GE Not Media-Shy

With a growing chorus of investors clamoring for General Electric (GE Quote) to shed its media assets, news that the conglomerate is exploring the acquisition of a downtrodden newspaper publisher may be the last thing that Wall Street wants to hear.

In the end, however, shareholders don't pay GE's CEO, Jeff Immelt, to tell Wall Street what it wants to hear. They pay him to create long-term value.

While any investments GE makes in Dow Jones (DJ Quote) would likely be pilloried in the short term by shareholders who are already frustrated with its stagnant stock, such a move could one day be vindicated.

A spokesman for GE declined to comment for this story, but a source familiar with the situation confirmed last week that GE is in talks with Pearson (PSO Quote), the British publisher of the Financial Times, about a bid for Dow Jones that could rival News Corp.'s (NWS Quote) $5 billion buyout offer.

Previously, GE held talks with Microsoft (MSFT Quote) about cobbling together an offer, but no agreement could be reached. Its latest negotiations with Pearson are in preliminary stages, and they may never result in an actual bid.

That said, the GE-Pearson talks appear to be the most credible alternative to News Corp. that has emerged since that company's rich offer put the publisher of The Wall Street Journal in play. Moreover, serious reservations about selling to News Corp. have been expressed by Dow Jones' employees; its former chairman and CEO, Peter Kann; and most important, its controlling shareholders -- the Bancroft family.