Would A Dow Jones/Yahoo Combo Make Sense?

If GE (GE) isn't interested in making the purchase and doing a spin out, then Maybe Yahoo! (YHOO) should buy Dow Jones (DJ) -- its market cap is over $41 billion versus News Corp's (NWS) $23.5B.

Yahoo! could match Murdoch's $5B offer, and essentially be a White Knight to BOTH family shareholder groups. It should be acceptable to the Bancrofts, who have been rather equivocal in responding to Murdoch's offer, as well as the the Ottaway family, a minority partner in Dow Jones who "released scathing statements yesterday saying that a takeover by Rupert Murdoch’s News Corporation would ruin Dow Jones and its crown jewel, The Wall Street Journal."

All things considered, a combination of Yahoo!/DJ makes much more sense than either a NEWS CORP/DJ or even the recently rumored MICROSOFT (MSFT)/YHOO!

Yahoo would grab a primo media property, one with a growing web presence that fits into its already existing business model. And, it captures a strong way to cross advertise to a highly sought after, high-income demographic. It also adds some bulk to an entity increasingly falling behind Google (GOOG) in the online advertising space. It would add another $1.783B per year in revenues (a near 30% bump up for Yahoo, which did $6.4B last year). It also adds another $386 million in profits (FY 2006), almost doubling Yahoo!'s profitability.

Food for thought . . .

UPDATE:

It turns out that this same idea was floated by Alan Meckler back in December; and Eric Savitz blogged extensively about it (See Should Yahoo Buy Dow Jones? The Debate Rages On and Dow Jones and Yahoo, Part III: Suddenly, Someone Decided It Was My Idea)

Sources:
Bubble 2.0
Randall W. Forsyth
Barron's, May 7, 2007
http://online.barrons.com/article/SB117832309363992875.html

Moved to Yahoo Finance: Bubble 2.0
http://biz.yahoo.com/barrons/070505/sb117832309363992875_id.html?.v=1

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Even the Bulls Aren't So Bullish
Kopin Tan
Barron's, May 7, 2007
http://online.barrons.com/article/SB117832005932692770.html

Moved to Yahoo Finance: S&P High Brings Muted Revelry
http://biz.yahoo.com/barrons/070505/sb117832005932692770_id.html?.v=1