• Bloomberg News, Monday, May 14, 2007 11 AM

According to one measure used by financial analysts, Rupert Murdoch's $5 billion takeover bid for Wall Street Journal publisher Dow Jones & Co. values the publisher higher than Google. Let's explain that: The $60-per share offer represents 40 times DJC's projected 2007 earnings, compared to the current price of Google's shares, which values the search giant at about 32 times projected '07 earnings. But if Microsoft approached Google for a buyout (will never happen), it would offer a price per share valuing the company at an even higher price per projected earnings for the year, given the Google's sustained rate of rapid growth.

That's why many analysts don't see the logic in News Corp.'s high offer. "Dow Jones's organic growth doesn't come anywhere close to Google," UBS analyst Brian Shipman said in a research note. If you're going to support that kind of valuation, it should have that kind of growth." He rated Dow Jones a "neutral." Robert F. Bruner, dean of the University of Virginia's Darden School of Business and author of "Deals From Hell," said: "It's hard to justify an acquisition multiple as high as Murdoch's bid for Dow Jones."

Which means News Corp. is likely to win its bid to acquire the company. Murdoch has touted the success of properties like WSJ.com and Marketwatch as one of the reasons for his interest. Michael Chren, managing director of Allegiant Asset Management Co., said Murdoch most likely sees ways to integrate these online properties into his global broadcast, cable, Internet and print businesses.

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