Rupert's renewed love affair with print faces a test

Within months, Murdoch was on the acquisition trail. With the exception of a nightmare period of financial crisis from 1990 into the following year, his News Corporation empire has expanded at a dizzying rate ever since he made his first big purchase outside his native Australia by acquiring the News of the World in 1968.

Deal-making is part of his DNA, and the greater the obstacle the more he seems to revel in the chase. Last year he saw off much of America's journalistic establishment to buy the Wall Street Journal. His efforts to transform that paper have only just begun with his decision to oust Marcus Brauchli, a member of the old guard, as managing editor last week.

Now he is bidding to buy another New York-based newspaper, Newsday, and it appears that he will yet again run up against tough political opposition because he already owns the New York Post and two TV stations in the city. He is taking advantage of a relaxation in cross-ownership rules by the US media regulator, the Federal Communications Commission, that aroused controversy when it was first mooted.

A Senate committee - backed, incidentally, by two Democratic senators, Hillary Clinton and Barack Obama - wants to see the rules re-established because of renewed concern about media consolidation. The old argument is rearing its head: is the media mogul getting too big for his boots?

Murdoch's purchase of Newsday is not assured. The owner of the New York Daily News, Mort Zuckerman, is also bidding for the paper. But, with the greatest respect to Mort, Rupert doesn't lose too many of these takeover battles.

Meanwhile, to illustrate just how far the Murdochian tentacles spread, there are persistent rumours that his Asian TV division, the Star group, is plotting a print media initiative in India. The guy just doesn't stand still.

But there is no doubt that Murdoch's main obsession at the moment is transforming the Journal. That purchase cost him $5.6 billion. The fact he is now willing to offer another $580 million to buy Newsday has got some Wall Street investors scratching their heads.

Is Murdoch spending too much time - and money - on print? Like many media firms, News Corporation's share price has been on the slide, falling around 25% in the last six months.

Some think Murdoch, who has been warning that the US economy has taken a turn for the worse, should be worrying about what to do next with social networking website MySpace and maximising revenues at his Fox TV channels. Over here there is still the worrying issue of BSkyB's 17.9% stake in ITV - which has halved in value - and the challenges with his UK newspaper empire, not least a free London paper that lost £17 million last year.

Richard Greenfield, media analyst at Pali Capital, reportedly said last week that Murdoch "has not communicated a clear long-term strategy for the newspaper business". Lauren Rich Fine, who followed the newspaper business at Merrill Lynch, wrote in an online article: "If I were a NWS shareholder" - NWS is its Stock Exchange ticker - "I would be angry. The average NWS shareholder doesn't own it for its newspapers; in fact, they likely own it despite the newspapers."

Now aged 77, with his son James anointed heir apparent, there is a sense that Rupert's determination to shake up the Journal is the last major flourish in his career - a defining moment when he could unseat The New York Times and make the Journal, already with a circulation of two million, the paper of record in America. There is an urgency to what he is doing in New York.

Murdoch has never bought simply to possess but to bend to his will in the belief that he can do the job better. So the men he parachuted in from London to New York to run the Journal - former News International chairman Les Hinton and Times editor Robert Thomson - are clearly imposing a change of culture on a staid paper.

The Journal's famous, and hugely indulgent, long-winded features have vanished from the front page. Stories are shorter. The coverage is being broadened from business and finance to politics and lifestyle issues. In that context, the departure of Brauchli, a Journal lifer, was not a surprise.

For Murdoch, there is no middle way. The Sun would not rise, said his detractors. It did. A tabloid Times will not work, said critics. It has done. Sky TV will not take off, said virtually everybody. It is an undoubted success.

But there is a problem with success in the media. While we cannot doubt that Murdoch would improve the fortunes of ailing Newsday, if he is allowed to buy the paper, it increases yet again the size of the behemoth that is News Corporation. That raises issues about the wisdom of there being too few media owners, raising fears of a lack of diversity and plurality. For now, in the crumbling world of US newspapers, some of the regulators - and a fair few journalists - are just glad Murdoch is still in the mood to buy.

That leaves an interesting question: When Rupert leaves the stage, how will his successors at News Corporation regard the newspapers in their empire?