In a dramatic turnabout, the Bancroft family, which controls Dow Jones and the Wall Street Journal, agreed to discuss a sale of the company to Rupert Murdoch’s News Corp after initially refusing to do so. There are a number of hints that the turnabout was driven by concern over the future of Dow Jones in a digital media world:

The question of whether Dow Jones — whose market capitalization has jumped to more than $4.5 billion since Mr. Murdoch’s bid — has enough scale to compete globally is fueled by recent upheaval in the news and financial-information industries, including the migration of news online and a broad decline in advertising and circulation in the newspaper industry.

And from the New York Times:

“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation,” a statement from the family said.

and

More decisive was a presentation given by the chairman of Dow Jones, Richard F. Zannino, that laid out the company’s future with and without a sale. For several family members, Mr. Zannino was far more persuasive in describing the former, suggesting that the company was unlikely to achieve results that would match the value of Mr. Murdoch’s offer.

Interesting that the Wall Street Journal article spelled out the issue while the New York Times articles leaves you to extrapolate what is meant by “evolving competitive environment” and “company’s future without a sale” — but it’s a given now that the digital media revolution is the handwriting on the wall for every traditional media company.

There has been much hand wringing over what Rupert Murdoch might do to the Wall Street Journal, i.e. compromise its editorial integrity. You can see the hand wringing in the New York Times lede:

The family that controls Dow Jones & Company, publisher of The Wall Street Journal and one of the great names in American journalism, announced yesterday that it would consider selling the company.

From one “great name” to another. At the D5 conference, News Corp COO Peter Chernin said:

The notion that we would change The Wall Street Journal is counterintuitive. The reason we are offering a premium is because we believe that it’s a fantastic publication. I would argue that we are the publisher and guardian of some of the finest publications in the world. We would never ‘Page 6-ify’ The Wall Street Journal.

The concerns over journalistic integrity, while having some substance, are largely a red herring. The real issue boils down to whether News Corp, owner of MySpace and Fox Interactive Media, can enable the Wall Street Journal to thrive in a digital media world that is threatening newspaper brands with extinction.