Murdoch's empire grows; how will GCI respond?

This chart compares the stock performance of Rupert Murdoch's News Corp. vs. Gannett since the start of the year. The blue line is News Corp. Gannett is red. You get the picture. More on that unpleasantness later in the post.

First: I'm flat-out envious of the folks at News Corp. -- even with my qualms about CEO Murdoch's rapacious appetite. But as people keep saying: The man loves newspapers. And he also embraces Web 2.0 in ways I'm not sure Gannett is willing to try. Just today, News Corp.'s Fox Entertainment Group said it had acquired social-network Beliefnet, a site devoted to spirituality and religion. Murdoch is adding that to a digital stable that includes MySpace, the hugely successful investment that made him one of the oldest webpreneurs.

It'll be interesting to compare his web strategy with the one Gannett executives are scheduled to discuss Wednesday morning during a conference with Wall Street media stock analysts. And that's just the digital side of a competition between News Corp. and Gannett that's now moving into higher gear.

Murdoch (left) has made clear several ambitions with his purchase of Dow Jones & Co., publisher of the Wall Street Journal. He wants to make access to the Journal's website free; that would boost its audience considerably -- at the expense of other newspaper websites. Second, he wants to give the Journal a jolt of non-financial news so it has a more national reach. He's especially focused on Washington political coverage (watch out, New York Times!) and popular culture (get ready, USA Today!).

And if Murdoch came knocking with the right price, perhaps Gannett's board would be willing to talk about USA Today. Romenesko noted three months ago that John Hartman, who's written two books about USA Today, said Murdoch had reportedly offered to buy it a decade ago for $1 billion. Murdoch's USA Today could go full-tilt with Fleet Street-ish celebrity coverage in ways unsuitable at the Journal.

Even in a year when newspaper stocks have been getting pounded, News Corp. has done relatively OK, Google Finance data show. Its shares are down only 5.2% year-to-date vs. a 40.9% dive bomb in Gannett shares. (Smelling salts, anyone?) And that's part of why News Corp.'s market value is so much bigger than other, more newspaper-centric companies like Gannett.

I've been watching Gannett's market capitalization (chart, above) fall $100 million here and $200 million there for weeks now; these figures are as of today's closing stock prices. (Just curious: Does it matter to anyone in the Gannett Tower if the Washington Post Co. overtakes Gannett's market cap?)

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