Insight: Dow Jones CEO's sudden exit followed revenue slide
By Jennifer Saba
NEW YORK (Reuters) - Lex Fenwick's surprise exit from Dow Jones came after some banks and other financial clients balked at the former chief executive's ambitious new product, DJX, which sent sales tumbling, according to people familiar with the matter.
Several sources said institutional sales have dropped significantly since the April 2013 launch of DJX, a single Web-based platform that bundles together Dow Jones Newswires, Factiva, the Wall Street Journal and other Dow Jones products for institutional customers.
DJX's rigid pricing structure left little room for negotiation, and alienated some retail brokerages, banks and other financial institutions that prefer to cherry pick products and bargain on price, said the sources, who include Dow Jones customers. They did not want to be identified because they were not authorized to speak publicly about the company.
Dow Jones' institutional revenue fell by $11 million in the three months ended September 30, according to the fiscal first quarter results of parent News Corp, which did not provide the total figure. Figures for the December quarter have not been disclosed ahead of News Corp's results report on Thursday.
A spokeswoman for News Corp declined to comment on Fenwick or the sales performance of DJX, which is still in beta. Fenwick did not respond to emailed requests for comment.
When Fenwick's departure was announced on January 21, News Corp CEO Robert Thomson said in a statement that the company was reviewing its institutional strategy and planning improvements to DJX. News Corp did not give a reason for why Fenwick was leaving less than two years after joining, and it is not clear if DJX's performance was the key issue.
"We're identifying how best to improve DJX, including making the product more flexible in order to better serve customers," said Ashley Huston, a spokeswoman for News Corp. "We'll have more specific details on this, including product announcements, in the very near future."
Some analysts said Fenwick's departure was a signal to investors to brace for weak quarterly numbers from Dow Jones when News Corp reports results on February 6. Since News Corp split off its more lucrative entertainment and cable properties into 21st Century Fox Inc last year, Dow Jones is among the most important profit generators for the global publishing company. Continued...