News Corp. to Explore Search Business

Media giant News Corp. is looking to weigh in bigger online, telling investors this week that it intends to build on the success of its MySpace.com site, will show some of its television programming exclusively on the Internet, and will try its hand at Web search.

There was speculation that the search part of the equation would most likely come through acquisition, but the online aggressiveness of the Fox broadcast, movie studio, news, and publishing giant highlights the gradual movement of old media companies onto the Information Superhighway.

One News Corp. observer who asked not to be identified attended this week’s press conference and told the E-Commerce Times the biggest challenge for such strategies remains the creation of a profitable business model for new media using the assets of an old media company.

“The whole challenge for these traditional media companies, whether it’s on the Internet or cell phones, is how to monetize the copyrights you own, or plan to buy,” he said.

Murdoch’s Late Arrival

Although Rupert Murdoch’s media megacompany has continued to expand and succeed in television and print, News Corp. is arriving late to the Internet part of the game, analysts agreed.

Comparing News Corp.’s announced intentions this week to other traditional media movement toward the Net including Disney and Viacom, the financial analyst said the company was late to the game, but nonetheless had an opportunity with the popular MySpace.com site, which may be a way to monetize other Fox media holdings.

Yankee Group senior analyst Laura DiDio told the E-Commerce Times that the News Corp. online effort may be limited somewhat by the media company’s tardiness.

“It’s going to be tough going in now to see any kind of profits in the short term, [which was easier] in 2000 or 2001,” she said.

Do or Die

Still, DiDio said that an online strategy such as News Corp.’s is necessary from any major news organization that wants to compete and succeed.

“It’s a requirement, not an option,” she said.

Referring to the challenge of a diluted advertising pool for its traditional print holdings, the typical editorial layoffs, and different content that consists of shorter stories with shorter deadlines, DiDio said the company’s move provides both technological and business challenges.

“From a business perspective, it will be a challenge, as their predecessors have faced, to provide meaningful, valuable content,” she said.

Scrambling, Bidding

However, DiDio also indicated that News Corp. brings strength and assets to the table, and is well matched against other media companies “scrambling” to take advantage of the Internet.

The analyst added News Corp.’s intention to get into Internet search is likely to stir competition among would-be partners such as Google or Microsoft.

“Everybody wants to get into search because of the online advertising content,” she said. “I could see Google and Microsoft in a very hotly contested bidding war for this online content.”

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