Murdoch has long admired the Journal, and his ownership of it would mark a capstone in the career of the 76-year-old Australian-born executive, who is arguably the most powerful media mogul on the planet.
"Dow Jones is so attractive to News Corp. for a couple of reasons: Because the Wall Street Journal is a subscription-based Web site, it would help News Corp. to beef up its online ad revenues, and also because News Corp. is about to launch its Fox Business News channel, buying Dow Jones would give it a number of different experts and financial information it could use on that channel," says CBS News business reporter Alexis Christoforous.
But the offer ran into trouble Tuesday when the Bancroft family, which controls the shareholder vote of Dow Jones, said it would oppose the deal.
Dow Jones said late Tuesday that the Bancroft family said they would vote shares representing just over 50 percent of the company's voting power against the deal.
However, the story is far from over. Unlike the Grahams at The Washington Post Co. or the Sulzbergers at The New York Times Co., families which control their respective publishing companies, the Bancrofts aren't involved in the day-to-day operations of the Journal or Dow Jones.
It's also possible that other bidders could emerge for the company, which has long been coveted by other media owners for the powerful voice the Journal has in the business world.
"There's one name on the top of everybody's list: the Washington Post company," Greg David of Crain's New York Business, told CBS News.
The Bancrofts have been unwilling to sell in the past, but their moves to reduce their economic ownership in Dow Jones also signal their desire to have investments elsewhere.
Peter Kreisky, president of Kreisky Media Consultancy, said Dow Jones has "blaringly underleveraged assets" that could be turned around by someone like Murdoch, and that Dow Jones' current management has been "very risk-averse to leveraging their brand."
The offer values Dow Jones at $60 per share, a massive premium of 65 percent over Dow Jones' closing share price before the deal was announced. The shares shot up $19.87, or 54.7 percent, to close Tuesday at $56.20 in very heavy volume on the New York Stock Exchange after reaching as high as $58.47.
Murdoch's bid comes at a time of unprecedented deal activity among newspapers, which are struggling to reinvent themselves as readers and advertising dollars increasing move to the Internet.
In an interview on News Corp.'s Fox News Channel, Murdoch said the Journal would benefit greatly from being part of a larger media company and had great potential for increasing both its print circulation as well as its online presence worldwide. The Journal has been the most successful U.S. newspaper at getting readers to pay for online subscriptions.
The prospects of ownership by Murdoch faces significant opposition within Dow Jones. The union representing its employees, the Independent Association of Publishers' Employees, issued a statement Tuesday saying that Murdoch "has shown a willingness to crush quality and independence, and there is no reason to think he would handle Dow Jones or the Journal any differently."
Dow Jones raised the ire of shareholder advocates two years ago by making changes to its rules that would allow the Bancroft family to maintain voting control even if they liquidate part of their holdings. According to Dow Jones' most recent proxy statement, the family owns 24.7 of the economic interest in the company and controls 64.2 percent of the shareholder vote.
News Corp.'s main businesses are now in television and entertainment — including the Fox broadcast network and the Twentieth Century Fox movie studio — but Murdoch got his start in newspapers and still owns many of them in England and Australia, in addition to the New York Post.
Murdoch has long been know to have an interest in owning Dow Jones, although he said in a public interview in February that he had been "cooling" on the idea and doubted that the Bancroft family would sell. However, he also said then that the Journal had a "wonderful brand" and could be doing more to go up against The New York Times.
"What better asset is there in the world of business than the Wall Street Journal?" David said. "He's saying, clearly, I want to be king of business news."
Murdoch is known as a tough competitor in the newspaper world and recently ramped up the circulation of the gossip-heavy New York Post with a 25-cent cover price. The Post, which has lost tens of millions of dollars a year, raised its price to 50 cents Monday.
Last month, Tribune Co. agreed to go private in an $8 billion deal led by real estate investor Sam Zell, and last year, McClatchy Co. acquired what was then the second-largest newspaper publisher in the country, Knight Ridder Inc., following a shareholder revolt.
At the same time, the New York Times Co. is facing investor unrest over its own sluggish financial performance. Last week, shareholders withheld 42 percent of their votes for directors, a public rebuke to the Sulzberger family, which controls the company.
In addition to The Wall Street Journal, Dow Jones also publishes Dow Jones Newswires, Barron's, several leading market indicators including the Dow Jones industrial average and a group of community newspapers.
News Corp. also owns the popular social networking site MySpace and satellite broadcasters in Europe and Asia.