• by February 23, 2006

In yet another clear example of the inroads online publishing is making against its traditional print counterpart, Dow Jones announced a reorganization that includes a combined print and online Wall Street Journal news operation.

Dow Jones also signaled its belief in the power of online communications by naming the executive who had been in charge of the company's electronic publishing operation to head the largest and most influential unit of the newly restructured company.

The company said Wednesday that it would reorganize into three separate units focused on what it labeled consumer media, enterprise media, and community media. It was the first major move by newly appointed CEO Richard Zannino, who was named to the top post in January. He succeeded Peter Kann, who remains Dow Jones chairman.

The first unit, known as the Consumer Media Group, will be led by L. Gordon Crovitz, who will become executive vice president of Dow Jones, president of Dow Jones Consumer Media Group, and publisher of The Wall Street Journal Franchise. It will include the print and online editions of The Wall Street Journal, and Barron's, the online financial news site MarketWatch, and SmartMoney magazine, a joint venture with Hearst Corp.

The combination of the print and online editions of the company's flagship newspaper is significant. Only a few years ago, online operations at major news organizations like The Wall Street Journal were considered poor cousins to the more prestigious and influential traditional news departments, which enjoyed their own identity and cachet quite separate from the online group.

But now, with traditional newspaper ad revenue in decline and with online editions rapidly gaining in popularity among advertisers and readers, the online operations are enjoying a newfound respectability. The New York Times made a similar move last year when it also combined its print and online news operations--a move that would have been considered unthinkable only a year earlier.

Wall Street Journal Managing Editor Paul Steiger will be responsible for news operations of all print and online editions of the newspaper. He reports to Crovitz.

Crovitz is no stranger to online media businesses, and his choice is representative of Zannino's stated goal of increasing the company's presence in the growing arena of online, Internet-based communications. A Rhodes scholar with a law degree from Yale, Crovitz started his career at the Journal as an editorial writer. Since 1998 he has served as senior vice president of Dow Jones and president of the company's electronic publishing group, which included the online editions of the company's newspapers as well as the Dow Jones Newswires and Financial Information Services.

Two other units were also created in the reorganization, the Enterprise Media Group and the Community Media Group. The Enterprise Group includes Dow Jones Newswires, Dow Jones Licensing Services, Dow Jones Indexes, Dow Jones Financial Information Services, Dow Jones Reprints and Permissions; and Factiva, a joint venture with Reuters. It will be run by Clare Hart, previously CEO of Factiva.

The Community Media Group includes the Dow Jones's portfolio of 15 daily and 19 weekly Ottaway community newspaper properties in nine states. It will be led by John Wilcox, who will become senior vice president of Dow Jones, president of Dow Jones Community Media Group, and chairman and CEO of Ottaway Newspapers, Inc.

The company said the reorganization will result in cost savings of an estimated $20 million per year, largely as a result of 20 layoffs. Severance payments and related expenses will cost the company about $14 million. Dow Jones said $2.8 million of those costs was recorded in the fourth quarter of 2005, and the remainder will be recorded in this year's first quarter.