service (in the United States and Canada); a commodity news service; the Journal, with editions in New York, Dallas, and San Francisco; and Barron's, a weekly periodical that continued to struggle with lagging circulation until 1955, when editor Robert Bleiberg turned the situation around. In the 1950s the Journal's layout was modernized, using more two-column heads and readers' letters, cartoons, and drawings. In 1953 new equipment was used to set stock and bond quotations, which made it possible eventually to publish simultaneous editions of the newspaper, with identical news content and typographical quality, anywhere in the United States.
The Journal's longstanding conservative editorial stance was disrupted when it supported the U.S. Supreme Court's decision in Brown v. Board of Education of Topeka, the historic civil rights case of 1954. Kilgore stayed at the helm of the Journal through John F. Kennedy's presidency, and the paper's editorial policies continued to take on issues of widespread social consequence. The Journal reporters, too, became increasingly well known to political leaders. Notoriety was good for business. In 1961 circulation came close to 800,000, with total advertising revenues of $47.7 million. The estimated value of Dow Jones stock was $235 million.
Technology moved the paper forward into the information services industry. By the 1960s facsimile pages of newspapers could be transmitted by coaxial cables and microwave transmitters. By the end of 1964 Dow Jones reported news-ticker clients in 676 U.S. cities and 48 of the 50 states. This business provided the company with the highest revenue after the Journal. With the advice of professional portfolio managers, the company began to move further into allied industries, venturing, for example, into textbooks with its purchase of Richard D. Irwin Inc. in 1975.
The change of leadership traditionally had been smooth at the company helm, and so it was when Kilgore handed over the reins to William Kerby in March 1966. Under the new management Vermont Royster directed editorial policy, and Executive Editor Warren Phillips headed news operations. Within two years the newspaper operation produced 94 percent of Dow Jones's profits, and it reached 1.5 million readers by 1978, when Warren Phillips became chairman, president, and chief executive officer. Dow Jones's operation of the National Observer never took off, and it ceased publication in 1977, when losses totaled $16.2 million after 15 years of existence. Its purchase of Book Digest magazine proved to be disappointing. In 1980 the company was reorganized along product lines into seven divisions under Phillips. While the main product lines had remained steady for nearly a century, revenue potential favored electronic publishing and information services, not the slow-growth textbook and community newspaper segments.
Transition to Electronic Publishing in the 1980s
After being the company's most lucrative business for a century, the Journal began to lose strength during the late 1980s, and electronic publishing became Dow Jones's primary growth sector. The Journal's circulation fell from its 1983 high of 2.11 million to 1.95 million in 1989, a decrease of 7.5 percent. In March 1989 advertising revenues were down for the 19th straight month. For the first quarter of 1989, operating income of business publications fell 33 percent, and profits were down 13 percent in its community newspaper chain. The company had been through difficult times before, but the volatility of the world political and financial scene was changing the financial journalism business. The marketplace was placing increasing emphasis on user-friendly, computerized, fast news delivery. Phillips, observers said, needed to bring the Journal in line with the "real time" requirements of fast-breaking financial news.
The October 1987 stock market crash also had a negative impact on the Journal's financial advertisement revenue. Phillips countered flat revenues by revamping the look of the Journal, expanding it from two to three sections. But all at Dow Jones was not bad. In 1989 American Demographics, owned by the company, reported a 10 percent growth in revenues and circulation. The European and Asian editions of the Wall Street Journal reported modest growth in circulation, Barron's reported steady circulation, and the Far Eastern Economic Review and National Business Employment Weekly were holding their own. Dow Jones also acquired Telerate, a real-time quote service, and sold its textbook division, Richard D. Irwin, for $135 million. The start-up of Telerate's foreign-exchange trading service accounted for some of Dow Jones's downturn in earnings in 1989 and 1990. In 1997 the company sold American Demographics and its associated publications to Cowles Media.
Dow Jones News/Retrieval, a market leader in online databases, was one of several businesses the company brought together to form the Information Group, which grew to 835 employees and $177 million in revenues by 1989. The Information Group had developed an innovative online searching system that made Dow Jones's electronic database more accessible than those of its closest competitors. The major problem with the electronic publishing business had been executives' reluctance to learn computer access codes in order to gain information. Dow Jones's system delivered the information to subscribers automatically. The Dow Jones system ranked and weighed articles by the number of times the user's access term occurred, delivering a text search with more specific targeting capability rather than a lengthy list of peripherally related articles.
