The News Corp., parent of Fox Broadcasting, Fox News Channel, and the Twentieth Century Fox film studio, yesterday during its fiscal fourth-quarter earnings call with analysts said it has set aside $1 billion for Internet-related acquisitions.
News Corp. recently grouped its Internet assets under one unit to tap into growing online advertising.
Speaking with analysts last night, Chairman-CEO Rupert Murdoch said News Corp.'s "priority now" is the Web.
“We have tens of billions of dollars of asset value in our news, sports and general entertainment businesses. While we monetize this value daily in the form of our TV shows, channels, films, books and newspapers, our priority now, which is our mandate, is to perfect a plan that will monetize them across the world on the Internet.”
Strength in local content
Mr. Murdoch stressed the company’s strength in local content, a potentially lucrative arena that rival Internet portals are still staking out. “With 35 owned local stations, 21 regional sports networks, a variety of print publications and more than 200 local Web sites, we already have the assets to be a dominant player on the Web.”
News Corp. recently grouped its Internet assets under one unit, Fox Interactive Media, to tap into growing online advertising. Last month ago it acquired Intermix, parent company of social networking site Myspace.com.
President Peter Chernin said current revenues from Internet operations –- excluding those of Intermix -- were $100 million.
Fourth-quarter income up 67%
Separately, News Corp.’s fourth-quarter net income rose 67% to $717 million, up from $429 million for the year-ago period. (News Corp’s fiscal year ends in June.) Full-year net income was $2.1 billion.
The brightest news out of the company’s fourth-quarter results came from its cable operations. Operating income was $137 million, $17 million over the year-ago period. For the full year, growth was 44%, reflecting advertising and affiliate revenue strength at Fox News Channel, FX and the Regional Sports Network. News Corp. is currently in the midst of discussions with cable operators about renewing carriage fee agreements for its programming.
Fox Broadcasting did not fare so well, despite topping its rival TV networks last season in delivering to advertisers the coveted 18- to 49-year-old demographic and broadcasting the ad-laden Super Bowl. Advertising gains were offset by programming costs. Operating profit at the broadcast unit dropped by $7 million to $344 million due to higher programming costs.
The TV station group also saw operating income decline 5% due to lower ad sales. News Corp. attributed the drop to the introduction of local people meters, a new electronic measurement system introduced by Nielsen Media Research that Fox and other larger broadcast companies including Tribune Broadcasting Co. and Gannett Co. strongly oppose.