Peter Kann, the CEO of Dow Jones, and his wife, Karen House, the publisher of the Journal.   (Photo: From left: Michael Crabtree/Reuters/Corbis; Kin Cheung/Reuters/Corbis)

By attracting a whole new set of advertisers, “Weekend Edition” could put this bad patch behind Dow Jones. But there are many in the media world who seriously doubt if the current ownership and management are up to the task. Mark Boyar, a substantial Dow Jones shareholder, told me, “It is so broken that the only choice is to give a new owner a chance to fix it.” If “Weekend Edition” fails to deliver, then the name on the door to the Journal offices might soon change again—to something like, say, News Corp.

When Peter Kann, the Dow Jones CEO, makes his company’s case to Wall Street analysts, they note that he hardly looks the part of a media mogul. His thinning hair is often due for a trim, and he stumbles through remarks, occasionally mumbling inaudibly. “He’s not as articulate with the spoken word as he’s eloquent with the written word,” says Bob Merry, a former Journal reporter who’s now president of Congressional Quarterly. During the presentations, Kann tends to add charmingly self-effacing quips that may reveal more than is prudent. “I’m a troglodyte with technology,” he announced a few years ago when explaining Web strategy.

Kann, the son of Austrian émigrés, arrived at the company’s executive floor in 1979, seven years after winning a Pulitzer Prize. The newsroom cheered loudly for his promotion because his comrades there worshiped him. His Vietnam dispatches had captured the war’s futility, showing, for instance, how Mekong villagers feared a water snake with nine nostrils more than the Vietcong. “[Kann’s] Pulitzer was one of the most popular with colleagues in my lifetime,” says former Washington Post managing editor Bob Kaiser, a friend of Kann’s from Vietnam. Among other things, he was admired for his cheeky, unyielding independence. During sojourns across Asia, he famously ignored cables from his editors. “Message unreceived,” he wired New York, flouting an order to quit covering the skirmishes in Dhaka.

Ever since the thirties, Dow Jones has appointed journalists, and only journalists, to run the company—a practice that no other media company follows. It’s a tradition with an obvious upside. The scribblers-cum-CEOs make for superb editorial stewards who understand the inherent inefficiency of news gathering. But for all of Kann’s charms, empathy, and smarts, his tenure has raised doubts about the Dow Jones system: Should the company put journalists in charge?

The most obvious managerial idiosyncrasy of the Kann era can be discerned from a quick glance down the executive floor. After the death of his first wife, Kann beat out Charlie Rose for the hand of the Journal’s star diplomatic correspondent, Karen Elliott House. Since then, he has promoted her continually, all the way to publisher of the Wall Street Journal. High-profile husband-wife partnerships hardly ever exist in corporate America, for obvious reasons. As one former Journal executive puts it, “Who would have the cojones to criticize the boss’s wife? With Karen, it doesn’t ever happen.”

“Peter accused him of disloyalty,” says one of Barney Calame’s friends, describing Kann’s reaction to Calame’s new job at the Times. “He really tore into him.”

Kann’s biggest failures, though, have been his attempts to diversify the company away from the shrinking newspaper business. When Michael Bloomberg’s upstart computer terminals began to trounce Dow Jones’s Telerate boxes in the mid-nineties, Kann announced that he would sink $650 million into the reinvigoration of his product. Operation Rolling Thunder, the company called it, a name that harked back to Vietnam. The metaphor fit. Like General Westmoreland, Kann had escalated his involvement in a war he couldn’t win. In 1998, he sold Telerate for $510 million, a third of what Dow Jones had initially paid. Three years earlier, he had sunk another sizable chunk of change into the purchase of WBIS, an analog television station in New York, perhaps as atonement for the last-minute failure of nerve that prevented him from snapping up the Financial News Network (bought by CNBC) in 1991. Two years after buying WBIS and investing millions it, Dow Jones’s partner in the deal, ITT, began suffering its own internal crisis, and Kann sold the station for a tablespoon more than the company paid for it.

After the company unloaded Telerate and WBIS, it didn’t have much left outside of the Journal—just the news wires, Barron’s, SmartMoney magazine (owned in partnership with Hearst), and a chain of regional papers. So Dow Jones depended heavily on the Journal and its main source of income, B2B advertising—that is, businesses hawking wares to other businesses. Dow Jones had no defense from the crippling 2000 recession, when business spending dried up. The tech sector and financial-service companies stopped buying ads. “Without a major turn in the economy, there was nothing they could do,” says newspaper-industry analyst John Morton. “Except try and land other kinds of ads.”

The Saturday edition intends to compensate for the absence of Sun Microsystems and Fidelity ads by chasing after a species of company that hasn’t tended to buy much space in the Journal: Ralph Lauren and Best Buy, importers of Ligurian olive oil and Pinot Noir, as well as Lexus and Mercedes-Benz. These companies are in hot pursuit of an archetypal consumer who bears little resemblance to Paul Steiger. The paper’s rumpled, gravelly voiced managing editor wears a faded tie and a yellow shirt that looks as if it slid off a Brooks Brothers shelf twenty years ago.