Another information service owned by the company was the Dow Jones News Service, called the Broadtape, which supplied information to brokerages, banks, investment houses, and corporations. Professional Investor Report was started in 1987 as a companion product to the Broadtape, focusing on daily trading activity, and it became profitable in its second full year of operation, with a reported 29 percent growth in subscribers. The Dow Jones News Service changed its name to Dow Jones Newswires in 1996. Other company services included DowVision, launched in 1990 as a customized newswire merging information from several databases; and DowPhone, a subscription-based telephone information service for investors, providing stock quotes, news reports, and investment analysis. JournalPhone was a 900-number (pay-per-call) installation derivative of DowPhone offering business and financial news updates. Dow Jones Voice Information Network was the satellite delivery system that provided customized news and information to about 75 voice-service providers.
Changes in the 1990s
During this transition to electronic publishing, Phillips retired from his company positions, first as chief executive officer in January 1991 and then as chairman the following July. Peter R. Kann--a 25-year veteran of the newspaper whom Phillips appointed publisher of the Journal, as well as president and chief operating officer of Dow Jones & Company--became the new chairman and chief executive officer.
By 1990, with a multiplicity of news-service products and its acquisition of Telerate, Dow Jones had positioned itself in the global financial market to expand into intercultural databases. Telerate's foreign exchange operation was the highest risk, most intensely competitive of such ventures. There were about a dozen other Telerate products, including SportsTicker, a sports news service. In 1994 Dow Jones sold an 80 percent share of its successful SportsTicker enterprise to the sports network ESPN. But Dow Jones & Company faced many other challenges during the early and mid-1990s, not the least of which was relatively stagnant growth in its Wall Street Journal subscriber base. New ventures, moreover, met with mixed success. In 1993 the company, in alliance with the Hearst group, launched the successful magazine Smart Money. In 1994 Dow Jones and American City Business Journals launched BIZ, a monthly magazine for small business. BIZ was discontinued in 1995.
Hoping to strengthen its television presence, Dow Jones launched Asia Business News (ABN) in November 1993 and European Business News (EBN) in February 1995. In partnership with ITT Corp., Dow Jones announced plans in 1996 to purchase the New York television station WNYC from New York City for $207 million. With the acquisition complete, the partnership launched a combination business and sports channel, named WBIS+, in January 1997. Later that year Dow Jones and ITT agreed to sell WBIS+ to Paxson Communications for $257.5 million.
In 1996, despite heavy criticism, Dow Jones promised to spend $650 million on its lagging Telerate service. Dow Jones's first major move to invigorate its market share was to rename the service Dow Jones Markets. Kenneth L. Burenga, company and Wall Street Journal president, was appointed chief executive officer of Dow Jones Markets.
The press, market analysts, and even investors were critical of such a large reinvestment in the information delivery service, which had been quickly losing market share to competitors. Although the policy of the Bancroft family had long been that of noninterference with Dow Jones operations, in part to protect the editorial integrity of its news publications, a few of the younger generation of Barron heirs, including the executive director, William Cox III, began to ask questions and make demands of their investments. Cox later resigned.
Despite rumors that Dow Jones could be subject to takeover, the vote-controlling segment of family ownership (the family owned 30 percent of total shares and 70 percent of vote-controlling shares) stood behind the management's $650 million decision. Although the company's earnings would slip because of the reinvestment, Dow Jones was committed to its online market, hoping that long-term earnings potential would outlive any short-term squabbles among investors. To shore up this potential, Dow Jones formed an alliance with Microsoft to upgrade the PC software for Dow Jones Markets.
Subscriber base for the Wall Street Journal had been stagnant throughout much of the 1990s, but ad lineage had increased overall. Still, high newsprint prices cut into profits for the paper until 1996, when advertising lineage increased 13.9 percent, circulation increased slightly, and newsprint prices leveled off. Perhaps more significant for Dow Jones was the early success of Wall Street Journal Interactive, the Internet edition of the venerable paper. The interactive edition was launched in April 1996, and with more than 70,000 subscribers by early 1997, it was the largest paid publication on the Internet (where consumers were accustomed to accessing information for free).
The Wall Street Journal, however, suffered a setback in 1997, when a federal jury in Houston found the paper guilty of libel and ordered them to pay $223 million in damages to MMAR Group Inc., a failed investment company. The suit was filed shortly after MMAR folded. MMAR claimed that the Journal had committed libel while describing MMAR's difficulties with a major client. But the Journal did not agree. "We were chronicling the difficulties of this company," said Managing Editor Paul Steiger. "We did not cause them."
