News Corp. employees have described Robert Thomson as “cold,” so I was pleasantly surprised when I got him on the phone to find him charming, and passionate about newspapers. But he regards the culture of the Journal with, at best, tough love. “Certain U.S. newspapers,” Thomson says, “have been designed for journalists rather than for readers.” With a chuckle, he avoided saying whether he’s talking about the Journal, but it was obvious that he was. Journalists, he says, too often choose “self-indulgence over readability. If a reader is used to the Web, he has developed a ruthless functionality in reading—just clicking on what he’s interested in.” Turning to a newspaper, Thomson says, that reader then “confronts this Neanderthal product. Taking four paragraphs to get to the point is too long. Where is the editorial empathy?”

Thomson defended his emphasis on breaking news: “A newspaper without news is like a Prius without a battery.” He insisted, if tepidly, that there is a place for long-form journalism at the paper, but it has to “make people turn to the inside, because it’s clear that not every reader does.” He notes that the Journal is publishing more series lately, to provide depth without sacrificing readability, as well as publishing a long essay on the front page of the Weekend section. “Look, if it’s in there now, there’s a place for it,” Thomson says with a laugh, pointing to his paper’s “five-thousand words on Raoul Wallenberg.” Indeed, the February 28 saga about the Swede who disappeared in Russian captivity during World War II was neither breaking news nor brief. But there’s a problem with this example: the reporter, Joshua Prager, recently left the paper because that very story was cut down from a three-part series to just the single piece. It made him realize that he could no longer do the kind of work he cared about at the Journal: “I knew that it was time for me to leave the paper,” Prager wrote in a farewell manifesto to his colleagues. “The worship of bylines and word counts and all that is ‘urgent’ has doubtless stifled the boundless creativity of the Journal staff.” Prager noted that Thomson had observed that some page-one stories had the “‘gestation of a llama.’ Mine certainly did. The paper and I were no longer a good fit.”

Half an hour uptown from the Journal’s newsroom, at Columbia University’s business school, professor Bruce Greenwald, the author of Competition Demystified, teaches a course on competitive strategy. The moral of almost every case study in his class is the same: stick to your competitive advantage. Do not seek to destroy your competitors by doing what they do, Greenwald repeatedly admonishes the MBAs. You could end up destroying your industry and yourself. “Remember New Coke!” he bellows throughout the semester. If Robert Thomson doesn’t guard closely his newsroom’s salient competitive advantage—deep reporting on business and economic news—it’s easy to imagine Murdoch’s Wall Street Journal ending up as a case study in this class. I asked Greenwald if the Journal is making the mistake he warns his students against, and he agreed without reservation that it was.

Barney Kilgore—who became the Journal’s managing editor in 1941 and ran the paper until his death in 1967—is responsible for creating the paper’s competitive advantage. He introduced the leder, which, as editorial-page editor Robert Bartley observed in a 1989 essay on the legendary newspaperman, forced reporters “to ask deeper questions, not merely about momentary events but about ongoing situations and trends—the kind of news a business reader could use.” Kilgore pioneered the whole idea—dominant at the paper for decades—that “[i]t doesn’t have to have happened today to be news.” He did all this not out of journalistic idealism, but to attract readers. Under his leadership, circulation soared—from 33,000 to 1.1 million—as did ad revenue.

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.