CORRECTED: Murdoch's Dow deal may up Asia clout, but not China

(Corrects Wall Street Journal Asian subscription numbers in 11th paragraph to 80,000-90,000, not 18,000-19,000)

By Michael Smith

SYDNEY (Reuters) - News Corp.'s $5 billion bid for Dow Jones & Co. Inc. may give a boost to Rupert Murdoch's plans to expand in Asia, although China still poses a challenge for the media tycoon.

The media giant has had mixed success in Asia where it owns Hong Kong-based broadcaster Star TV and Star India but has made several unsuccessful attempts to tap China's rapidly growing media market.

Dow Jones' presence in Asia through the Wall Street Journal Asia and Dow Jones Newswires would give Murdoch a further foothold in the region but was unlikely to make a significant difference to his China ambitions, analysts said.

"It would offer him more of a base in that area, but it is still Murdoch rather than News. So if the Chinese have a problem with Murdoch the person, then him owning Dow Jones won't greatly get over that problem," independent media analyst Peter Cox said.

News Corp. has failed to team up with local TV stations and newspaper publishers and now sees new media as one of its best strategies to gain a foothold in the Chinese market. It launched a test of its online social network MySpace last month.

Murdoch, whose China-born wife Wendi has been involved in recent deals, has a choppy history with Beijing. In 1994, he dropped BBC World Service Television from News Corp.'s satellite broadcast to China.

The move was seen as a conciliatory gesture after he angered Chinese authorities by remarking that no dictatorship was safe in the media age. Beijing responded by tightening controls on private ownership of satellite dishes.

"Between him and Wendi they are putting a lot of work into China and it is perhaps the last great frontier. China offers News Corp. the possibility of being bigger than Europe and the U.S," Cox said.

"The problem for him and everyone else that has gone in there is to build a viable business."

OVERHAUL OF ASIA BUSINESS

Dow's Wall Street Journal Asia has 14 bureaus in Asia, including Shanghai and Beijing. Dow Jones Newswires has 20 bureaus in Asia. Dow also owns monthly magazine the Far Eastern Economic Review.

"There's about 80,000-90,000 circulation for the Wall Street Journal in the Asia Pacific region. News Corp. may enjoy a stronger footing in this region, particularly in India, if the deal goes through," said Vivek Couto, executive director of Media Partners, Asia.

"More importantly, it gives the Fox business channel a lot of synergies. It can use business reporters from Dow Jones to enhance its coverage when it launches its services in Southeast Asia, and India later."

Dow Jones insiders say the company's Asian publications have underperformed its U.S. assets in recent years and a News Corp. takeover could mean further cost cuts or a migration to pure online publications.