In the late 1990s, despite criticism that it had stagnated somewhat and was no longer capable of making good, quick decisions in the modern marketplace, Dow Jones was a profitable company that had expanded impressively into electronic publishing. It remained, moreover, a respected source of business information and traditional journalism, areas that had established its core business identity from the days of Dow, Jones, and Bergstresser.
Adapting to the Information Age: Toward the 21st Century
By mid-1997 it was clear that Dow Jones Markets was never going to recover from its sluggish beginning. Even with the infusion of $650 million to revamp the struggling subsidiary, the service still lagged behind its major competitors, which were proving far more adept at adapting to rapidly evolving online technologies. Dow Jones's earnings for the first quarter of 1997 revealed a significant decline in the profitability of its financial information services; operating income for the division dropped to $7.5 million, compared with $46.1 million in the first quarter of 1996. By early 1998, Chairman Peter Kann conceded defeat, and Dow Jones Marketing was finally sold in 1998, at a write-off of $922 million.
As the decade neared an end, Kann came under increasing pressure to find new ways to offer Dow Jones shareholders a better return on their investment. In addition to the Dow Jones Marketing disaster, the company's television operations were floundering, with losses of $48 million in 1996 alone. To help shore up its flagging television business, the company entered into a partnership with NBC in December 1998. The move was designed to consolidate the two companies' television news services in Europe and Asia, with the aim of cutting operation and distribution costs and bolstering the global presence of each company. Under the terms of the agreement, CNBC earned the rights to broadcast Dow Jones features worldwide. In addition, Dow Jones gained a stronger foothold in the U.S. television market through the integration of its news stories into CNBC's national programming.
During this time the company also began divesting itself of some of its less vital business sectors. In December 1999 it sold Dow Jones Financial Publishing Corp. to Wicks Business Information, LLC, and in February 2002 it sold four of its Ottaway Newspaper interests to Community Newspaper Holdings for $182 million. The sale of these business units, however, did not signal a wholesale streamlining of the company's holdings. Peter Kann was still eager to carve out a niche for Dow Jones in the highly lucrative technology sector. In June 2000 the company entered into a joint venture with Excite@Home to create Work.com, a business network offering a range of news and services that catered to specific industries. Unfortunately, the new venture was hit hard by the decline in Internet advertising revenues, along with the general lack of funding, in the wake of the technology stock crash, and was forced to terminate operations in March 2001 (Excite eventually folded its own operations in February 2002). While overall the company saw decreased sales in 2000-2001, it remained profitable due in large part to the revenues earned by its most prominent holding, the Wall Street Journal. In the aftermath of some of its recent failures, Dow Jones could still take some comfort in the continued high performance of its core businesses.
Principal Subsidiaries: Dow Jones Newswires, Inc.; Wall Street Journal; Barron's; Ottaway Newspapers, Inc.
Principal Divisions: Information Services; Business Publications; Community Newspapers.
Principal Competitors: Bloomberg L.P.; Gannett Co., Inc.; Reuters Group PLC.
- Bernicker, Mark, "ESPN Buys 80% of SportsTicker," Broadcasting & Cable, November 14, 1994, p. 47.
- Brown, Rich, "Countdown to WBIS Debut; Just What the Focus of New Dow Jones ITT Station Will Be Remains Unclear," Broadcasting & Cable, August 5, 1996, p. 62.
- Carvell, Tim, "Family Disunion at Dow Jones: The Owners Are Restless," Fortune, February 17, 1997, p. 25.
- Chakravarty, Subatra N., "Fortune's Wheel," Fortune, February 10, 1997, p. 16.
- Cohen, Jodi B., "Online Early and Still Going," Editor & Publisher, November 16, 1996, p. 26.
- Dutt, Jill, "Dow Jones & Co. Earnings Plummet," Washington Post, April 10, 1997, p. C2.
- Hackney, Holt, "Dow Jones: More Than the Journal," Financial World, July 4, 1995, p. 22.
- King, Angela G., "Dow Jones Financial News Service Decision Draws Controversy," Knight-Ridder/Tribune Business News, February 26, 1997, p. 226B1059.
- ------, "Dow Jones to Pump $650 Million into Troubled Telerate Service," Knight-Ridder/Tribune Business News, January 21, 1997, p. 121B1060.
- "More Bad News for Dow Jones," Time, March 31, 1997, p. 64.
- Saloman, Jr., R.S., "The Outdated Dow Jones," Forbes, April 7, 1997, p. 132.
- Spurgeon, Devon, "Dow Jones Teams Up with NBC; Companies Hope to Stem Losses Abroad with TV-Internet Partnership," Washington Post, December 10, 1997, p. C15.
Source: International Directory of Company Histories, Vol. 47. St. James Press, 2002.