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Bloomberg's 'Spygate' Marks Murdoch's Latest Salvo

NEW YORK ( TheStreet) - It's been 13 days since The New York Post's Mark DeCambre broke the news that Bloomberg reporters allegedly used proprietary information from the company's terminals to write about investment bankers, including those at Goldman Sachs (GS).

In a media feeding frenzy fueled in part by Schadenfreude, the Post has beat a steady drum. The U.S. tabloid of Rupert Murdoch's sprawling News Corp. (NWSA - Get Report), the Post can't seem to get enough of a story that places rival Bloomberg uncomfortably in the spotlight.

Also see: Bloomberg Privacy Breach Angers Wall Street Traders

And no wonder. Keeping Bloomberg's perceived and real transgressions in the news cycle is arguably good for Murdoch's own newsgathering operations, The Wall Street Journal, Dow Jones Newswires and the Post.

Both the Journal and Dow Jones compete head-to-head with Bloomberg's juggernaut of 2,400 reporters worldwide. Having worked at Bloomberg News, I can attest to its spirited rivalry with the Journal, made more intense by the ever-increasing number of former Journal editors and reporters who now work for the company, founded by New York Mayor Michael Bloomberg.

Also see: Broadcasters Fear the Music in Aereo Fight

For News Corp., which was battered but has arguably survived the U.K.-phone hacking scandal, taking Bloomberg News down a few notches might be good for business, and even staff morale.

Call it a Cold War between two of the largest business-focused news organizations in the world, and two of its biggest personalities. Murdoch's right-wing politics are well known, and though Mayor Bloomberg is decidedly pro-business, his positions on a variety of social issues - gun control, public health - are solidly liberal.

Murdoch took some 50 years to build News Corp. into a company with $34 billion in annual sales while it took the Mayor about 30 years to build his enterprise into a $7.9 billion operation that essentially sells one thing: financial information services.

Today, Dow Jones Newswires, the Journal and the Post compete with Bloomberg on breaking news, but News Corp would really like to be competing on financial information, which is where the real money can be found.

Eighteen months ago, Murdoch hired former Bloomberg executive Lex Fenwick to be CEO of Dow Jones to remake the company's financial data business, known as Factiva. Since then, Fenwick has been recruiting other former Bloomberg terminal developers to help him jump start a business that Dow Jones fumbled back in the 1990s, before Murdoch owned the company.

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