In December 2008, a year after* Rupert Murdoch’s News Corp. purchased The Wall Street Journal, the paper had a holiday “party.” Each news department was escorted separately, in turn, into a brightly lit conference room. A large horseshoe-shaped conference table took up most of the space, leaving little room to stand. Amenities were sparse. “They spent maybe $30 on the little plastic wineglasses,” recalls a reporter who, like nearly every Journal employee interviewed for this article, requested anonymity. Everyone hovered awkwardly at the side of the horseshoe. Then Robert Thomson, the Australian editor hired by Murdoch to run the paper, made his entrance. He seemed—and Journal reporters often characterize him this way—unsure of what to say to his employees. “He said we were up seven percentage points. He said something about a focus group. He told us we were moving the needle,” the reporter says. “After an hour, they flashed the lights and it was time for another group to come in. I thought, ‘Thanks, that’s really why we went into journalism. To move the needle.’”

At the Journal’s offices in lower Manhattan, just about everyone is grateful that the new owner has deep pockets and is willing to invest in reporting—both rare commodities in the industry these days. Yet there are reasons to fear that in the midst of a global financial crisis, arguably the biggest test a business newspaper could face, with greater demand for high-quality journalism on finance and the economy than at anytime in decades, the Journal is abandoning values that have long distinguished it: a commitment to deep reporting and elegant writing. Murdoch and his team can keep news organizations afloat. They can move the needle of a media company—they’ve proven that over the decades. But though Murdoch went to considerable lengths to acquire the Journal, he and his top lieutenants have displayed barely disguised contempt for its core strengths. They have moved the paper decisively toward a more terse, scoop-oriented form of journalism that they believe is more in keeping with the information age. The question, then, is whether this strategy will work at the Journal, and if so, at what cost? Murdoch’s managers, as one reporter put it, “don’t fully appreciate what they have.”

That said, it would be a mistake to overlook the good news at Murdoch’s Journal. Widespread fears that its news pages would become a platform for its new owner’s political views and business interests have proved unfounded. In 2007, as Murdoch pursued the paper, its Chinese bureau, citing that year’s Pulitzer for its work on China’s pursuit of unbridled capitalism, wrote to the Bancroft family (which had controlled the paper since 1902) and urged it to decline Murdoch’s offer, given the mogul’s record of putting his business relationships with China ahead of honest journalism. Ian Johnson, whose work on the Chinese government’s suppression of the Falun Gong spiritual movement also won a Pulitzer, weighed in with his own public statement, warning that Murdoch would view the China bureau’s hard-hitting work as a “nuisance” and ask editors to tone it down.

That hasn’t happened, says Johnson, who is still reporting for the Journal from Beijing. In fact, Murdoch has come to the aid of the Chinese bureau. Soon after Murdoch bought the paper, Johnson was denied a visa because the government didn’t like his critical reporting. When China did this to reporters in the past, previous owners did little: “China was too far away and not important enough for Dow Jones to solve this problem,” says Johnson, and the company “lacked the institutional heft” to help anyway. By contrast, he recalls, “The News Corp. team was professional and effective, from their government-relations expert to Mr. Murdoch himself, who lobbied personally on my behalf to a Chinese minister.”

Indeed, as the CEO of a global conglomerate, Murdoch has a global sensibility, and is already making the Journal a far more international paper. He has let Robert Thomson invest $6 million in foreign coverage. At a time when other newspapers’ coverage of the world outside the U.S. is declining, Thomson says, the Journal can attract readers by providing foreign news. And some of the recent foreign coverage has been top-notch. A remarkable March 18 story, for example, on how Iranian imports have devastated the Iraqi economy, focused with illuminating specificity on how the U.S. occupation, with its consequent erratic fuel and electricity supplies, had undercut the famously sturdy quality of Iraqi bricks.

Liza Featherstone is a regular contributor to Slate's The Big Money Web site, and the author of Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart.