By: Jennifer Saba
Yesterday’s announcement that Richard Zannino has been appointed CEO of Dow Jones was more a surprise in the timing than in the choice. Zannino has long been considered by Wall Street as the heir apparent of outgoing CEO Peter Kann.
“I think it’s an orderly transition, maybe a little sooner than Wall Street expected,” said Ed Atorino, managing director at Benchmark Co.
The timing of the announcement might have more to do with tamping down of rumors that the company’s controlling family, the Bancrofts, has been anxious to put Dow Jones on the block. In a note issued Tuesday by Merrill Lynch analyst Lauren Rich Fine, the appointment “could be an effort at quieting any disgruntled shareholders or family members suggesting a lesser likelihood the company could be sold near term.”
Goldman Sachs analyst Peter Appert welcomes the change of the guard in a note issued this afternoon: “We like Rich Zannino — he brings cost discipline and strategic vision that Dow Jones will require to rebuild profitability of the next several years,” the report said.
Since 2001, Zannino, who comes from a financial background, has been involved in the day- to- day strategy of Dow Jones including recent acquisitions, cost cutting measures and the launch of Weekend Edition.
Yet, it’s still symbolic that Dow Jones chose someone with financial chops to lead the company rather than someone with journalism experience like Kann, who worked his way up in the newsroom or his wife, Karen Elliott House, publisher of The Wall Street Journal, and also considered to be in the running for CEO.
Dow Jones has been hit with disappointing results in the last couple of years, mostly because the company is at the mercy of financial and technology advertising — two categories that have been in the doldrums.
The key to Dow Jones’ success will be an ad recovery. Benchmark’s Atorino explained there isn’t anything wrong with Dow Jones despite its lackluster stock performance. “I think Rich is a great choice. All he needs now is a turn-around in advertising and he’ll be golden.”