Late to the Internet Party, Media Mogul Murdoch Predicts Triumph

Portals like those from Yahoo and Microsoft will fade in popularity as savvy users go directly to the content they want to view, publishing titan Rupert Murdoch predicts.

“Young people today—who are the great users of the Internet—know exactly what sites they want to go to, and they go there,” Murdoch said at a Citibank media investor conference in January. “They don’t have to go and work their way through Yahoo’s homepage or MSN’s or someone else’s.”

The News Corp. chairman’s prediction comes as the company plunges into online media after several years of sitting on the sidelines. He acknowledged criticism that his company was late to invest in the Internet, and said flat revenue from the company’s traditional print media has been a wake-up call. Online media brands are in competition with content portals such as Yahoo, MSN and Google for advertising revenue.

News Corp. bolstered its online holdings last year with several acquisitions. It bought IGN Entertainment, which ran a network of websites for gaming enthusiasts, as well as Intermix Media, which ran the social networking site MySpace.com and Scout Media, a publisher of websites and sports magazines.The acquisitions increased News Corp.’s online readership, and Murdoch said his content has the third highest number of paid views in the United States, behind Yahoo and MSN but ahead of Google and eBay. He projected that News Corp.’s main websites will have revenue of $350 million to $400 million by 2007.

Among Murdoch’s online plans are to improve MySpace.com by making it “stickier,” he said. The site has begun offering free video downloads and is developing instant messaging technology and voice communication capability. MySpace.com has about 47 million users, representing a gold mine of data for targeted advertising, according to Murdoch. The site is growing by about 1 million users per week, he said.

MySpace.com will not be a traditional portal, centered on organizing content for users, Murdoch said. Rather, his company is bullish on building community, offering an online space where users can create connections to friends, colleagues and their preferred content.

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