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.

Thomson’s challenge, then, is to translate the greatness of Kilgore’s Journal, and its financial success, to the realities of the twenty-first century. Given the way both reading habits and news delivery have changed since 1967, that won’t be easy. He’s following in Kilgore’s footsteps in one way: Kilgore advised John Hay Whitney, days before Whitney bought the New York Herald Tribune, that to survive in a competitive environment he needed to “make stories accessible to the average reader.” But if, as Thomson seems to suggest, accessibility today means stories that are short and ephemeral—the kind of news that is distinguished only by being ubiquitous—then the Journal is destined to become just another business-news service.

Thomson might want to consider another bit of advice that Kilgore gave Whitney: make your publication distinctive. Specifically, he wrote, editing it “with one eye on the Times was insufficient and ultimately self-defeating.” Funny that he mentioned The New York Times, as competition with the Times is a driving force at the Journal now, leading to an increasing focus on general-interest news. A recent story on gay marriage, for instance, took up more space than any of the business stories surrounding it. Three bylines appeared on a February weather story. The Journal has beefed up arts coverage, and even has a reporter covering metro New York. While the Money & Investing section remains mostly unchanged, fewer business stories run in the front section—and those that do are often unspectacular. Insiders agree—and it’s clear from reading the paper—that the Journal is investing less in business reporting because it is investing in news.

But this slapdash approach doesn’t always work so well—like now, for instance, during the current financial crisis. While the Journal has excelled in some areas—its coverage of Lehman Brothers and Bear Stearns comes to mind—it was caught short in others, notably the aig bailout and coverage of Henry Paulson’s Treasury department. Worse, the paper has failed to explicate the big questions—what happened and why—ceding the role of authoritative explainer and investigator to, ironically, The New York Times, which has a business staff one-seventh the size of the Journal’s. With all the focus on the factual scoop at the new Journal, says one reporter of his managers, “I don’t think they realize the value of the conceptual scoop, which is so important in business news. When you present a new idea and back it up with numbers and the reader says, ‘Holy crap, I didn’t know that before.’”

No one I interviewed suggests that before Murdoch the Journal was a journalistic Valhalla. Indeed, some of the reporters’ comments for this article echo complaints about the prior regime of Paul Steiger, who was editor from 1991 to 2007. Yet there’s no doubt that Murdoch has expedited unfortunate trends, and executed them with special ruthlessness. Perhaps more important, he has dismantled the newsroom culture that took pride in doing what no other outlet was doing: explaining modern capitalism, its triumphs and failures, its brilliance and cruelty, in ways that went beyond the data and the deals.

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.