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Dow Jones & Co on Tuesday announced that Richard Zannino would succeed Peter Kann as chief executive next month, and that Mr Kann’s wife, Karen Elliott House, would retire as publisher of The Wall Street Journal.
Ms House, who was once considered a contender for the top job, will not be replaced, the company said, while her husband will remain as chairman until next year.
The move represents a departure from recent tradition for the media company since Mr Zannino is not a former journalist, like his predecessors, but an executive with an MBA.
It comes at a time of intense pressure for Dow Jones as well as the broader newspaper industry. New competition from the internet for readers and advertising revenue has forced newspapers into rounds of cost-cutting and desperate attempts at reinvention as they try to maintain profitability.
Dow Jones has been particularly hard hit by the drop in financial and technology advertising after the stock market collapse in 2001.
The company expressed some optimism yesterday, saying that based on improved performance at the Journal’s print and online businesses, it expected fourth-quarter earnings to exceed its previous forecast. The company now expects fourth-quarter earnings, excluding special items, to be about 40 cents a share, above its previous estimates of the low to mid-30 cent range.
That news, and Mr Zannino’s appointment, helped to push the shares up 10.2 per cent to $39.14 on Tuesday.
As chief operating officer for the last three years, Mr Zannino has participated in several recent initiatives to revive the company. These included the launch last year of a Weekend Journal to lure affluent advertisers, the acquisition of MarketWatch, to provide an enhanced online advertising platform, the relaunch of the Journal’s Asian and European editions in tabloid format, and the planned shrinking of the US edition to save money on newsprint.
“I don’t think there’s going to be a dramatic or significant change in our strategy going forward,” Mr Zannino said in an interview on Tuesday, noting that restoring revenue growth was a top priority. He also rejected recent speculation that members of the Bancroft family, who hold a controlling stake in Dow Jones, were planning to sell.
Gordon Crovitz, the head of online publishing, had also been considered a contender to replace Mr Kann, 63, who is nearing the company’s mandatory retirement age.
Mr Kann has served as Dow Jones’ chief executive since 1991. He and Ms House were both Pulitzer Prize winners at the Journal. But their leadership came under fire in recent years as advertising continued to slump and the share price tumbled, including an 18 per cent drop last year. Continued cost-cuts also rankled the newsroom.