Features
Gigs & Bytes: Rupert’s Space
During the dot-com boom, Murdoch’s News Corp. formed an online division called News Digital Media, only to close it down in 2001.
But a lot can change in four years, and Murdoch appears to have taken a second look at the Net. News Corp. has entered an agreement to acquire Intermix Media Inc., parent company of the very popular social networking site MySpace.com.
While Intermix Media has several socially oriented sites, MySpace appears to be at the heart of News Corp.’s acquisition. Along with News Corp. grabbing Intermix for $580 million in cash, Intermix itself is busy acquiring the remaining 47 percent of MySpace that it doesn’t already own. When the smoke clears, News Corp. will own MySpace, lock, stock and barrel.
It’s all a part of News Corp.’s new Internet strategy as the house-that-Rupert-built forms a new Net division called Fox Interactive Media, which will group all of News Corp.’s Internet properties under one banner. The Intermix acquisition is the first major action by Fox Interactive Media since it was formed on July 15th.
MySpace has enjoyed a meteoric rise to the top tier of Web site properties during the two years of its existence. Simply put, MySpace is a community where individuals may create personal Web sites, link to other MySpace users’ sites and make new friends through common or shared interests.
However, saying MySpace is just another online community is like saying Eric Clapton is just another guitarist. MySpace has become the place for musicians, amateurs and pros alike, to promote their music. It’s where hipster netizens go to hang out. It’s where R.E.M. and Black Eyed Peas streamed their new releases before the CDs hit store shelves.
In other words, MySpace is cool.
And every page that MySpace serves up comes with advertising, a feature that certainly must have caught Murdoch’s attention.
According to Nielsen/NetRatings, only Yahoo! and Microsoft displayed more ads than MySpace during May of this year. The Los Angeles Times reports that both Barry Diller’s InterActiveCorp and MTV tried to snatch up MySpace, but it was Murdoch’s offer to Intermix of $12 per share, a 12 percent premium over Intermix’s July 15th closing price, that clinched the deal.
Intermix began life in 1999 as an online CD seller called EUniverse and rapidly segued into presenting entertainment and game sites such as Grab.com.
Earlier this year, Intermix was the focus of an investigation by New York Attorney General Eliot Spitzer, who contended that the company was secretly including adware with their downloads. In June, Intermix reached a tentative resolution of the investigation by agreeing to pay $7.5 million over the next three years to settle the accusations.
For News Corp., the Intermix / MySpace acquisition represents a traditional media company making a major commitment to the Net. News Corp.’s new Fox Interactive Media will coordinate advertising across all News Corp. Internet properties, including Fox Sports, Fox News, and Fox Television as well sites for Fox TV affiliates.
“Intermix is an important acquisition for News Corp., instantly doubling the number of visitors to our sites and providing an ideal foundation on which to meaningfully increase our Internet presence,” Murdoch said in a statement announcing the acquisition. “Intermix’s brands, such as MySpace.com, are some of the Web’s hottest properties and resonate with the same audiences that are most attracted to Fox’s news, sports and entertainment offerings. We see a great opportunity to combine the popularity of Intermix’s sites, particularly MySpace, with our existing online assets to provide a richer experience for today’s Internet users.”
There is one side note to News Corp.’s Intermix / MySpace acquisition. Apparently some of MySpace’s users wanted Murdoch to feel at home at the online community and took it upon themselves to create several Rupert Murdoch personal pages. One, located at www.myspace.com/rupertmurdoch, lists one of the media mogul’s interests as “making Ted Turner squirm,” while the “About me” section states, “I enjoy corporate takeovers, enjoy buying out newspapers, magazines and TV stations in my native Australia … The sun will never set on the Murdoch empire …”
At least, we think it was created by an anonymous MySpace user. One can never be too sure.