REFILE-EXTRA! Wall Street Journal heads into NY hyperdrive

(Refiles to fix spelling in last paragraph)

* Murdoch aims to grab readers, advertisers from NY Times

* NY Times says never shys away from competition

* Some full-page Journal ads could go for $19,000

By Jennifer Saba

NEW YORK, April 23 (BestGrowthStock) – The Wall Street Journal is
offering some businesses firesale prices for full-page ads in
its highly anticipated New York edition to seduce advertisers
away from The New York Times.

Wall Street Journal Managing Editor Robert Thomson and
other executives plan to unveil the edition during a press
briefing on Monday morning.

The section will cover local news, culture and sports, and
will be incorporated within the Wall Street Journal. It will be
circulated in the New York area.

Rupert Murdoch, whose News Corp (NWSA.O: ) owns the Journal,
is betting that New Yorkers want an alternative to the Times,
and he is willing to risk the ire of any shareholders not
interested in pulp and ink.

David Joyce, an analyst at Miller Tabak, said investors
“tend to hate” the newspaper assets of News Corp.

“They wish it could be spun out, but you have to go into
News Corp assuming they’re going to be around. Newspapers, the
power and influence that come along with (them), are integral
to the News Corp strategy.”

To entice advertisers onto the pages of the New York
edition, the Wall Street Journal is deeply cutting the cost of
a full-page ad and, as a bonus, throwing in a full-page ad in
the New York Post, also owned by News Corp.

Some local businesses can buy a full-page ad for $19,000,
according to a Wall Street Journal presentation to advertisers
that was shown to Reuters by a source. That is a steep discount
to full-page print ads in large newspapers that can cost up to
$90,000.

A Dow Jones source, who spoke on condition of anonymity,
said only a few New York area businesses not currently
advertising in the Wall Street Journal or the New York Post
were being offered the discount.

“With News Corp having a vast array of diversified assets,
they can afford to essentially buy market share in the New York
newspaper market by offering cut-rate advertising,” said Miller
Tabak’s Joyce. “That could perhaps hurt New York Times’
finances.”

WHACKED BY RECESSION

The newspaper industry, already weakened by a migration of
advertising to the Internet, has been roiled by one of the
worst economic downturns in generations.

Days before the new edition of the Wall Street Journal was
due to hit the streets, several newspaper companies, including
the New York Times Co (NYT.N: ), published quarterly financial
results that revealed it could be a long road back to ad
revenue growth.

The Wall Street Journal, however, showed advertising
revenue growth in the first quarter.

“Competitors have been accusing each other of rate cutting
since the beginning of time,” Michael Rooney, chief revenue
officer of the Wall Street Journal, said in an emailed
statement. “The simple fact is that the Times’ ad revenue is
down 12 percent and our ad revenue is up 25 percent in the
latest quarter.”

Scott Heekin-Canedy, president of the New York Times, told
analysts and investors on an earnings call on Thursday that the
newspaper was feeling some heat in the New York advertising
market. “We are seeing pressure, but we don’t believe it’s so
far having any effect on our business,” he said.

On the call, Times Chief Executive Janet Robinson ticked
off a litany of strengths, including higher online traffic and
national advertising share, to explain why the New York Times
was prepared to do battle over the city’s newspaper market.

“We don’t shy away from competition,” Robinson said. “We
never have, we never will.”

In an interview on Friday, Heekin-Canedy said the New York
Times relies on the strength of its relationships with
advertisers. “We do smart discounting and come up with ways
besides price to achieve objectives.”

HELLO AMERICA

The Wall Street Journal has long been viewed as a vehicle
to reach national audiences.

“A number of our clients that run in the Wall Street
Journal are happy for the broad reach against that core
audience,” said Scott Kruse, managing director of GroupM, an
advertising agency that places ads for clients such as Sprint
Nextel Corp (S.N: ) and Volkswagen (VOWG_p.DE: ). “A lot of our
clients don’t just want New York.”

Kruse said the New York edition of the Wall Street Journal
would have a daily circulation of 235,000, which he described
as a small add-on for Journal advertisers. “The question is do
you really need a local overlay on top of what you are doing.”

Sharon Enright, associate media director for advertising
agency RPA, said the Wall Street Journal had approached them
about the New York project but, “It doesn’t make sense for us.”
Enright said that she and her colleague Marie Zymkowitz buy ads
in the Wall Street Journal to reach a national upscale
audience.

TODAY NEW YORK, TOMORROW?

Under Murdoch, the Journal has the coffers to fund the
experiment. The newspaper already produces a weekly section
dedicated to San Francisco and it cranked up distribution in
Detroit when the Detroit Free Press and the Detroit News cut
home delivery.

“I would not underestimate Mr. Murdoch because he is
playing with a large sum of cash,” said Benchmark analyst
Edward Atorino.

“Some people are waiting with bated breath, including
Janet.”
(Reporting by Jennifer Saba, additional reporting by Yinka
Adegoke; Editing by Tiffany Wu, Toni Reinhold)

REFILE-EXTRA! Wall Street Journal heads into NY hyperdrive