Some Fair and Balanced Questions for News Corp.
Walt and I usually never let the tech and media poobahs we have onstage at our annual D conference know in advance any of the questions we plan to ask them. We think it keeps things lively, and also allows us flexibility to change our topics depending on the news at the moment.
But it’ll be hard not to query News Corp. President and COO Peter Chernin, who will be appearing the morning of May 30, about his company’s just revealed “friendly” bid for Dow Jones & Co. The media conglomerate offered $5 billion, or $60 a share, for the publisher of The Wall Street Journal and, in fact, the owner of this Web site and the conference, too. According to a report in The Journal, the Bancroft family–which controls Dow Jones–is now in the spotlight, as is the fate of the company.
We’ll skip the details of this deal, because we have no inside information at all about the machinations going on. But from a digital perspective, it’s an interesting move for News Corp. The interest in Dow Jones by Chairman and CEO Rupert Murdoch, who controls News Corp., has been well known in media circles for a long time, but much of the focus at the company of late has been on significant steps into the digital space. Though Murdoch complimented The Journal as “one of the world’s great newspapers with the best digital presence” and its ability to charge a subscription fee for its WSJ.com Web site, most agree this move is a newspaper play more than a doubling-down of his bets on the Web. And it also bolsters his new financial network, which will debut soon, while simultaneously hurting his main rival, CNBC, which currently partners with Dow Jones.
Of course, the crowning glory of that game came with News Corp.’s purchase of the gigantically popular social networking site MySpace in July 2005 for $580 million. At the time–before Google’s more recent $1.65 billion purchase of YouTube and $3.1 billion payday for Double Click–the huge sum Murdoch ponied up to purchase MySpace seemed like a bold, and even crazy, move.
But with hypergrowth at MySpace continuing, it turned out to be a pretty good bet so far, which News Corp. executives never seem to tire of touting. That’s because News Corp.’s Internet properties will likely be the growth engine for the company in the years ahead, and it will have to keep moving aggressively into this space, even though it still remains as risky as ever.
That’s truer than ever at MySpace, which is in that golden period other similar Internet superstars have been in. It faces a myriad of challenges, of course, such as keeping the site relevant, not overcommercializing it and, most of all, consistently delivering interesting and innovative features and improvements. The danger? Becoming the AOL of Web 2.0, and losing its strong momentum to niche players, new concepts and, above all, its own foibles.
Rumors of infighting with MySpace’s founders, who still operate the site, and News Corp. execs crop up often (although at a recent conference I attended, a News Corp. exec said Chris DeWolfe and Tom Anderson “have not told me they were leaving … and, in fact, are taking on a bigger role within our company,” related to Net properties). In addition, its recent treatment of Photobucket, the photo-sharing and image- and video-hosting service, which MySpace temporarily blocked, had a troubling, bullying feel to it that does not jibe with its loose-and-cool image.
What will be most important of all, of course, will be Rupert Murdoch’s continuing support, which is likely, given his history of stubborn persistence in spite of much failure over the years in in the digital arena, as I wrote in this column in 2001 about News Corp.
Amid all the uncertainty, one thing is clear–Mr. Murdoch does not give up easily.