News Corp Posts Disappointing Financial Results
There’s no escaping it: News Corp had a rough quarter. Rupert Murdoch thinks times will be tough for a while, too. But even as the media giant posted some bad numbers, it turned out that at least a couple of its online properties are working well, with MySpace and WSJ.com making impressive amounts of money.
Let’s start with the good news, then. Fox Interactive Media apparently increased its revenues by 17 percent thanks to growth in advertising and search at MySpace. Given all the hubbub (and statistics) about MySpace losing ground to Facebook, this must strike some supporters as a pleasant surprise.
Also, although this next development fits into a different timeframe, Michael Arrington reported that the recently launched MySpace MyAds system seems to be taking off. He wrote, "Demand for the product was immediate and significant, we’ve heard from multiple sources close to the company. Average daily revenue, say our sources, is $140,000 – $180,000, which means MyAds is at least a $50 million/year business for MySpace already." So the next quarterly report might include a bit of an upward bump.
As for the online arm of the Wall Street Journal, Rupert Murdoch himself spread the good news in a conference call. He described it as "the one website that people charge for, people are very happy to pay for." While unsure of the exact figures, Murdoch then said that the site’s generating about $100 million in subscriptions, and more than $100 million in advertising.
Here’s the bad news, though. Murdoch predicted that "the current economic downturn" will persist through fiscal 2009. And this admission came following an official News Corp report that put its first quarter net income significantly below the amount it earned a year ago ($0.20 vs. $0.23), so he’s sort of speaking from experience.
News Corp’s stock started the day down about 15 percent from where it closed yesterday afternoon.