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View Diary: Murdochgate: News Corp. Hemorrhaging 1,000's of Stores from its Supermarket Ad Division (33 comments)

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  •  There was a TON of slime involved in this: (3+ / 0-)
    Recommended by:
    ericlewis0, SadieSue, Creosote

    Not only did Murdoch's company hack Floorgraphic's computer system and use the customer data there to start bad mouthing the company behind the scenes, but by the time the whole thing was over (Murdoch et al found guilty), Floorgraphic was so weakened financially that Murdoch bought them out.  Floorgraphic had become successful by launching the concept of in-store ads placed on the floor of grocery aisles and Murdoch decided he wanted that business along with other elements of store advertising.)

    Murdoch's store advertising organization (which offered to handle both in-store ads and out-of-store promotional mailings - those damned multi-page shopper/coupon fliers that clog up your mailbox) had been growing its market by massively undercutting competitors to land contracts with store chains to handle their advertising.  Once they had the contracts, they began squeezing the stores....jacking up rates and telling them, if you want this kind of advertising you have to buy this as well or pay massively more for the single route.

    That approach made them a ton of money, but if this diary is true, it appears that they also made themselves a ton of customer enemies and the castle is crumbling.

    The Murdoch organization has a long track record of corporate nastiness.....evidence suggests that in order to win over a foreign cable TV distribution network, they hacked the dish encoders of their competition and flooded the market with the hacked code.  The sudden loss of revenue weakened the competitor and Murdoch won.

    And of course there were all the assurances given to the Bancroft family, previous owners of the Wall Street Journal by Murdoch....assurances that he would preserve elements of the paper's operations....assurances that were quickly dropped once he had ownership.

    The Wall Street Journal and its parent company, Dow Jones was owned by hands off owner, the Bancroft family from Boston. He had tried to buy the newspaper several times before but his offer was always snubbed by its owner. Later on when he learned that there are divisions among the Bancroft family, Rupert seize the moment and offered to buy The Wall Street Journal at 2x of its price per share during that time.

    The staggering offer split the Bancroft family even further and children are running to sue their parents if they’ve agreed to sell to Murdoch which according to the newspaper’s management could certainly damage the quality of The Wall Street Journal if Rupert would use what he practices for years in his own newspaper business.

    Before the Journal was sold the Bancroft family got an assurance from Murdoch that the journal’s editorial quality will be protected and Murdoch also promised that he would certainly maintain the quality of the paper.

    In 2007 Dow Jones entered into an agreement with News Corporation that resulted to Murdoch’s ownership of The Wall Street Journal. Predictably Murdoch broke the promised that he had made and brought in his own people who certainly defeated and punctured the egos of the people on The Wall Street Journal.

    Bancroft members also said that if they had known of Murdoch's involvement in the British phone hacking scandals, they might not have agreed to the sale.

    Look....this may hurt Rupert a bit, but his empire is so large that a loss here is offset by gains elsewhere.  Unless he croaks first, I predict that while his organization will face major charges and penalties for the phone hacking scandal, he will survive handily and continue forward.  

    Son James may be out of the limelight, but he clearly shares his father's ethics (or lack of them) and for Rupert, would be a worthy successor.

    Free markets would be a great idea, if markets were actually free.

    by dweb8231 on Wed Jan 16, 2013 at 11:30:43 AM PST

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