The Wall Street Journal and parent Dow Jones were reeling as businesses when Rupert Murdoch's News Corp. bought them in 2007.

The Journal itself operated at a small loss; the other half of Dow Jones, providing specialized financial information, generated what profits there were. Altogether, margins were in the low single digits. And that was before the worst of the newspaper advertising crash in 2008 and 2009.

Over the last year, the Journal's circulation, circulation revenues and advertising revenues are all up, according to the company, a rare trifecta in an industry still shrinking as other media, like magazines and broadcast, recover. The Journal is now profitable, a spokesperson told me, though she declined to reveal the margin.

Then-publisher Les Hinton (who resigned last week as part of the fallout from the News of the World phone hacking scandal), summarized the good news in a May letter to employees:

"Our progress is measurable.Through the first nine months of fiscal 2011, Dow Jones revenue increased 5%. That figure includes strong results from the Journal’s U.S. print edition (ad revenue up 7%, circulation revenue up almost 8%) and its digital editions (ad revenue up 19%, circulation revenue up 22%).

"Our business-to-business operations, by the third quarter (January through March 2011 in News Corp.'s fiscal year), were showing new strength after the extended impact of the financial crisis. Ours is an uncommon story in the news business. The Journal’s total ad revenue rose 2.6% in the fiscal third quarter, our sixth consecutive quarter of growth. At the New York Times, news group ad revenue fell 3.7% in the same quarter.

"Where the Journal’s total circulation revenue improved 8% in the quarter ended March, circulation revenue at the Times fell by 3.7%. The print Journal alone has recorded 17 consecutive quarters of circulation-revenue growth, including nearly 6% in the third quarter, as we broadened and improved it. What other newspaper can tell that story?"

However, there is a critical piece missing in this account and in News Corp.'s earnings reports, which do not break out the Journal or Dow Jones results separately: What about expenses?

Selling new subscriptions, launching the Greater New York edition last year and producing an expanded daily and weekend report over the last several years are all potentially very expensive. The expanded coverage that Murdoch has green-lighted costs more in newsroom expense and considerably extra in newsprint as the newshole expands.

So it is probable that profits are not increasing as fast as revenue, and it is possible that the margins are very thin. Those who know are not saying.

At worst, though, that would mean that Murdoch's News Corp. is investing in the Journal and the rest of Dow Jones, not extracting big profits for now and carrying the enterprise with its lucrative TV and film businesses.

That is a respectable, if uncommon strategy, for newspaper/digital organizations. The Washington Post Co., for instance, has been content to run the paper itself at break-even or a slight loss in several recent years, letting its education, broadcast and cable businesses pick up the slack.

Pre-Murdoch, the financial picture at Dow Jones and the Journal was radically different than it is today. Not that management was asleep at the switch four years ago. The Journal was the first American paper to build a digital paid subscription base, a running start on which News Corp. has expanded. The digital subscriptions count for purposes of audited circulation, allowing the Journal to establish a comfortable lead over USA Today.

Also, in its final years, the old regime was scrambling to move resources to Dow Jones's digital/financial information businesses. It completed key acquisitions of MarketWatch and Factiva during the middle years of the decade.

However by 2007, as Murdoch's offer came in, CEO Rich Zannino advised the board to sell. Dow Jones did not have enough capital to strengthen the Journal and cover the next stages of expansion in the highly competitive financial information business. And News Corp.'s premium offer -- $60 a share when the stock was trading at $36 -- was a once-in-a-generation exit opportunity for the Bancroft family and other shareholders.

So the Journal and Dow Jones have been bolstered as businesses after four years as part of News Corp. But has the paper lost its journalistic soul along the way, been "Foxified" as New York Times columnist Joe Nocera charged this week?

Neither the Journal's softball first interview with Murdoch nor its snarling, self-defensive editorial were sparkling moments. But it did lead this Monday's front page with "Scandal Grows at News Corp." and ran two full pages more of coverage inside. On balance, the Journal's phone-hacking coverage has been adequate and "workmanlike," as one staffer put it, if not leading the pack from the awkward posture of reporting on your own company's troubles.

As a subscriber, I have a typically mixed reaction to News Corp's changes to the Journal. I appreciate the broader general news coverage (sports included), and there is lots more worthwhile arts and leisure coverage to read on weekends. But there seem to be fewer blowout investigations and less willingness to explore offbeat tales, supplanted by more hard news.

A content-analysis study of front pages, released Wednesday by the Project for Excellence in Journalism, confirmed that government and lifestyle coverage has pulled even in volume with that of The New York Times, as front page space for business and economics stories has been pared back.

For another opinion, I asked a Journal veteran who has written or edited dozens of those big, wide-ranging stories over the past two decades. And I got a surprisingly upbeat response.

Far from feeling marginalized, he has found the new regime invigorating. Those who stayed are a lot better off, he said, than colleagues who fled to publications like Portfolio or Businessweek. Murdoch protégé Robert Thomson is a demanding editor but a fair one, he continued, and the next layer of top editors -- like Deputy Editor-in-Chief Gerard Baker or standards and front-page editor Alix Freedman are aces at their jobs.

None of this is to deny that the who-knew-what-when phase of the phone-hacking scandal could spill over into the future of Dow Jones and the Journal. A News Corp. without Murdochs or with the patriarch's role reduced might not value so highly the profile and political influence of the Journal. Resources could shift faster to the company's highly profitable and expanding pay TV businesses (cable and satellite).

However, in the highly unlikely scenario that News Corp. does disengage from Dow Jones and the Journal, it will have fulfilled the campfire credo of leaving the businesses better off than when it arrived.