• by Joe Mandese  @mp_joemandese, October 18, 2006

In a deal that will accelerate the restructuring of two of the biggest business and financial news brands, Dow Jones & Co. Wednesday said it agreed to acquire joint venture partner Reuters' 50 percent stake in Factiva, an electronic news retrieval service that will figure prominently in Dow Jones plans to move away from print media. For Reuters, the divestiture comes as it is moving away from its legacy as a financial news brand, and trying to evolve into more of consumer brand for global news and information.

"Together with the previously announced sale of up to six of our community newspapers, this reflects our determination to reduce our reliance on print publishing," Rich Zannino, CEO of Dow Jones, which previously announced plans to six of its Ottaway community newspapers.

Dow Jones said the acquisition will free the company of joint venture restrictions that will enable it to develop new applications for Factiva, and to better integrate it with its other news products and services. Dow Jones is publisher of The Wall Street Journal, the Dow Jones news service, and various newspapers.

Factiva is leading provider of global business news, research products and services, and competes in a news retrieval marketplace that has historically been dominated by Reed Elsevier's Lexis-Nexis service.

The deal also signals Reuters shift away from financial and business news retrieval business, which at one time made it a major early player developing a marketplace for electronic buying and selling for media on Madison Avenue. Prior to merging its electronic news retrieval service into the 50/50 Factiva joint venture with Dow Jones, Reuters had tried to move its electronic news service into vertical industrial markets, including the advertising business.

Coupled with the AdValue Network, a proprietary system enabling agencies to buy advertising from media companies, Reuters had tried to become a dominant desktop backbone for media departments and media agencies. During the late 1990s, Reuters claimed to have helped process billions of dollars worth of media buys, before a new market of Web-based media transaction systems blossomed and crashed during the dot-com bust. Recently, the market for electronic trading systems has begun to pick-up on Madison Avenue, with a variety of business models and trading solutions, including a high-profile project developed by an ad-hoc task force of major marketers and agency executives that is planning to deploy a test utilizing eBay's transactional system.

Dow Jones said it will pay $153 million in cash and $7 million in stock to acquire Reuters' 50 percent stake in Factiva and will fund it primarily with proceeds from the sale of its community papers.

Dow Jones this morning reported that print advertising volume for the Ottaway Newspapers declined 9.2% in September. That compares with an 8.2% decline at flagship Wall Street Journal. Dow Jones, however, reported a 10.2% ad page gain for Barron's magazine, and a boost in international advertising sales for The Wall Street Journal Asia and The Wall Street Journal Europe.