Devoted to Managers and those that seek to improve their management skills

When the bid by Rupert Murdoch and News Corp. (NWS-A) was first announced, it looked like it was a far too steep of a price to pay for Dow Jones (DJ), which includes the venerable Wall Street Journal. The offering price of $60-a-share is a 67 percent premium to where the stock languished at the time of the offer.

But from Buffett's viewpoint it's really not too large of an offer at all. As a matter of fact he hints on an interview with CNBC (GE) that it could go for a lot higher.

Buffett stated: "There are people around the world who would salivate at buying The Wall Street Journal, and they have big checkbooks." In other words to be able to buy a property with the brand power of the Wall Street Journal would open up pocketbooks far wider than the $60 that Murdoch offered per share.

Buffett continues: "That's not a high price for Dow Jones if you add the psychic income that you get plus the cash income. So it's not like they're turning down the deal of a lifetime if they turn it down."

In something that was very interesting to me - because I immediately thought of Buffett when I heard that Murdoch made the bid - was when he was asked about whether he would consider buying Dow Jones ... and his response was "very, very unlikely."

"I couldn't do it for Berkshire," Buffett said. "I don't do anything for Berkshire that's un-economic. I do some things for myself that aren't economic." I follow Buffett closely so I knew that he wouldn't think of something like that for the Berkshire Hathway (BRK-A) portfolio of businesses he runs.

But it was somewhat intriquing that he hinted that he may have a personal interest in the publication and business. Through Berkshire Buffett owns The Washington Post (WPO) and The Buffalo News, so he is very familiar with and understands the industry.

One thing the deal did do was to raise some questions about the dual-class structure of the Dow Jones shares which enables business owners to keep voting control of a company while still selling shares to the public.

Hassan Elmasry who is a Morgan Stanley Investments portfolio manager criticized the dual-class structure as allowing companies to have no accountability to shareholders and thus being able to misuse capital; which he accuses the New York Times (NYT) of doing which employs the dual-class structure.

Interestingly, News Corp. itself also employs this structure, along with Google (GOOG).

Berkshire Hathaway also operates under this structure, one reason why Buffett was quick to defend the practice.

Back to the News Corp. bid for Dow Jones. Regardless of what happens, if the company sells, it will probably fetch a far higher price than the one offered by Murdoch. This has nothing to do with making money, as the newspaper industry is generally finished over the long-term. This is all about prestige. And is also about the influence it can wield, not the money it will be able to generate. Buffett has been saying this for a long time.