News Corp And the Internet
Stocks: (NWS) (NWS-A)
News Corp purchase of web community MySpace for just over $500 million is beginning to look brilliant. Not only is the site beginning to produce ad revenue, but the auction of the search facility at MySpace to Google, Microsoft or Yahoo! is likely to bring in enough money to offset a fair amount of what News Corp paid for the business.
All of this is good news for the company because it was already doing well. Revenue in the quater ending in March was almost $6.2 billion and operating income was over $1 billion. Both numbers were up from the period a year ago. The company does have debt of over $11 billion.
News Corp has been shrewd in its M&A work. Most of the companies in which it has interests are providers of contribution distribution platforms. This includes a 37% interest in DirecTV, a 41% interest in Gemstar-TV Guide and a 38% interest in British Sky Broadcasting.
Most of the company's units are stable now, and some are growing at a fairly reasonable pace. The company's film unit had a slight drop in revenue in Q1 to $1.388 billion. Television was off a small amount to $1.347. Newspapers were flat at a little over $1 billion. But, these are the company's old line businesses, and they are down as their industries lose share to other media.
News Corp's cable programming operation had a significant increase in revenue in Q1 from $633 million last year in Q1 to $839 this year. Satellite TV rose from $624 to $675. Operating income at both cable and satellite broadcasting showed sharp improvements.
News Corp. is now faced with a problem, but the solution could be promising. With old line media revenue attrition and cable and satellite division making up for these drops, the new internet initiative could be the growth engine for the company over the next few years.
MySpace is one of the three or four most visited sites on the internet. The company has bought IGN Entertainment, a site with 28 million gaming fans. Fox Interactive has a strong share of the online news market, with the Fox News website in the top 15 news sites according to Alexa.
If News Corp can successful increase both the number of large web properties it owns and the traffice to its existing site, it is very possible that its stock could move up from where it trades now, near its 52-week high of $20.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
News Corp purchase of web community MySpace for just over $500 million is beginning to look brilliant. Not only is the site beginning to produce ad revenue, but the auction of the search facility at MySpace to Google, Microsoft or Yahoo! is likely to bring in enough money to offset a fair amount of what News Corp paid for the business.
All of this is good news for the company because it was already doing well. Revenue in the quater ending in March was almost $6.2 billion and operating income was over $1 billion. Both numbers were up from the period a year ago. The company does have debt of over $11 billion.
News Corp has been shrewd in its M&A work. Most of the companies in which it has interests are providers of contribution distribution platforms. This includes a 37% interest in DirecTV, a 41% interest in Gemstar-TV Guide and a 38% interest in British Sky Broadcasting.
Most of the company's units are stable now, and some are growing at a fairly reasonable pace. The company's film unit had a slight drop in revenue in Q1 to $1.388 billion. Television was off a small amount to $1.347. Newspapers were flat at a little over $1 billion. But, these are the company's old line businesses, and they are down as their industries lose share to other media.
News Corp's cable programming operation had a significant increase in revenue in Q1 from $633 million last year in Q1 to $839 this year. Satellite TV rose from $624 to $675. Operating income at both cable and satellite broadcasting showed sharp improvements.
News Corp. is now faced with a problem, but the solution could be promising. With old line media revenue attrition and cable and satellite division making up for these drops, the new internet initiative could be the growth engine for the company over the next few years.
MySpace is one of the three or four most visited sites on the internet. The company has bought IGN Entertainment, a site with 28 million gaming fans. Fox Interactive has a strong share of the online news market, with the Fox News website in the top 15 news sites according to Alexa.
If News Corp can successful increase both the number of large web properties it owns and the traffice to its existing site, it is very possible that its stock could move up from where it trades now, near its 52-week high of $20.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
posted by douglas mcintyre at 5:33 AM
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